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Wessanen (Konin) NV (31NJ)

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Thursday 28 November, 2002

Wessanen (Konin) NV

Wessanen 3rd quarter results

Wessanen (Koninklijke) NV
28 November 2002


AmstelveenNovember 26, 2002
(08:00 a.m.)

Results Wessanen support Wellness strategy

Third quarter 2002 compared to third quarter 2001:

  • EBITA current activities increased 29% to EUR 18.7 million (EUR 14.5
    million in 2001)
  • Net sales from current activities decreased 3% to EUR 678.2 million (EUR
    701.8 million in 2001)
  • Sales of Tree of Life Europe grew 22% to EUR 101.1 million (EUR 83.1
    million in 2001), of which 4% was autonomous growth
  • Sales of natural food in the United States grew 13% to EUR 118.2 million,
    sales in specialty food declined 4% to EUR 261.4 million

  • Implementation structural organizational measures at Tree of Life NA,
    including a review of the value of the IT system
  • Balance sheet and debt position undiminished strong: EBITDA/interest ratio
    6.4 (5.4 in 2001)
  • Outlook for 2002 is maintained: profit per share EUR 0.71 before
    amortization of goodwill and exceptional income and expenses.
  • Extraordinary income due to the sale of Leerdammer Company expected of
    about EUR 100 million and an exceptional charge of approximately EUR 30
    million due to the partial write-off of the IT system and reorganization of
    Cereals in the United Kingdom.

Comments of Mac Zondervan, Chairman of the Executive Board

'The development of our result in the third quarter shows the validity of our
strategy while underlining those operational aspects where further improvement
is necessary.

Our focus on the consumer's demand for high-quality, healthy, tasty and
convenient food is successful: this market continues to grow. This is reflected
in growth of 22% in the third quarter at Tree of Life Europe (TOL E), including
4% autonomous growth, and the progress made by our strong brands in Europe.
Although the sales and results in the United States (US) as a whole were
disappointing, even here we saw our sales in natural foods rise by 13%. That the
Wellness consumer cares about convenience as well as health was evident from the
strong performance of the Convenience Food Group (CFG) of which the result
(EBITA) increased no less than 17%.

Amidst all these positive aspects, certain activities require further
improvement, particularly in the US. After sealing the partnership with Wild
Oats and losing two large customers, we are faced with a major operational
challenge that is vigorously taken up.

Sales at Wild Oats are already surpassing expectations. Also more than two
hundred jobs have been shed to reduce costs. However, in view of the difficult
market conditions resulting from the price pressure that the retail is exerting
on us and our suppliers, we continue to take the measures that are necessary to
improve the flexibility and efficiency of the organization.

Part of this is the review of the investments we made in the IT system based on
our experiences in the region where the system is operational as well as the
changed requirements of the organization. This will result in a still to be
confirmed one-off charge of approximately EUR 20 to 25 million.

Finally, an important step in the implementation of our strategy was made in the
third quarter with the announcement of the sale of Leerdammer Company to
Fromageries Bel at an attractive price of EUR 190 million. '

Outlook

Wessanen expects the net sales for the last quarter of 2002 to be in line with
the same quarter last year for the current activities. Besides lower results at
Cereals, the results of Tree of Life North America (TOL NA) will be considerably
less than the same period last year. This is expected to be only partly offset
by better results at TOL E, CFG and Dairy Europe.

In the past quarter Wessanen announced the sale of Leerdammer Company. This is
expected to result in a book profit of approximately EUR 100 million and to be
closed in December. The partial write-off of the IT system of TOL NA as well as
a reorganization of our Cereals activities in the United Kingdom will lead to a
one-off charge of approximately EUR 30 million before taxes.

Wessanen maintains its outlook for 2002 and 2003 as stated with the publication
of the half-year results in August 2002. This means for this year earnings per
share of EUR 0.71, based on a net profit of EUR 50 million before goodwill
amortization and exceptional income and expenses. This assumes a dollar rate of
0.98 to the Euro for the second half of 2002.

For 2003 this means EUR 0.82 earnings per share.

