Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 1
THIRD QUARTER 2006 RESULTS
(Oslo, 16 November 2006) Nutri Pharma (OSE: NUT) today reports operating revenues of NOK 16.9
million and a loss of NOK 4.1 million for the third quarter of 2006. This compares to revenues of
NOK 1.4 million and a loss of NOK 1.8 million in the third quarter of 2005. Operating costs in third
quarter were NOK 20.8 million compared to NOK 3.0 million in Q3-2005. EBITDA in third quarter
shows a deficit of NOK 2.4 million. Amortisation of intangible assets has been charged with NOK 1.5
million in the third quarter (NOK 0.4 million in Q3-2005). Net financial items are recorded with a
deficit of TNOK 151 compared to a deficit of TNOK 82 in the same quarter the previous year.
Total revenues decreased by 34% compared to the second quarter's revenues of MNOK 25.7. Out of
the total sales of MNOK 16.9 in the third quarter, MNOK 15.8 were recorded in MIG (Russia/CIS)
and MNOK 1.1 in the Nordic region.
Nordic region
Royalty income in Q3-06 from the Nordic area increased by 8% compared to second quarter 2005.
Total revenues recorded in Q3-05 were NOK 1.4 million of which NOK 1.0 million derived from the
Nordic area and 0.4 million from MIG (Russia/CIS) prior to the acquisition of the company. Royalty
revenues in the third quarter 2006 were NOK 1.1 million.
A provision of NOK 1.2 million relating to the liquidation process of Nutri Pharma's two Danish
subsidiaries has been released. The operating profit from the Nordic region was NOK 1.6 million
compared to an operating loss of NOK 1.7 million i Q3-2005. Amortisation of Royalty and Patent
rights has been expensed with NOK 0.4 million (Q3-2005: NOK 0.4 million).
Russia/CIS
Compared to second quarter 2006 the revenues in Russia/CIS were reduced by 35%, and both sales
of Nutri Pro and cosmetics products were reduced. MIG achieved a gross margin of 87% from sales
in Q3, even after a stock provision of MNOK 0.8 million. The business segment Russia/CIS delivered
a negative EBITDA of NOK 4.4 million. In Q3-2006 the variable proportion of MIGs costs were 77%
of the revenues, covering cost of goods sold, commissions to distributors and service providers. A cost
of MNOK 3 million for the annual Premium event in Moscow has been expensed in Q3-06.
As from 1 October 2005 Nutri Pharma operates with two business segments; Nordic, with the
existing royalty revenues, and Russia + CIS countries through the direct sales organisation of MIG.
For further segment info. see page 8.
Consolidated Income statement (main figures)
Q3 2006
Q3 2005
16,921
20,876
-3,955
-151
-4,106
-4,106
-0.05
1,367
3,043
-1,676
-82
-1,758
-1,758
-0.02
(Amounts in NOK 000)
Total revenue
Total operating expenses
Result of operations
Net Financial items
Profit/(loss) before taxes
Income tax expense
Profit/(loss) for the period
EPS (NOK)
9M 2006
9M 2005
FY 2005
65,142
71,127
-5,985
-346
-6,331
-6,331
-0.08
3,579
13,862
-10,283
2
-10,281
-10,281
-0.14
25,345
35,088
-9,743
132
-9,611
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
-
-9,611
-0.13
Page 2
Balance sheet (main figures)
(Amounts in NOK 000)
30 Sept 2006
31 Dec 2005
30 Sept 2005
Total non-current assets
Total current assets
Total assets
104,922
12,366
117,288
105,913
14,204
120,117
7,292
10,700
17,992
Total equity
Total liabilities
Total equity and liabilities
36,074
81,214
117,288
18,712
101,405
120,117
16,794
1.198
17,992
Financial performance January - September 2006
The consolidated loss for the period is MNOK 6.3 (MNOK -10.3), and the EBITDA result shows a loss of
MNOK 1.5 (MNOK -9.2). The Nordic operation has achieved an operating profit of MNOK 0.6 and
Russia/CIS a deficit of MNOK 6.9 respectively. For segment information see page 8.
