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PRESS RELEASE

Ter Beke Group Annual Results 2004

Ter Beke achieves strong profit growth in 2004
Proposal to increase dividend by 11.1% to 1.50 € net per share

1. Headlines

• Key Figures 2004

- Gross turnover up from 198.8 to 213.5 million € (+ 7,4%)
- Net turnover up from 190.2 to 206.3 million € (+ 8,5 %)
- Net current profit up from 5.4 to 6.3 million € (+ 16,5 %)
- Result before income taxes up from 6.6 to 7.9 million € (+ 19,8 %)
- Net result after income taxes up from 4.2 to 5.0 million € (+ 19,9 %)
 

• further development of the Come a Casa brand with good results

• increase in processed meats sales

• investment program of 19 million € implemented

• acquisition after balance sheet date of Langeveld / Sleegers in the Netherlands

2. Consolidated key figures 2004

Key figures per dividend-entitled share

On 29 December 2004, 450,823 shares were created as a result of the conversion of the ACD in the amount of 25.6 million €. These shares are not entitled to a dividend for 2004, and consequently are left out of consideration for the key figures per share for 2004.

In € per share	2004	2003	D %
Number of dividend-entitled shares	912,344	911,094	0.1 %
EBITDA	22.78	22.63	0.7 %
Operating result	12.49	10.89	14.7 %
Result from ordinary activities	8.70	7.27	19.7 %
Net current profit	6.92	5.95	16.3 %
Result after income taxes (group share)	5.53	4.62	19.7 %
Net cash flow after income taxes	17.09	18.40	( 7.1 %)

3. Opinion of the Statutory Auditor

The Statutory Auditor confirmed that his auditing work, which is essentially completed, did not bring to light any significant correction that would have to be reflected in the accounting information included in this press release. As last year, an explanatory paragraph will be included in the opinion on the annual accounts concerning the uncertainty with regard to the outcome of the ongoing dispute with the tax administration, to which reference is made in this press release.

4. Net dividend up by 11.1 % to 1.50 € per share

The Board of Directors will propose to the General Meeting of Shareholders to distribute a net cash dividend for 2004 of 1.50 € per share. This is an increase of 11.1 % compared to the dividend for 2003.
With this increase the Board of Directors wants to express its appreciation to the shareholders for their support to the company and also to express its confidence in the company´s future development.

5. Notes to the accounts

5.1. Turnover
The gross turnover increased by a total of 7.4% to more than 213 million €. Around 1/3rd of this increase is attributable to the acquisition of DiPasto in France, which was included for 12 months in the 2004 consolidation circle, compared with 6 months in 2003.
At the end of 2004, the fresh Mediterranean ready meals represent around 66% of the sold volume and 52% of the turnover figure.
In 2004 Ter Beke confirms its European market leadership in fresh Mediterranean ready lasagne. The other fresh Mediterranean ready meals (cannelloni, tagliatelle, etc.) also grew vigorously last year, thanks to a strategy focused firstly on brand development and secondly on the production of distribution brands. The existing assortment was strengthened by launching a number of new products, such as deep-pan pizza, fresh Mediterranean soups and new pasta meals.
Ter Beke´s processed meats strategy remains essentially oriented on the Benelux market. Within this market, which on the whole is stable, the pre-cut and pre-packaged processed meats segment is growing. In this market segment, during 2004 Ter Beke invested further in innovations in the assortment and in packaging technologies, so that once again its market share could be increased. Ter Beke´s processed meat sales rose in 2004, thanks to the growth in pâté sales in the Netherlands and in the United Kingdom and the growth in cooked ham and poultry processed meats in the Benelux.

5.2. Come a Casa brand strategy
In 2004 Ter Beke invested further in Come a Casa, its consumer brand for fresh Mediterranean ready meals. The measured brand familiarity has continued to rise, thanks to major promotional activities and television campaigns. During the course of 2004 the assortment under the Come a Casa brand was further expanded with new products. In 2005 this strategy will be continued and Ter Beke also plans to work on developing a position in the French market.

5.3. Presence in all distribution segments
Ter Beke continues to work on its commercial strategy in order to be structurally present in all segments of the market : the traditional segment with primarily the butchers (Benelux), the retail segment in all countries, and the Out-of-Home segment in the Benelux. For this purpose the sales organisations are being reinforced and the marketing infrastructure further elaborated. After the successful start-up in the Out-of-Home segment in Belgium, in 2005 Ter Beke is initiating a similar approach in the Netherlands.

5.4. Investments
In 2004 Ter Beke invested more than 19 million € in the expansion and further modernisation of its production system.
Three major projects were started in 2004. Ter Beke invested in modernising and expanding the pasta production which Ter Beke took over in 2003 in France (DiPasto). This new investment will be operational in April 2005. In Veurne a major investment was made in modern slicing and packaging equipment for processed meats, which has been operational since December 2004. In Marche-en-Famenne, we started building a new, fully-automated pasta line which was completed in the fourth quarter of 2004, as well as starting to modernise and expand the packaging capacity for pâté.
In addition, several projects which had begun in 2003 were completed, such as the new shipping platform in Wanze, which forms the keystone of the programme that was started in 2002 to double the lasagne production capacity, and the new Research and Development Centre for fresh Mediterranean ready meals in Marche-en-Famenne.
In line with the earlier-mentioned multi-year plan for processed meats, the group is working to further upgrade the production complex for maturing and drying salami in Waarschoot and to modernise the production for processed poultry meats in Ruiselede.