Key Figures:
In millions euro, unless stated otherwise                                                      pro forma*
                                                            Third quarter   Third quarter   Third quarter
                                                                     2002            2001            2001
                                                                                                     

Net sales                                                           678.2         1,055.7           701.8
EBITA                                                                18.7            29.9            14.5

Net income from ordinary activities before amortization
goodwill                                                             11.8            16.1

ROS                                                                  2.8%            2.8%            2.1%

Average capital employed                                            641.5           975.3

ROI                                                                 11.7%           12.3%

Increase economic premium                                             5.8          (16.1)

Average goodwill                                                    509.4           708.5

ROIC                                                                 6.5%            7.1%

EBITDA/interest ratio                                                 6.4             5.4

                                                                                               pro forma*
                                                            9 months 2002   9 months 2001   9 months 2001
In millions euro, unless stated otherwise                                                   

Net sales                                                         2,127.7         3,171.4         2,159.9
EBITA                                                                55.3            93.6            57.7

Net income from ordinary activities before amortization
of goodwill                                                          33.4            57.8

ROS                                                                  2.6%            3.0%            2.7%

Average capital employed                                            680.9           986.2

ROI                                                                 10.8%           12.7%

Increase economic premium                                             4.9          (37.9)

Average goodwill                                                    549.0           677.7

ROIC                                                                 6.0%            7.5%

Group equity as a percentage of total assets                        43.8%           48.6%

EBITDA/interest ratio                                                 6.9             4.3

*Current activities, excluding dairy US, GFI and participation Campari



Results per group in the third quarter of 2002

Tree of Life Europe

In millions euro, unless stated otherwise   Third quarter 2002     Third quarter   9 months 2002   9 months 2001
                                                                            2001

Net sales                                                101.1              83.1           299.9           243.3
EBITA                                                      5.3               5.0            16.4            13.5
ROS                                                       5.2%              6.0%            5.5%            5.5%

TOL E showed excellent sales growth of 22%, including solid autonomous growth of
4% mainly thanks to more effective marketing and strong brand development. The
buoyant performance of strong brands such as Bjorg and Gayelord Hauser confirm
this. In addition, the EBITA also received a positive impulse from the
contribution of the new acquisitions Kallo Foods and Nature's Store as well as
from the cross selling of various brands and products in the group. One example
is Tartex, an important brand in Germany that is now also sold on the French
market through our French organization. The margin (ROS) narrowed due to
incidental lower margins in Germany.

Tree of Life North America

In millions euro, unless stated otherwise   Third quarter 2002     Third quarter   9 months 2002   9 months 2001
                                                                            2001

Net sales                                                410.7             449.3         1,324.2         1,406.2
EBITA                                                      5.0               9.9            26.5            34.8
ROS                                                       1.2%              2.2%            2.0%            2.5%

The US retail sector remains under constant pressure from adverse economic
conditions, which is translating into price pressure on suppliers such as TOL
NA. The realignment in both organization and assortment in response to the
partnership with Wild Oats and the loss of two large customers temporarily
results in more expenses. This is reflected in the results which showed a
disappointing development, as indicated. The adjustment of the organization to
these circumstances through the implementation of more flexible pricing and a
lower cost structure is now in full swing. Overhead costs are being reduced and
more than two hundred jobs have been shed.

A review of the value of the IT (ERP) system will be carried out. This is
expected to result in an exceptional charge of around EUR 20-25 million (before
taxes), based on the experiences in the region in which the system is
operational as well as the changed requirements due to start of the
regionalization process.

Cereals
In millions euro, unless stated           Third quarter 2002  Third quarter 2001   9 months 2002   9 months 2001
otherwise


Net sales                                               56.1                57.6           177.9           171.4
EBITA                                                    1.9                 2.0             6.5             8.5
ROS                                                     3.4%                3.5%            3.7%            5.0%

The net sales decreased, due to the sale of Telford Foods in July 2002, active
in dry soups in the United Kingdom. The autonomous growth of cereals was 5%. The
results were however negatively impacted by the activities in the United
Kingdom. Meanwhile, these problems have been addressed: the product mix will be
adjusted, the production on the Bar line is improved and a far-reaching
reorganization has been planned and announced. The reorganization, involving the
loss of some 70 jobs, will lead to a one-off charge of some EUR 7 million
(before taxes). The measures as taken will have a positive impact on the results
in 2003.

