9.8.2006: Meldung: Royal Wessanen nv: Zahlen zum 2. Quartal 2006

Press release - Results second quarter 2006 August 9, 2006
Wessanen: second quarter showed continued profit improvement; sales stay somewhat behind

Revenue in Q2-06 was EUR 389 million, against EUR 414 million in the same period last year. Sales at North America Distribution and Europe Branded remained somewhat behind our expectations, whereas North America Branded and Europe Distribution performed well.

EBITAE increased by 16.0% from EUR 13.0 million in Q2-05 to EUR 15.0 million in Q2-06. EBITAE margin rose from 3.1% in Q2-05 to 3.9% in the period.

EBIT has more than doubled to EUR 13.3 million (Q2-05: EUR 5.1 million)

Net profit rose from EUR 10.8 million in Q2-05 to EUR 12.0 million in Q2-06.

Operational cash flow generated from continuing operations increased in the first half of 2006 to EUR 15.2 million from EUR 9.6 million in the same period last year.

Outlook 2006 has been adjusted.

Interim dividend of EUR 0.20, payable on August 22, 2006.

CEO statement
Ad Veenhof, Wessanen CEO, says: "Looking at the results for the first half of the year I am pleased to see that EBITAE is reflecting the expected progression as a result of the various actions taken to improve our bottom line performance. EBIT over the first six months of 2006 more than doubled in comparison with the same period last year, primarily in North America. Furthermore, our brands are generally performing well; recent product introductions are proving to be successful, the latest initiatives have been well received by the trade and quite a number of new exciting introductions are in the pipeline for later this year. However, I realize that the transition period from restructuring to growth is not the easiest phase in our journey. Sometimes we simply need to give it just a little bit more time. Our primary focus is, of course, on our North American Distribution division, where growth is coming somewhat more slowly than expected. We know that this organization is ready for growth, that it has the infrastructure and the team necessary to drive growth. Top line growth is receiving the full attention of management. In Europe, while many of our brands showed progress, that progress was offset by declining markets in the Netherlands and Belgium for Beckers traditional snacks. We had anticipated a faster switch from traditional snacks to more adventurous, premium snacks. Despite these challenges which have prevented some parts of the business from developing as rapidly as anticipated, we are convinced that this will happen in the coming two quarters, based on a solid innovation pipeline in our branded businesses and near-term prospects for extending our customer base at Tree of Life North America."

Adjusted outlook 2006
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, EBITAE as a percentage of sales (ROS) is already close to our 2007 year-end targets and is expected to remain stable or slightly better in 2006 compared to 2005. For the second half of this year, we expect our North American branded business to continue its good performance and our European branded business to start growing based on a solid innovation pipeline. This will compensate for the slight decrease in the first six months, arriving globally for the whole year at a growth of between 2 to 4% (was: 4 to 5%). European distribution business is expected to grow close to 4% (was: 4 to 5%) over the full year 2006. We are fully on track to meet the growth and margin objectives for these three activities as previously announced for year-end 2007. For the full year, sales of our North American distribution division are expected to show a limited decline (was: modest growth). Although somewhat slower than expected, previously terminated contracts are being gradually offset by organic growth and new business. Based on these expectations, EBITAE as a percentage of sales at the North American distribution operations is expected to increase to 1 to 1.5% (was: 1.5 to 2%) in 2006. The focus of this division will be on growing the top line with existing and new customers as well as continuing efficiency improvements in order to reach the year-end 2007 targets. Wessanen"s restructuring process is nearing completion. Exceptional items in the first half of 2006 primarily relate to the completion of activities started in 2005. For Europe, we expect exceptional income and expenses to balance out and together with the overflow of restructuring activities in the United States the total exceptional costs are not expected to exceed the estimated EUR 3 million. 1 from continuing operations (excluding discontinued operations: Dailycer, Delicia and Beckers Germany). The comparative figures for the quarter have been adjusted for proper allocation of the results of Righi (acquired in 2005) for the first half of 2005 to the first respectively second quarter of 2005. Accordingly, sales of EUR 2.3 million and EBITAE of EUR 0.5 million were reallocated from Q2-05 to Q1-05.

Financial summary
Revenue for the quarter was 6% below last year, which was primarily impacted by a slower sales recovery at North America Distribution and Europe Branded. Although we had already anticipated negative sales growth over the first six months at Tree of Life, our top ten customers continue to show solid growth. The European branded business was negatively impacted by a poor performance of Beckers "Classics" snacks, as a result of declining markets. North America Branded, on the other hand, showed a solid improvement in autonomous sales of 6.3%. EBITAE margin continues to improve on a quarterly basis. Exceptional items in Q2-06 amounted to EUR (1.7) million and consisted mainly of an overflow of restructuring costs in the North American distribution business. The cash inflow in the second quarter for continuing operations was EUR 10 million positive; for assets held for sale this amount was EUR 2 million negative. Net debt increased in Q2-06 with EUR 10 million to EUR 143 million, including dividend payments of EUR 32 million.

Highlights second quarter per segment: North America
- Sales to Tree of Life"s top ten customers increased; but a decline in sales to some of the smaller independent supermarket customers, who are facing stiff competition from the large chains, and a decline in sales to natural food stores, had a negative impact on Q2-06 revenue.

- EBITAE for the quarter increased from EUR 2.9 million in Q2-05 (1.1% as a percentage of revenue) to EUR 5.2 million in Q2-06 (2.1% as a percentage of revenue).

- The North American branded division performed well. Own key brands such as Daily"s, KA-ME and Sesmark showed double-digit revenue growth for the quarter.

- New product introductions within North America Branded, such as Daily"s ready-to-drink Bag in a Box cocktail mixes, were well received by distributors and the trade.

Highlights second quarter per segment: Europe
- Revenue for the quarter showed a modest decline compared to the same period last year (EUR 148 million in Q2-05 vs EUR 145 million in Q2-06), mainly caused by declining sales at Beckers "Classics" snacks and the business model change in the Italian Bjorg business.

- EBITAE is in line with the comparable period last year, with slightly higher margins.

- European brands generally developed according to plan and new product introductions are expected to deliver overall growth for the full year.

- Europe Distribution performed better than the same period last year. This can mainly be attributed to improved sales and margins in the Netherlands and Belgium.

- Divestment process of the Private Label business is progressing according to plan.

- Exceptional items of EUR 1 million positive consisted mainly of the result on the sale of buildings.

Company profile
Royal Wessanen nv is a multinational food corporation based in the Netherlands which operates in European and North American markets. We specialize in identifying, developing and distributing premium foods that are authentic and true to their origins. Our brands and products are focused on two sectors: Health foods, most notably natural and organic foods, and Premium Taste foods, including specialties from around the world. We aim to continuously increase our shareholder value by capitalizing on our differentiating capabilities in category management, strong brands, value-added distribution services and transatlantic alignment.
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