Wessanen Profits Decline in Q2

In line with the strategic direction, Tree of Life UK was sold effectively per 18 July. In the first half of 2011, it reported net revenue of €20 million (2010: €41 million).

Jul 27 2011 --- Wessanen has reported that Q2 revenue increased 1.1% to €195.7 million, including a negative currency effect of (2.8)% (a weaker British pound and US dollar). Autonomous growth was 2.3% with price/mix contributing 1.0% and volume 1.3%. Wessanen Europe Grocery continued to grow at a good autonomous rate, while also ABC continued its strong sales performance in the second quarter. This growth was partly offset by Wessanen Europe HFS and Frozen Foods which both reported lower revenue, due to lower volumes.

Normalised EBIT increased to €11.8 million (Q2 2010: €10.9 million) with Wessanen Europe Grocery, ABC and Non-allocated contributing to this increase. EBIT amounted to €7.4 million mainly as a result of an impairment loss at Tree of Life UK of €(3.3) million and exceptional costs of €(1.0) million, of which €(1.4) million for Kalisterra, partly offset by a €0.3 million release of a restructuring provision at Wessanen Europe Grocery.

Net financing costs decreased to €(0.9) million (Q2 2010: €(1.7) million) in part due to a decrease in average long-term debt and the termination of an Interest Rate Swap early April 2010. Total income taxes were €(1.0) million (Q2 2010: ?(1.4) million). Net result attributable to equity holders amounted to €5.4 million (Q2 2010: €6.6 million), a year-on-year decrease due to exceptional items impacting operating profit, partly compensated by lower net financing costs and income taxes. Earnings per share amounted to €0.07 (Q2 2010: €0.08).

Operating cash flow from continuing operations (after interest and income tax paid) was €1.9 million, mainly as a result of the realised EBITDA, an increase in working capital (€6.6 million) and income taxes paid (€4.3 million).

In line with the strategic direction, Tree of Life UK was sold effectively per 18 July. In the first half of 2011, it reported net revenue of €20 million (2010: €41 million). An impairment of €3.3 million is reported under EBIT. An exchange loss deferred in equity of €2.1 million will be reported on divestment under EBIT in Q3 2011.

In addition, an agreement was reached for the sale of Kalisterra mid July with the closing expected per 1 October. It realised net revenue of €14 million in 2010. Following classification as held for sale, a book loss of €1.4 million was reported under EBIT in this quarter.

Piet Hein Merckens, Wessanen CEO, comments: "Our second quarter reconfirmed the continuous progress we are making as a company. The strategy is clear, we are more focused and in better shape and we have stronger market positions, although we still have to improve our performance in multiple areas. Increasingly we are implementing one consistent way of working in different areas such as brand activation, innovation process, central sourcing, operational excellence and ICT.”

“Despite a subdued European economy, awareness and appreciation for organic food continue to grow. Wessanen is well-placed to benefit due to its European presence and strong pioneering organic brands. Our Grocery operations continue to grow, driven by a focus on our core brands, innovations, brand activation and more consistent execution.”