Utrecht, Febrary 28, 2006
Revenue in Q4-05 was EUR 489 million or 2% below last year. Full year revenue
decreased by 10%, mainly caused by the strong decrease in the first half of the
Solid increase EBITAE North America Distribution from EUR (5) million negative
in Q4-04 to EUR 6 million in Q4-05.
All activities now report positive EBITAE over the full year. In total, 2005
EBITAE increased with EUR 14 million (25%) to EUR 72 million (FY-04: EUR 57
Private Label operations to be divested in 2006 to focus on brands and
Marie-Christine Lombard, member of the Board of Management of TNT, to be
nominated as new member of the Supervisory Board at the upcoming AGM.
Ad Veenhof, Wessanen CEO, said: “Our results reflect three major developments.
First of all, coming from a dramatic low and loss-making situation in 2003 and
part of 2004, we are now seeing tremendous operational and financial progress.
Margins have recovered and are moving toward the targets we have set for
ourselves for the end of 2007. And after a year of eliminating loss-making
products and business relationships, revenue is now beginning to gain momentum
thanks to many new business initiatives as well as growth with key customers.
Secondly, we have to operate in a market that is becoming more and more
competitive every day. This means we have to be flexible, focused and
determined. We have to increase the speed at which we improve and innovate.
This has led us to the decision to divest our Private Label activities.
Although they could be of benefit to our branded operations, further aligning
our Private Label activities will simply cost too much effort and investments
which we need to spend on our key strategic areas of branding and distribution.
Thirdly, this year’s level of exceptional items was higher than anticipated.
Although we had projected exceptional expenses for the restructuring of our
distribution business in North America, the process took more time and money
than originally planned. Also, extra expenses were incurred from restructuring
initiatives which were needed to keep the Private Label activities competitive.
Furthermore, in our projections we anticipated an exceptional income from the
sale of several buildings and offices before the end of the year, but this
process is somewhat delayed to ensure a maximum return.
All in all, the year 2005 proved to be one in which we have established the
fundamentals – such as healthy margins, a funnel filled with innovations and
solid sales growth with existing customers – needed to realize our year-end
2007 targets. In 2006, we will increase our focus on the core of our business,
the branding and distribution of authentic, Health and Premium Taste food
products, and speed up innovations even more.”
The year 2006 should be seen in the context of the strategic and financial
targets set for year-end 2007. For most of our businesses, excluding North
America Distribution, 2005 EBITAE as a percentage of sales (ROS) is already
close to our 2007 year-end targets and are expected to remain stable in 2006.
Our efforts will now primarily focus on creating growth. The branded operations
in North America and Europe and the European distribution business are expected
to grow approximately 4 to 5% in 2006. Consequently, we expect to be fully on
track to meet the growth and margin objectives for these activities as
previously announced for year-end 2007.
At the North American distribution operations EBITAE as a percentage of sales
is expected to increase to 1.5 to 2% in 2006. Due to limited exceptional
expenses, EBIT is expected to end around 1.5% in 2006. Growth is expected to be
negative in the first half of the year, as the loss of the Ralphs business has
not yet been fully offset by either organic growth or new business. For the
full year, sales of our North American distribution division are expected to
show modest growth.
The restructuring process throughout the company is nearing completion. The
related – limited – expenses are expected to be offset by exceptional income
from premises sold. The sum of exceptional items in 2006 is therefore expected
to be close to zero.
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