Total revenue for the first 9 months is MNOK 65.1 compared to MNOK 3.6 last year which was
royalty revenues from the Nordic area only. Royalty revenue from Nordic is MNOK 3.5 million in 2006.
Sales revenue in Russia/CIS is MNOK 61.6 this year (MNOK 0.4). The nutrition products Nutrilett and
NutriPro accounts for 64% of total sales revenue in 2006.
Total operating expenses increased from MNOK 13.9 last year (only Nordic) to MNOK 71.1 for the first
nine months of 2006. Operating expenses from the Nordic operation are MNOK 4.8 in 2006. Total
amortization costs in 2006 are MNOK 4.5, of which MNOK 3.4 relates to the Software platform in MIG
and MNOK 1.1 to royalty assets in Nutri Pharma ASA. The comparable amortization costs in 2005 were
MNOK 1.1 relating to royalty assets in Nordic.
Net financial expense is TNOK 346, compared to finance revenue of TNOK 2 in the same period of 2005.
Cash and other liquid assets were MNOK 4.2 as of September 30 2006, compared to MNOK 6.6 as of June
30 2006. There has been no further financing activities in this quarter.
Commercial Update
Nordic
Nutrilett, which is distributed through Orkla subsidiary Collett Pharma, as one of their core product lines,
continues to show a growing trend. The market segment for nutrition and weight management is increasing
in the Nordic market and Nutrilett is the market leader. In Q3-2006 sales from Collett Pharma increased by
17% compared to the Third Quarter of 2005.
Russia and CIS countries
With revenues of MNOK 15.8 in the Third Quarter, MIG experienced a revenue decrease of 35% compared
to the second quarter. The implementation of the new commission plan this autumn has not yet lead to
increased sales. However, considerable cost cutting has reduced the break-even to a level where we do not
foresee any need for further financing going forward.
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 3
Oslo, 16 November 2006
The Board of Directors of Nutri Pharma ASA
FOR FURTHER INFORMATION:
Trond Syvertsen, CEO
+47 23 31 08 80
For information about Nutri Pharma, Nutri Pharma products, Nutri Pharma management and Nutri Pharma
financial performance, please point your web browser to: www.nutripharma.com
For information about Meridian International Group (MIG), please point your web browser to:
http://www.meridianinternational.net/public/home/home-welcome.asp
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 4
Accounting Principles
The consolidated financial statements for the third quarter have been prepared in accordance with the
statutory regulations governing the Stock Exchange, the Oslo Stock Exchange’s own rules and IAS 34
“Interim Financial Reporting”. The accounting policies used are consistent with those used in the Annual
Financial Statements. The interim financial statements do not include all the information that is required of
a complete set of year-end financial statements, and should therefore be read in conjunction with the
consolidated annual financial statements for 2005. The Annual report for 2005 can be obtained upon
request to the company’s head office, or from its website: www.nutripharma.com
Income Statement
Amount in NOK '000
Nutri Pharma Consolidated - IFRS
July 1 - Sept 30
Jan 1 - Sept 30
Q3 2006
Q3 2005
9m 2006
9m 2005
FY 2005
REVENUE
15,863
1,058
16,921
388
979
1,367
61,638
3,504
65,142
388
3,191
3,579
20,821
4,524
25,345
Cost of goods sold
Personnel costs
Depreciation of intangible and tangible fixed assets
Other operating expenses
Total operating expenses
2,021
499
1,531
16,825
20,876
454
362
2,227
3,043
5,977
1,795
4,455
58,900
71,127
1,998
1,086
10,778
13,862
504
2,488
2,549
29,547
35,088
RESULT FROM OPERATIONS
-3,955
-1,676
-5,985
-10,283
-9,743
-151
-82
-346
2
132
-4,106
-1,758
-6,331
-10,281
-9,611
-
-
-
-4,106
-1,758
-6,331
-10,281
-9,611
-0.05
-0.02
-0.08
-0.14
-0.13
Net sales revenues
Royalty income
Total revenue
OPERATING EXPENSES
FINANCIAL INCOME AND EXPENSES
Net financial income and expenses
