For further information, please contact
Corporate Communications
Phone +31 (0)30 298 88 31
Investor Relations
Phone +31 (0)30 298 88 03
E-mail corporate.communications@wessanen.com
E-mail investor.relations@wessanen.com
Press release – Results first quarter 2008
May 9, 2008
Solid underlying performance in all four businesses
Highlights
ƒ
Total revenue in Q1-08 was EUR 384.6 million (Q1-07: EUR 388.5 million). Currency effect contributed
EUR 36.2 million negatively. Autonomous sales growth was 5.1%.
ƒ
EBIT amounted to EUR 12.4 million in Q1-08 (Q1-07: EUR 12.1 million). Negative currency effect of
EUR 0.4 million.
ƒ
Profit attributable to equity holders of Wessanen was EUR 7.2 million in Q1-08 (Q1-07: EUR 6.8 million,
excluding profit from (divestment of) discontinued operations).
ƒ
Cash generated from continuing operations ended in the first quarter of 2008 at EUR 3.1 million (Q1-07:
EUR 14.3 million).
CEO statement
Ad Veenhof, Wessanen CEO, comments: “Following the growth trend from previous quarters, all our
businesses are again posting solid growth figures. I am particularly pleased with the growth in our North
American operations. North America Branded did well as a result of last year’s acquisition, continued product
innovation and channel extension. North America Distribution showed a solid performance as a result of sales
increases at both our Top Ten customers and in the natural food channel. Our European operations are
performing on target. European Health brands achieved good results with 5.5% organic growth. New product
launches and stronger advertising and promotion should result in a further improvement of the growth levels
over the coming quarters. The earlier growth trend in Europe Distribution continues with good profitability.”
Consolidated key figures first quarter 2008
X EUR million, unless stated otherwise
Q1 2008
Q1 2007
Revenue
384.6
388.5
Revenue at constant exchange rates
420.8
EBIT (operating profit)
Profit attributable to equity holders of Wessanen
Earnings per share (in euro)
Average number of outstanding shares (x 1,000 shares)
12.4
12.1
7.2
21.5
0.11
0.30
67,585
71,624
Chamber of Commerce . Amsterdam 33145851
080509 Wessanen Results Q12008 ENG DEF.doc
Outlook
•
Achieve revenue growth in all four businesses reaching a growth target level of 6-8% at North America
Branded and North America Distribution and 5-7% at Europe Branded (Health) and Europe
Distribution.
•
Continue to achieve profit increase in all four businesses reaching a strategic profit target level of 1012% at North America Branded and Europe Branded (Health), 4-5% at Europe Distribution and 3-4%
at North America Distribution with some delay.
•
Broaden and internationalize our brands and brand portfolio in the key product categories.
•
Strengthen our distribution business via organic growth, new contracts and complementary
consolidations.
•
Improve working capital and cash flow.
F i n a n c i a l s um m a r y
Total revenue decreased by 1.0% to EUR 384.6 million, due to a negative foreign currency effect (of a weak US
Dollar and British Pound against the euro in Q1-08) of EUR 36.2 million. Excluding the negative foreign
currency effect, revenue increased by 8.3%, partly caused by acquisitions. Autonomous sales growth,
excluding currency and acquisition effects, was 5.1%.
EBIT increased by EUR 0.3 million to EUR 12.4 million (Q1-07: EUR 12.1 million), including a negative
currency effect of EUR 0.4 million.
Primary working capital decreased in Q1-08 by EUR 7.6 million to EUR 249.3 million, mainly due to a positive
foreign exchange effect of EUR 11.6 million.
Cash generated from operations decreased with EUR 11.2 million to EUR 3.1 million in Q1-08 from
EUR 14.3 million in Q1-07, mainly due to a negative secondary working capital development.
The total net cash outflow in Q1-08 amounted to EUR 14.4 million (Q1-07: net cash inflow of
EUR 7.6 million, excluding the cash inflow from (divestment of) discontinued operations of EUR 91.2 million).
Net debt decreased in Q1-08 with EUR 1.7 million to EUR 141.3 million, as at March 31, 2008, including a
foreign currency effect of EUR 5.9 million.
Highlights first quarter per segment: North America (NA)
•
Total North American revenue showed 8.5% growth in Q1-08 to USD 330.8 million (Q1-07: USD 304.8
million). Revenue growth was realized by strong branded and third party sales at NA Branded, as well
as strong sales increases at supermarkets and natural food stores at NA Distribution.
•
Total North American EBIT increased by USD 1.5 million to USD 3.0 million, doubling Q1-07 EBIT
(Q1-07: USD 1.5 million).