5.5. Operating result
The operating result improved by 14.9% to 11.4 million € (+ 1.4 million € compared to 2003), thanks to several elements. The rise in turnover explains more than half of this improvement. The depreciation decreased fell by around 1 million € because assets reached the end of their amortization period in 2003 and 2004 and because several major investments only became operational in the second half of 2004. A large share of the cost improvement was applied for developing the marketing and sales organisation and in the brand investment of Come a Casa.

5.6. Financial results and cash flow
The financial charges increased by 0.1 million €. This is the result of the investments in tangible fixed assets for more than 19 million € compared with a net cash flow of 15.6 million € (16.7 million in 2003). The difference in net cash flow compared to last year is explained by the lower amortizations (see 5.5.). As in the previous year, the financial charges include the interest (6%) on the ACD in the amount of 25.6 million €, which automatically converted on 29 December 2004.

5.7. Income taxes
The average tax charge amounts to 36.9% in 2004, which is comparable to last year. The average tax burden lies around 2% above the average standard assessment rate, primarily because of disallowed expenditures and because Ter Beke opts for a conservative valuation rule with regard to the booking of deferred tax assets.
There are no major developments to report with regard to the ongoing dispute with the tax administration concerning Ter Beke´s own reinsurance company. This dispute originated in 1996 and is discussed in detail in the consolidated annual accounts.

6. Event after the balance sheet date: acquisition of Langeveld Sleegers

As reported in the press release of 1 February 2005, Ter Beke on that date, with retroactive effect from 1 January 2005, took over 100% of the shares of Langeveld Sleegers ("Langeveld").
Langeveld is one of the most important companies in the Netherlands in the area of slicing and packaging of processed meats for the self-service segment. The slicing and pre-packaging activities are done in the site at Milsbeek; the logistical centre is located in nearby Nijmegen.
With this acquisition, Ter Beke has confirmed its strategic choice for fine processed meats as one of its two core businesses (along with fresh Mediterranean ready meals). Through this acquisition of a service specialist without its own production, Ter Beke moreover has strengthened its position in the growth segment of processed meats in a way that reduces its dependency on the raw material price evolutions.
On 31 December 2004, Langeveld had an equity of 4.7 million € on a balance sheet total of 13.3 million €, of which the tangible fixed assets constitute around 10 million €. The net financial debt position amounts to 3.2 million €. The 2004 turnover amounted to 30.3 million € and the profitability is comparable to that of the Ter Beke group, so that the acquisition will make a positive contribution to the consolidated results of Ter Beke from the very first year. On the basis of valuation methods generally applied in the sector (4 to 5x EBITDA) and taking into account the net debt position of Langeveld, it can be said that Ter Beke paid a price which corresponds to the intrinsic value of the company. The payment of a part of the takeover price is associated with the execution of a number of agreements which were made with the selling shareholders.

7. Application of the International accounting standards IFRS

Ter Beke has set up a working group to prepare the transition to the international accounting standards IFRS. The activities are so far along that one can anticipate that the reporting of the half-year results as at 30 June 2005 compared to those of 2004 will take place according to IFRS standards. At that time, a revision of the opening balance sheets per 1 January 2005 and 2004 will also be explained, in order to facilitate comparison of the results.

8. Prospects

Ter Beke will build further on the successful results of 2004 through further international expansion of the group, strengthening of its positions on the domestic market, both in pre-packaged processed meats and in fresh Mediterranean ready meals, extension of the consumer brand Come a Casa, constant innovation in the product range, increased efficiency of the production infrastructure and investments in continuous quality improvements by people and systems.
In the short term we do not expect any major fluctuations in raw material prices.

For more information, please contact:

Media Luc De Bruyckere Chairman Telephone: +32 9 370 13 00 E-mail: luc.debruyckere@terbeke.be

Investor Relations Marc Hofman Managing director Telephone: +32 9 370 13 16 E-mail: m.hofman@terbeke.be

 

Ter Beke in a nutshell

Ter Beke

• is a Belgian fresh food group with 7 production sites, including:
  5 in Belgium (3 for processed meats in Flanders and 2 for fresh Mediterranean ready meals in Wallonia);
  1 in the Netherlands (1 slicing centre with distribution centre);
  1 in France (fresh Mediterranean ready meals)
• achieves a net turnover of over 200 million €
• is a producer of fine processed meats for the Benelux market and fresh Mediterranean ready meals for the European market
• leads in the segment of pre-packaged processed meats
• is market leader in fresh lasagne in Europe
• markets its products under the brand names Come a Casa, L´Ardennaise, Pronto, Daniël Coopman, Vamos and Les Nutons
• is customer-driven and develops and updates products with sustained regularity
• has over 1,200 employees who put their professional skills at the service of the customer and who get every opportunity to develop their talents.