PROFIT BEFORE TAXES
Income tax expense
PROFIT FOR THE PERIOD
Earnings per share/diluted earnings per share
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
-
-
Page 5
Balance Sheet
Nutri Pharma Consolidated - IFRS
Amount in NOK '000
30 Sept 2006
31 Dec 2005
30 Sept 2005
NON CURRENT ASSETS
Intangible non-current assets
Patent and royalty assets
Goodwill
Software platform
Distributor lists
Total intangible non - current assets
5,843
64,699
18,561
15,819
104,922
6,929
62,325
21,342
15,317
105,913
7,292
Total non - current assets
104,922
105,913
7,292
Debtors
Accounts receivable
Other short term receivables
Total debtors
1,349
2,092
3,441
1,563
1,744
3,307
5,673
505
6,178
Stocks
4,768
4,853
-
Short term Investments
Bonds and certificates
Total short term Investments
1,997
1,997
3,448
3,448
4,132
4,132
Cash and bank deposits
Cash and bank deposits
2,160
2,596
390
12,366
14,204
10,700
117,288
120,117
17,992
Issued capital
Treasury shares
Retained earnings
Translation differences
Total capital
19,668
11,794
4,612
36,074
19,668
-1,500
-1,076
1,620
18,712
19,668
-1,500
-1,374
Total equity
36,074
18,712
16,794
3,516
114
15,330
62,254
81,214
3,570
105
12,903
84,827
101,405
79
1,119
1,198
117,288
120,117
17,992
7,292
CURRENT ASSETS
Total current assets
TOTAL ASSETS
EQUITY
16,794
LIABILITIES
Current liabilities
Accounts payable
Public duties payable
Short term loans
Other current liabilities
Total liabilities
TOTAL EQUITY AND LIABILITIES
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 6
Cash Flow Statement
Consolidated IFRS
Amount in NOK '000
July 1 - Sept 30
Q3 2006
Q3 2005
Jan 1 - Sept 30
9m 2006
9m 2005
FY 2005
Cash flow from operations
Profit before taxes
Depreciation and amorization
Change in stocks
Change in accounts receivables
Change in accounts payable
Change in other provisions
Net cash flow from operations
-4,106
1,531
162
558
538
-1,254
-2,571
-1,758
362
-317
-2,012
840
-2,885
-6,330
4,455
85
214
-54
-2,130
-3,760
-10,281
1,086
-5,154
-27
-685
-15,061
-9,611
2,549
-81
113
-9,429
-1,615
-18,074
467
2,682
1,451
12,290
467
2,682
1,451
1,850
14,140
12,975
1,392
1,850
16,217
139
139
-
1,873
1,873
-
3,142
3,142
-1,965
-203
-436
-921
1,285
Cash assets at beginning period
4,125
593
2,596
1,311
1,311
Cash assets at end period
2,160
390
2,160
390
2,596
Cash flow from investments
Changes in bonds and certificates
Acquisition of subsidiary net of Cash
Proceeds from sales of own shares
Net cash flow from investments
Cash flow from financing
Short term loans
Net cash flow from financing
Net cash flow
Consolidated statement of changes in equity
for the period ended 30 Sept 2006
IFRS
NOK 1.000
YTD-2006
At 1 January 2006 IFRS
YTD-2005
Issued
capital
19,668
Treasury
Shares
-1,500
-1,076
Foreign currency translation
Profit for the year
Sale of treasury shares
At 30 Sept 2006 IFRS
19,668
1,500
0
-6,330
19,200
11,794
At 1 January 2005 IFRS
19,668
-1,625
6,810
Foreign currency translation
Profit for the year
Sale of treasury shares
FY-2005
Retained
earnings
Translation
differences
Total
equity
1,620
18,712
2,992
4,612
2,992
-6,330
20,700
36,074
373
25,226
-10,282
0
-10,282
125
1,725
1,850
At 30 Sept 2005 IFRS
19,668
-1,500
-1,747
373
16,794
At 1 January 2005 IFRS
19,668
-1,625
6,810
373
25,226
1,247
125
1,725
-9,611
1,247
1,850
-9,611
-1,500
-1,076
1,620
18,712
Foreign currency translation
Sale of treasury shares
Profit for the year
At 31 December 2005 IFRS
19,668
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 7
Segment information
The primary reporting format is determined to be business segments as the Group's risks and rates of return
are affected predominantly by differences in the products services sold. Secondary information is reported
geographically. The operating businesses are organized and managed separately according to the nature of
the products and services provided, with each segment representing a strategic business unit that offers
different products and serves different markets.