Convenience Food Group
In millions euro, unless stated           Third quarter 2002  Third quarter 2001   9 months 2002   9 months 2001
otherwise


Net sales                                               39.8                39.4           121.6           120.3
EBITA                                                    2.7                 2.3             7.3             6.2
ROS                                                     6.8%                5.8%            6.0%            5.2%

The EBITA of the Convenience Food Group advanced significantly by some 17% with
sales growing 1%. The main contributions came from the strongly improved result
in Germany thanks to the integration of the activities of Karl Kemper into the
Becker's organization and favourable raw material prices.

European Dairy
In millions euro, unless stated           Third quarter 2002  Third quarter 2001   9 months 2002   9 months 2001
otherwise


Net sales                                               70.5                72.4           204.1           218.7
EBITA                                                    5.0               (3.8)             6.4           (0.7)
ROS                                                     7.1%              (5.2%)            3.1%          (0.3%)

In line with the projections, the results in the third quarter of 2002 showed a
structural improvement compared to 2001. This positive trend is expected to
continue further.

The announced sale of Leerdammer Company to Fromageries Bel is expected to be
finalized in December.

Other financial aspects

The balance sheet was strengthened with a rise of the EBITDA/interest ratio to
6.4 (5.4 in 2001).

Cash flow was negatively impacted by the increase in stocks of around EUR 20
million for Wild Oats. Taxes were lower (23%) as a consequence of lower results
in North America. As a result of the sale of Telford Foods an extraordinary
charge in the third quarter of EUR 1 million is reported.

Important dates

February 20, 2003:     Publication of annual figures 2002

April 2, 2003:         General Meeting of Shareholders

May 14, 2003:          Publication of quarterly figures Q1-2003

August 27, 2003:       Publication of half-yearly figures 2003

November 21, 2003:     Publication of quarterly figures Q3-2003

Company Profile

Koninklijke Wessanen nv is a Netherlands-based multinational food group
operating in the European and North American markets. We market, distribute and
produce wellness products that the consumer perceives to be natural and healthy,
easy to prepare or tasty & indulgent. Knowledge of consumer trends and a clear
emphasis on innovation form the basis for growth and continuity in all our
businesses.

Appendix

Third quarter results 2002 - Koninklijke Wessanen nv

        All information about future developments is subject to change.

Note to the editors:

If you have any questions, please contact Timo de Grefte, Staff Director
Corporate Development & Communications, tel: +31 (0) 20 547 95 28; e-mail:
[email protected]



Third quarter results 2002 - Koninklijke Wessanen nv

Consolidated income statement
In millions euro                                          Third quarter   Third quarter        9 months        9 months
                                                                   2002            2001            2002            2001

Net sales                                                         678.2         1,055.7         2,127.7         3,171.4
Operating expenses                                              (659.5)         1,025.8         2,072.4         3,077.8
EBITA (Operating result before amortization of                     18.7            29.9            55.3            93.6
goodwill)
Amortization of goodwill                                          (2.4)           (1.5)           (6.5)           (2.1)
EBIT (Operating result)                                            16.3            28.4            48.8            91.5

Financial income and expenses, net                                (4.5)           (8.1)          (12.5)          (31.6)
Income from ordinary activities before taxes                       11.8            20.3            36.3            59.9
Income taxes                                                      (2.7)           (5.7)          (10.1)          (16.1)
Income from participations and minority interests                   0.3               -             0.7            11.9
Net income from ordinary activities                                 9.4            14.6            26.9            55.7
Extraordinary income and expenses after taxes                     (1.0)           218.6           (1.0)           218.6
Net income                                                          8.4           233.2            25.9           274.3

Net income from ordinary activities before amortization
of goodwill                                                        11.8            16.1            33.4            57.8