2
•
NA Branded continued to grow in Q1-08, increasing revenue by 22.7% and EBIT by 31.1% as
compared to the same period last year, including acquisition effects. Core brand growth in Daily’s and
MI-DEL, was supplemented by gains in the Liberty Richter third-party client business, and the
acquired Rainbow brand business (consolidated as from August 1, 2007). Key growth factors included
continued product innovation leading to an updated portfolio mix, and strong marketing support
leading to new distribution outlets.
•
NA Distribution continued the positive turnaround which occurred as from the second quarter of
2007, posting increased revenue of 7.0%, and increasing EBIT to USD 1.6 million, as compared to
USD 0.4 million in the same period last year. NA Distribution sales to Top Ten supermarket
customers continued to show solid growth, and were supplemented by sales increases in the natural
food channel. Continued expense control and further development and implementation of
management systems and processes, continued to improve productivity and profitability. Year-overyear EBIT continues to show solid improvement, despite the cost of on-boarding new business and
inflationary pressures.
•
One of Tree of Life’s largest Top Ten customers renewed and increased their supply agreement.
Total North American business (in euros)
x EUR million, unless stated otherwise
Q1 2008
Q1 2007
Revenue
219.2
232.3
Revenue at constant exchange rates
252.3
EBIT (operating profit)
2.0
1.1
0.9%
0.5%
Q1 2008
Q1 2007
330.8
304.8
3.0
1.5
0.9%
0.5%
Q1 2008
Q1 2007
Revenue
24.6
23.1
Revenue at constant exchange rates
28.3
EBIT margin (as a % of revenue)
Total North American business (in US dollars)
x USD million, unless stated otherwise
Revenue
EBIT (operating profit)
EBIT margin (as a % of revenue)
North America Branded (in euros)
x EUR million, unless stated otherwise
EBIT (operating profit)
EBIT margin (as a % of revenue)
0.9
0.8
3.7%
3.5%
3
North America Branded (in US dollars)
x USD million, unless stated otherwise
Q1 2008
Q1 2007
37.2
30.3
1.4
1.1
3.7%
3.5%
Q1 2008
Q1 2007
Revenue
194.6
209.2
Revenue at constant exchange rates
224.0
Revenue
EBIT (operating profit)
EBIT margin (as a % of revenue)
North America Distribution (in euros)
x EUR million, unless stated otherwise
EBIT (operating profit)
EBIT margin (as a % of revenue)
1.1
0.3
0.6%
0.1%
Q1 2008
Q1 2007
293.6
274.5
1.6
0.4
0.6%
0.1%
North America Distribution (in US dollars)
x USD million, unless stated otherwise
Revenue
EBIT (operating profit)
EBIT margin (as a % of revenue)
Highlights first quarter per segment: Europe
•
Total European revenue showed 5.9% growth in Q1-08 to EUR 159.0 million (Q1-07: EUR 150.1
million), including a negative currency effect of EUR 3.0 million (2.0%). Revenue growth was realized
by the good performance of our natural/organic brands and solid business at Europe Distribution.
•
Total European EBIT was slightly lower with EUR 12.6 million in Q1-08 (Q1-07: EUR 13.0 million),
including a negative currency effect of EUR 0.1 million. In Q1-07 a one-time positive effect of EUR 1.2
million was recorded for the sale of real estate. This quarter, a real estate related transaction added
EUR 1.0 million to the result.
•
Europe Branded continued to grow in Q1-08, increasing revenue by 7.7% to EUR 122.5 million (Q107: EUR 113.8 million), including a negative currency effect of EUR 1.3 million (1.2%). Key growth
factors are the acquisition of Habek Snacks through Favory Convenience Food Group, new product
introductions and increased marketing support in most countries. Excluding currency impact, the
European Health brand portfolio grew by 5.5%, Branded Frozen showed a modest growth of 0.4% and
sole agent contracts contributed 12.0% negatively.
o
Comparable EBIT margin of Europe Branded remained at 10.2% in Q1-08. Frozen had only a
slightly positive impact due to good performance of branded sales, partly offset by integration
costs.
4
o
To focus and properly align the sole agency contracts with our own branded portfolio in
Europe, some additional EUR 4 to 6 million on top-line revenue will be terminated in 2008, in
line with earlier announcements. Effect in Q1-08 was EUR 1.7 million.
•
The European distribution business, excluding negative currency effect (EUR 1.7 million), grew by
5.1% in comparison with Q1-07. EBIT margin of Europe Distribution was with 4.7% in Q1-08 lower
than 4.9% in Q1-07. Corrected for currency impact EBIT margin was in line with last year.
