2009 Q2 Results: Operating result in line with outlook, but bottom line affected by impairments

Utrecht, July 29, 2009

Financial results
* Increase of 4.8% in revenue to EUR 408.5 million
* Reported operating loss of EUR 5.4 million (operating profit of EUR 7.3 million, excluding impairments and other incidental results at ABC)
* Net loss of EUR 84.6 million, mainly owing to EUR 80.6 million deferred tax asset write off
* Net cash flow from operating activities of EUR 4.4 million
* Net debt further reduced by EUR 10.1 million to EUR 203.7 million

Operational & strategic highlights
* Strategic review of Wessanen Europe and divestment process Tree of Life on track
* Equity of Royal Wessanen nv as at year end 2008 overstated by EUR 14.6 million due to reporting irregularities at ABC; recovery program in progress
* Amended credit facility provides more headroom in leverage

CEO statement

Frans Koffrie, Wessanen CEO, comments: “The operating result in the second quarter, excluding North America Branded, amounted to EUR 7.0 million, which is slightly higher than last year’s EUR 6.1 million, excluding incidental gains. Our European and North American businesses performed well, with revenue and comparable operating profit approximately at the same level as last year. The bottom line performance of the Group in the second quarter of this year was significantly tainted by the deferred tax asset write-downs and impairment charges at ABC.

The investigation into reporting irregularities at ABC has nearly been finalized and a forensic investigation has been initiated. We conclude that the equity position at Royal Wessanen nv at year end 2008 was overstated by approximately EUR 15 million, some EUR 5 million higher than indicated on June 15, 2009. The review to divest ABC has been put on hold, while a recovery plan is in progress to ensure that the business will be profitable again. Nevertheless, we still intend to pursue a divestment of ABC in due course. The investigation into a possible divestment of Tree of Life is progressing in line with expectations, and has not been affected by the events at ABC.

We are very pleased with the additional headroom provided to us in the amended main credit facility. The increased tolerance for leverage (net debt/EBITDAE) allows for the impact of operating losses at ABC incurred during the first half year in 2009 and provides us a sensible timeframe to divest our North American businesses. Our net debt continued to decline this quarter to EUR 204 million.

We are making progress in formulating our European growth strategy. We expect to provide more detail later this year, when we have concluded the strategic review of our European business.”

For more details, please download the complete document:
090729_Q2_2009_ENG_DEF.pdf (184 Kb)
090729_Q2_2009_NL_DEF.pdf (185 Kb)

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