Consolidated balance sheet

In millions euro                                                    September 30, 2002                 December 31, 2001

Fixed assets                                                                     539.6                             523.8
Current assets                                                                   780.3                             862.3
                                                                               1,319.9                           1,386.1

Group equity                                                                     578.5                             589.4
Provisions                                                                        48.7                              55.2
Long-term liabilities                                                            167.5                             180.7
Current liabilities                                                              525.2                             560.8
                                                                               1,319.9                           1,386.1


Financial highlights                                    Third quarter    Third quarter    9 months 2002         9 months
                                                                 2002             2001
                                                                                                                    2001
ROS *                                                            2.8%             2.8%             2.6%             3.0%
Average capital employed                                        641.5            975.3            680.9            986.2
ROI **                                                          11.7%            12.3%            10.8%            12.7%
Increase economic premium                                         5.8           (16.1)              4.9           (37.9)
Average goodwill                                                509.4            708.5            549.4            677.7
ROIC ***                                                         6.5%             7.1%             6.0%             7.5%
Group equity as a percentage of total assets                        -                -             43.8            48.6%
EBITDA/interest ratio                                             6.4              5.4              6.9              4.3

Financial information per share (in eurocents)
Net income from ordinary activities before
amortization of goodwill                                         16.8             19.1             47.4             68.5
Net income                                                       11.9            276.5             36.8            324.9
Average number of share outstanding                            70,176           84,331           70,402           84,431
Number of shares as per September 30, 2002, resp.
December 31, 2001                                              72,589           86,725           72,589           86,725

Interim dividend August 2002 - 15.0 eurocents

*     EBITA as percentage of sales
**     EBITA as percentage of the average capital employed, excluding goodwill paid in the past.
***     EBITA as percentage of the average capital employed, including goodwill paid in the past



Consolidated statement of cash flow

In millions euro                                               Third quarter Third quarter       9 months       9 months
                                                                        2002          2001           2002           2001

Operating activities
Net income from ordinary activities after taxes                          9.4          14.6           26.9           55.7
Deprecation property, plant and equipment                                9.9          13.7           30.8           43.6

Amortization goodwill                                                    2.4           1.5            6.5            2.1
                                                                        21.7          29.8           64.2          101.4

Changes in working capital and provisions                             (20.2)           8.4           21.6           33.8
Income form investments in associates and minority                     (0.8)           0.1          (1.7)          (3.3)
interests
Cash flow from operating activities                                      0.7          38.3           84.1          131.9
Investments
Financial and fixed assets                                            (11.3)         (8.6)         (33.1)         (63.5)
Purchase price acquisitions                                           (26.8)        (79.2)         (40.5)        (132.3)
Desinvestments                                                           5.0         723.9            5.0          723.9
Cash flow from investment activities                                  (33.1)         636.1         (68.6)          528.1

Financing
Long-term debts                                                        (1.3)         (3.1)            4.2          (3.1)
Shortterm debts                                                         27.7       (369.4)           25.9        (328.2)
Purchase of own shares                                                 (0.8)         (4.3)          (3.5)          (8.8)
Dividend paid                                                          (9.1)        (11.8)         (40.3)         (49.1)
Issue of shares                                                            -           3.5              -            3.5
Cash flow from financing activities                                     16.5       (385.1)         (13.7)        (385.7)
Change in cash                                                        (15.9)         289.3            1.8          274.3




Change in Shareholders' equity                                           September 30, 2002            December 31, 2001

Balance of beginning year                                                             586.1                        473.1
Net income                                                                             25.9                        239.0
Interim dividend                                                                      (9.6)                       (12.3)
Final dividend                                                                            -                       (30.7)
Goodwill                                                                              (1.7)                         51.0
Translation adjustments                                                              (21.8)                          2.0
Reduction share holders equity                                                            -                      (134.0)
Purchase of own shares for the benefit of personnel options                           (3.5)                        (5.8)
Increase due to exercised personnel options                                               -                          3.8
Balance September 30, 2002, resp. December 31,2001                                    575.4                        586.1


                      This information is provided by RNS
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