Total European business
x EUR million, unless stated otherwise
Q1 2008
Q1 2007
Revenue
158.9
150.1
Revenue at constant exchange rates
162.0
EBIT (operating profit)
12.6
13.0
EBIT margin (as a % of revenue)
8.0%
8.7%
Q1 2008
Q1 2007
Revenue
122.5
113.8
Revenue at constant exchange rates
123.9
Europe Branded
x EUR million, unless stated otherwise
EBIT (operating profit)
10.9
11.2
EBIT margin (as a % of revenue)
8.9%
9.9%
Q1 2008
Q1 2007
Revenue
36.4
36.3
Revenue at constant exchange rates
38.1
Europe Distribution
x EUR million, unless stated otherwise
EBIT (operating profit)
1.7
1.8
4.7%
4.9%
Q1 2008
Q1 2007
Revenue
6.5
6.1
Revenue at constant exchange rates
6.5
EBIT margin (as a % of revenue)
Highlights first quarter per segment: Non-Allocated
Total Non-Allocated
x EUR million, unless stated otherwise
EBIT (operating profit)
(2.2)
(2.0)
5
Important dates
July 31, 2008
Publication of the second quarter and half-year 2008 results
August 1, 2008
Ex-dividend share price determined
August 13, 2008
Interim dividend 2008 payable
October 28, 2008
Publication of the third quarter 2008 results
February 26, 2009
Publication of the fourth quarter and annual 2008 results
April 16, 2009
Annual General Meeting of Shareholders
Company profile
Royal Wessanen nv is a multinational food corporation based in the Netherlands. We earn our revenues by
developing, sourcing, producing, marketing and distributing high-quality natural and specialty food products
in North America and Europe. Our mission is to be the leading transatlantic company for branded authentic
Health and Premium Taste Foods. Our actions are intended to achieve a balance between the interests of all
our stakeholders, by focusing on authenticity, transparency, and sustainability.
Appendices
1.
Condensed consolidated interim financial statements first quarter 2008.
Note on forward-looking statements
This announcement contains certain statements that are neither reported financial results nor other historical
information. These statements are forward-looking statements within the meaning of the safe-harbor provisions
of the US federal securities laws. These forward-looking statements are subject to risks and uncertainties that
could cause actual results to differ materially from those expressed in the forward-looking statements. Many of
these risks and uncertainties relate to factors that are beyond Wessanen's ability to control or estimate precisely,
such as future market conditions, the behavior of other market participants and the actions of governmental
regulators. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak
only as of the date of this press release.
6
Appendix 1:
C o n d e n s e d c o n s o l i d a t e d i n t e r i m f i n a nc i a l s t a t e m e n t s f i r s t q u a r t e r 2 0 0 8
Condensed consolidated income statement
in EUR millions, unless stated otherwise
Q1 2008
Q1 2007
384.6
1.0
(373.2)
12.4
388.5
1.2
(377.6)
12.1
(1.7)
10.7
(3.2)
7.5
(2.2)
9.9
(2.5)
(0.7)
15.4
22.1
7.2
-
6.8
14.7
7.2
0.3
7.5
21.5
0.6
22.1
0.11
0.11
0.30
0.30
Average number of shares outstanding (in thousands)
Basic
67,585
71,624
Average USD exchange rate (Euro per U.S. Dollar)
0.6622
0.7624
March 31,
2008
December 31,
2007
Revenue
Other income
Operating expenses
Operating profit
Net financing costs
Share in results of associates
Profit before income tax
Income tax expense
Result from discontinued operations, net of income tax
Result on divestment discontinued operations, net of income tax
Profit for the period
Attributable to:
Equity holders of Wessanen:
Total attributable from continuing activities
Total attributable from discontinued activities
Total attributable to equity holders of Wessanen
Minority interests
Profit for the period
Earnings per share (in EUR)
Basic
Diluted
Condensed consolidated balance sheet
in EUR millions, unless stated otherwise
Non-current assets
Current assets
Total assets
388.9
493.3
882.2
397.2
515.6
912.8
Equity attributable to equity holders of Wessanen
Minority interests
Total equity
Non-current liabilities
Current liabilities
Total equity and liabilities
402.0
20.3
422.3
197.7
262.2
882.2
409.7
20.0
429.7
215.9
267.2
912.8
End of period USD exchange rate (Euro per U.S. Dollar)
0.6347
0.6799
7
Condensed consolidated statement of cash flow
in EUR millions, unless stated otherwise
Q1 2008
Cash flow from operating activities
Operating profit
Q1 2007
12.4
12.1
4.2
2.6
4.0
4.2
Cash generated from operations before changes in working capital and provisions
19.2
20.3
Changes in primary working capital
Changes in secondary working capital
Changes in provisions and employee benefits
(3.1)
(8.2)
(4.8)
(6.0)
6.7
(6.7)
3.1
14.3
Income tax paid
Interest paid
(2.6)
(2.9)
(1.3)
(3.2)
Operating cash flow from continuing activities
Operating cash flow from discontinued activities
Net cash from operating activities
(2.4)
(2.4)
9.8
(0.6)
9.2
Investing cash flow from continuing activities
Investing cash flow from discontinued activities
Net cash from/(used in) investing activities
(8.9)
(8.9)
(2.2)
92.0
89.8
Financing cash flow from continuing activities
Financing cash flow from discontinued activities
