Q1-09: Sales hold up, operating profit down

Highlights Increase of 7.1% in revenue to EUR 412.0 million (Q1-08: EUR 384.6 million); organic revenue development was flat. Operating profit of EUR 0.3 million (Q1-08: EUR 12.4 million), including incidental charges of EUR 4.5 million (Q1-08: EUR 1.0 million incidental gain) and a negative currency translation effect of EUR 0.4 million. Net loss of EUR 3.3 million (Q1-08: net profit of EUR 7.2 million). Net cash flow from operating activities of EUR 21.0 million (Q1-08: EUR (2.4) million). Net debt stable at EUR 213.8 million (Q4-08: EUR 214.6 million). Net debt to EBITDAE ratio as at March 31, 2009 of 3.2 (Q4-08: 2.9). Operating result in Q2 2009 expected to be at least at the same level as last year excluding the impact of incidental results. Strategic focus on European natural, organic and specialty foods markets announced on April 22, 2009.

CEO statement Frans Koffrie, Wessanen CEO, comments: "During our Annual General Meeting of Shareholders on April 22, 2009 we announced that Wessanen's strategy going forward is to focus on growing our presence in the natural, organic and specialty food markets in Europe. With our strong market positions and expertise in these particular market segments in Europe, we believe that there are abundant opportunities to grow, both autonomously and through acquisitions, and generate attractive financial returns.

With this decision, Wessanen realigns its business portfolio. As a direct consequence of our focus on Europe, we also announced that we will explore the feasibility of divesting all of our North American branded and distribution businesses, including Tree of Life North America, American Beverage Corporation, PANOS Brands and Liberty Richter. Furthermore, in line with our focus, we have decided to regroup our European activities and to report on the segments 'Wessanen Europe' and 'Frozen Foods' with immediate effect.

In the first quarter, Wessanen Europe experienced a slowdown in consumer demand and competitive pressure from private label at some of our operating companies. These softening market conditions were partly compensated by price increases, new products and product innovations. Sales of our US branded business were significantly lower owing to market softness, competitive pressure and de-stocking, while our US distribution business showed growth as compared to last year, excluding currency movements.

Despite a slight improvement in the operating profit of our North American distribution business, our operating result was notably impacted by an operating loss at our North American branded activities, lower operating results in Europe and incidental charges in this first quarter.

For the next quarter, we expect that our operating result, excluding the impact of incidental results, will be at least at the same level as last year. Our cost reduction program will help to offset the impact of weaker demand, but it is still premature to provide a specific outlook for the full year. Reduction of our net debt remains a key priority; we expect a positive cash flow for the remainder of the year.

In the coming months, we will focus our European growth strategy to improve long-term profitability and create economies of scale. We expect to provide more detail in the third quarter of this year, when we have concluded the strategic review of our European business."

For more details, please download the complete document:
090505_Wessanen_Results_Q1_2009_NL.pdf (195 Kb)
090505_Wessanen_Results_Q1_2009_ENG.pdf (194 Kb)

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