Following the acquisition of MIG Ltd Nutri Pharma operates with two business segments; Nordic, with the
existing royalty revenues, and Russia + CIS countries through the direct sales organisation of MIG
Transfer prices between business segments are set on an arm's length basis in a manner similar to
transactions with third parties. Segment revenue, segment expense and segment result include transfers
between business segments. Those transfers are eliminated in consolidation.
The group's geographical segments are based on the location of the Group's assets. Sales to external
customers disclosed in geographical segments are based on the geographical location of its customers.
Business segment
(NOK 1000)
Nordic
Russia + CIS
Eliminations
9M 2006
FY 2005
9M 2006
FY 2005
61,638
20,821
3,504
3,504
1,889
5,393
0
4,524
4,524
1,007
5,531
61,638
20,821
61,638
Segment result
Unallocated revenue
612
-9,771
Operating result
Net finance
Income taxes
Profit for the year
611
1
Sales
Royalty
Total revenue
Inter segment sales
Revenue
Assets and liabilities
Assets
Total assets
Other business segment information
(NOK 1000)
Segment liabilities
Not allocated liabilities
Total liabilities
Amortisation
Investments
Impairment
Geography
(NOK 1000)
Revenue from external customers
Segment Assets
Investments
Consolidated
9M 2006
FY 2005
20,821
61,638
3,504
65,142
0
65,142
20,821
4,524
25,345
0
25,345
-6,942
160
-6,330
-9,611
-10,045
274
-6,595
-347
303
-143
612
-9,771
-6,942
160
0
0
-5,984
-346
0
-6,330
-9,742
131
0
-9,611
9,286
9,286
12,548
12,548
108,002 107,568
108,002 107,568
0
117,288 120,117
0 117,288 120,117
FY 2005
95,005
0
95,005
1,449
0
0
Russia + CIS
9M 2006
FY 2005
27,262
22,860
0
0
27,262
22,860
3,368
1,100
0
0
0
0
Nordic
9M 2006
72,600
0
72,600
1,087
0
0
Nordic
9M 2006
3,504
9,286
0
FY 2005
4,136
12,548
0
9M 2006
1,889
Russia + CIS
9M 2006
61,638
108,002
0
FY 2005
1,007
Eliminations
9M 2006
FY 2005
18,649
16,461
18,649
16,461
Consolidated
9M 2006
FY 2005
81,213
101,405
0
0
81,213
101,405
4,455
2,549
0
0
0
0
Consolidated
FY 2005
9M 2006
21,209
65,142
107,568
117,288
0
0
FY 2005
25,345
120,117
0
Nutri Pharma ASA
Kronprinsesse Märthas pl. 1, Vika, 0166 Oslo, Norway. Tel: + 47 23 31 08 80, Fax: + 47 23 31 08 90.
Page 8