Wessanen: Branded businesses grow; TOL NA no improvement yet

Utrecht, November 3, 2006

Highlights Total revenue in Q3-06 was EUR 367.2 million (Q3-05: EUR 399.9 million). Currency effect contributed EUR 11 million negatively. Growth in branded businesses in Europe and North America and Europe Distribution; TOL NA revenue declined at same level as previous quarters. EBITAE was EUR 11.4 million in Q3-06 (Q3-05: EUR 13.2 million); EBITAE margin decreased from 3.3% in Q3-05 to 3.1% in the period. EBIT amounted to EUR 7.3 million in Q3-06 (Q3-05: EUR 4.2 million). Profit was EUR 5.8 million in Q3-06 (Q3-05: EUR 6.0 million). Operational cash flow generated from continuing operations increased in the first nine months of 2006 to EUR 44.5 million from EUR 37.5 million in the same period last year. Adjusted FY2006 revenue outlook.

CEO statement Ad Veenhof, Wessanen CEO, comments: “In general, we see improvements in our branded sales performance, in particular in Europe, whereas our North American distribution business is not yet showing the progress that we had anticipated for the second half of this year.

Our European brands are showing encouraging progress in sales as compared to previous quarters and last year. EBITAE for Europe Branded is somewhat lower in this third quarter compared to last year, which is mainly the result of higher investments in advertising and promotion to support several launches.

In North America, sales volumes of our branded business show continued momentum, although negatively impacted primarily by an incidental third-party transportation delay at the end of the quarter. Profit margins at North America Branded are up again, underlining the continuing progress made in this part of the North American business.

We expect both our European and our North American branded businesses to continue to grow with approximately 5% in the fourth quarter.

European distribution sales continue to stay ahead of last year. EBITAE for this segment remains at the same level mainly due to higher promotional support.

Our North American distribution top line performance in the third quarter of last year was positively impacted by a USD 7 million exceptional for credit memos. After exceptionals, the revenue decline remains at the same level as the first two quarters of the year. Top ten customers continued to grow. Despite the revenue decline in what is generally the lowest quarter at Tree of Life NA, a small profit was achieved, as costs are well under control. A number of contracts with new vendors who used to do the distribution themselves (USD 20-25 million annually) will start to take effect late this year. In addition, we expect more new business to be announced before the end of the year.

The divestment process of our Private Label activities is progressing according to schedule.”

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For more information, please contact Corporate Communications, phone +31 (0)30 298 88 31; e-mail corporate.communications@wessanen.com.
061103_Q3_2006_ENG_final.pdf (233 Kb)
061103_Q3_2006_NL_final.pdf (239 Kb)

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