Net cash from/(used in) financing activities
(3.1)
(3.1)
(0.2)
(0.2)
(14.4)
98.8
50.1
50.1
12.4
1.0
13.4
(14.4)
(0.6)
98.8
(0.2)
Adjustments for:
Depreciation, amortization and impairments
Other non-cash and non-operating items
Cash generated from operations
Net cash flow
Cash and cash equivalents of continuing operations at beginning of year
Cash and cash equivalents related to discontinued operations at beginning of year
Cash and cash equivalents at beginning of year, including discontinued operations
Net cash from operating, investing and financing activities
Effect of exchange rate differences on cash and cash equivalents
Cash and cash equivalent related to discontinued operations at end of period
Cash and cash equivalents of continuing operations at end of period
35.1
112.0
0.6622
0.7624
March 31, 2008
March 31, 2007
Balance at beginning of year
Foreign exchange translation differences
Effective portion of changes in fair value of cash flow hedges
Total income and expense recognized directly in equity
Profit for the period
Total recognized income and expense
Share-based payments
Dividends to shareholders
Balance at end of period
429.7
(11.4)
(3.6)
(15.0)
7.5
(7.5)
0.1
422.3
480.0
(2.7)
0.1
(2.6)
22.1
19.5
0.1
499.6
Attributable to:
Equity holders of Wessanen
Minority interests
Total equity
402.0
20.3
422.3
488.8
10.8
499.6
Average USD exchange rate (Euro per U.S. Dollar)
Condensed consolidated statement of changes in equity
in EUR millions, unless stated otherwise
8
Notes to the condensed consolidated interim financial statements
In millions of euro, unless stated otherwise
1
The company and its operations
Royal Wessanen nv (‘Wessanen’ or the ‘Company’) is a public limited company domiciled in the
Netherlands. The condensed consolidated interim financial statements of the Company as at and
for the three-month period ended March 31, 2008 comprises the Company and its subsidiaries
(together referred to as the ‘Group’) and Wessanen’s interest in associated companies.
The information in these condensed consolidated interim financial statements is unaudited.
2
Statement of compliance
These condensed consolidated interim financial statements have been prepared on the basis of the
recognition and measurement requirements of accounting standards adopted by the EU as of
December 31, 2007. They do not include all of the information required for full annual financial
statements, and should be read in conjunction with the consolidated financial statements for the
Group as at and for the year ended December 31, 2007.
These condensed consolidated interim financial statements were approved by the Board on May 8,
2008.
3
Accounting policies
The accounting policies applied by the Group in these condensed consolidated financial statements
are the same as those applied by the Group in its consolidated financial statements as at and for
the year ended December 31, 2007.
4
Estimates
The preparation of the interim financial statements requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual results may differ from these
estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments
made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated financial
statements as at and for the year ended December 31, 2007.
9
5
Financial risk management
The Group’s financial risk management objectives and policies are consistent with that disclosed in
the consolidated financial statements as at and for the year ended December 31, 2007.
6
Financial information by segment
Activities of continuing operations are carried out by four separate business segments: North
America Branded, North America Distribution, Europe Branded and Europe Distribution. Nonallocated includes Karl Kemper Germany and corporate entities.
Key financial data regarding these segments are given below (in EUR millions):
Q1 2008
Total North American business
Revenue
Operating profit
Q1 2007
219.2
2.0
232.3
1.1
24.6
0.9
23.1
0.8
North America Distribution
Revenue
Operating profit
194.6
1.1
209.2
0.3
Total European business
Revenue
Operating profit
158.9
12.6
150.1
13.0
Europe Branded
Revenue
Operating profit
122.5
10.9
113.8
11.2
Europe Distribution
Revenue
Operating profit
36.4
1.7
36.3
1.8
Non-allocated
Revenue
Operating profit
6.5
(2.2)
6.1
(2.0)
North America Branded
Revenue
Operating profit
10
7
Other income
Other income in Q1 2008 of EUR 1.0 million comprises the net gain on the sale of a purchase
option related to the premises of Allos Walter Lang in Mariendrebber (Germany) (Q1 2007: net gain
on sale of the premises in Essen (Belgium) of EUR 1.2 million).
8
Income tax expense
The Group’s consolidated effective tax rate in respect of continuing operations for the three-month
period ending March 31, 2008 was 30%, based on an estimated average annual effective income
tax rate of 30% for 2008 (for the year ended December 31, 2007: 20%).
9
Share capital issued
At the Annual General Meeting of Shareholders on April 16, 2008, the decision was taken to reduce
the share capital issued by 4,229,396 shares from 72,588,501 to 68,359,105 shares, following the
share buyback program of EUR 50.0 million in 2007
11