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PRESS RELEASE
Ter Beke 2005 half-year results
Ter Beke confirms
prospects for 2005
notwithstanding difficult first six months
Waarschoot,
September 9, 2005.
Preliminary
remark
As
of the 2005 financial year, Ter Beke is reporting under the International Financial
Reporting Standards (IFRS). In order to ensure comparability, the figures from 2004
have also been converted in accordance with these standards. The impact of this conversion
on the figures together with a detailed explanation can be found in the Investor
Relations module.
1. Headlines for 1st half of 2005
Some key figures:
Turnover increases by 16% from 99.9 million to 115.5 million
Result after tax declines by 11.5% to 2.1 million against 2.3 million in 2004, partly as a result of significant additional marketing investments in the first year-half 2005 and of the IFRS conversion.
The strong increase in processed meats sales was mainly realised through the acquisition of Langeveld/Sleegers in the Netherlands.
The growth in sales of chilled Mediterranean ready meals in the first half of 2005 is almost entirely compensated by the loss of an important contract in Spain in the second half of 2004.
The prospects for the 2005 annual result are being maintained.
2
. Consolidated key figures for 1st half of 2005
2.1.
Income statement
| 000 Euros | 30/06/2005 |
30/06/2004 |
D % |
| Income (net turnover) | 115.520 | 99.961 | 15.6 |
| Operating result | 3.913 | 4.700 | -16.7 |
| Net financing costs | -607 | -386 | -57.3 |
| Result of company activities after net financing costs | 3.306 | 4.314 | -23.4 |
| Taxes | -1.198 | -1.931 | -37.9 |
| Profit after tax | 2.108 | 2.383 | -11.5 |
| Group share | 2.108 | 2.383 | -11.5 |
| Net cash flow * | 7.472 | 7.589 | -1.5 |
| EBITDA ** | 9.277 | 9.906 | -6.3 |
2.2 Key figures per share (on 6-month basis)
| In EUR per share | 30/06/2005 |
30/06/2004 |
D % |
| Number of shares | 1,368,867 | 911,594 | 50.2 |
| Net cash flow * | 5.46 | 8.32 | -34.4 |
| Profit after tax | 1.54 | 2.61 | -41.0 |
| EBITDA ** | 6.78 | 10.86 | -37.6 |
*
Net cash flow: profit after tax + depreciation + impairments + movements in provisions
**
EBITDA = operating result + depreciation + impairments + movements in provisions
3.
Notes to the accounts
3.1.
Turnover
The
first 6 months of 2005 showed a slight decline in consumption in the FMCG market
(fast-moving consumer goods) in more or less all the European countries, compared
against the same period of the previous year.
The
increase in the Ter Beke turnover by 16% from 99.9 million to 115.5 million
is mainly the result of the Langeveld/Sleegers acquisition in the Netherlands, but
even neutralising that there is a slight increase in turnover.
The
effect of this acquisition is obviously expressed entirely in the increased turnover
in processed meats sales.
In
line with the trend of recent years, we note strong growth in the sale of pre-packaged
meats linked to ongoing pressure on sales of over-the-counter products via the traditional
channel.
The
increase in turnover in chilled Mediterranean ready meals is more or less entirely
cancelled out by the loss of a contract with an important Spanish retailer.
In
the food-service channel, Ter Beke is building on a number of new contracts and partnerships
that will lead to a further increase in turnover in line with the existing development
plan.
On
the customer side, it is notable that the large retailers are putting further pressure
on prices, and with that, on the margins of the producers/suppliers. This partly
explains why the increase in turnover does not translate into a corresponding increase
in profit.
3.2
Come a Casa
With
the re-launch of the Come a Casa "Naturalmente" product line, Ter Beke
succeeded in increasing its market share in the lasagne segment. The entire Come
a Casa line obtained the highly regarded "Saveur de l'année 2005" quality-award
in France, thanks to determined efforts as regards innovation and continuous improvement
of recipes.
3.3
Operating result
The
evolution of the operating result is, apart from the pressure on margins as mentioned
above, mainly due to the investment in marketing and sales, and more specifically
in the Come a Casa brand. As previously mentioned, Ter Beke has decided to spend
the 1.5 million interest charges, which are no longer incurred as a result of
the ACO conversion on 29 December 2004, in the development of products and brand.
This investment was largely carried out in the first half of 2005 and is set against
the operating result. Under IFRS, these aforementioned interest charges are not
included in the 2004 result, but charged as a dividend to equity.
A
second important factor concerns the amortizations that increased by around 0.9
million. This is the result firstly of the Langeveld/Sleegers acquisition, and secondly
of the investment programme that was carried out in the second half of 2004.
These
cost increases are only partly compensated by firstly the increased operating result
owing to the inclusion of Langeveld/Sleegers in the consolidation, and secondly the
absence of goodwill impairment in 2005 under IFRS.
3.4
Net financing costs
The
financing costs increased by around 0.2 million as a result of the financing
of investments and of the acquisition of Langeveld/Sleegers. This acquisition was
entirely financed with external funds. After this financing, Ter Beke still maintains
a sound equity ratio (31.0% on the balance total as against 36.7 % on 31 December
2004).
3.5
Investments
Ter
Beke is maintaining levels of investment in its growth and invested approximately
5 million in its production plants in the first half of the year.
In
this first half-year we completed the expansion and modernisation of the production
halls in our factory in Alby (Fr), and the filling installations at the salami factory
in Waarschoot and the pasta line in Marche-en-Famenne were renewed.
The
study concerning a major automation project in our lasagne factory at Wanze was also
completed. The operational start-up of this project is expected towards the end of
2005.
The
total investment programme that Ter Beke will carry out this year amounts to
12.5 million.
3.6
Taxes
Tax
costs amount to 1.2 million (36.2 %) on 30 June 2005 against 1.9 million
(44.8%) on 30 June 2004. This change is predominantly the consequence of changes
in deferred taxes, which Ter Beke acknowledges in accordance with IFRS guidelines.
Under
the IFRS, the tax charge covers the deferred taxes on the Luxembourg captive structure.
Also, under the IFRS the entire historical deferred tax liability pertaining to
this captive structure is included in the balance, for an amount of around 10
million on 30 June 2005.
On
30 June 2005, Ter Beke NV initiated legal proceedings against the Belgian Government
to dispute the tax charges relating to this captive structure. Ter Beke and its legal
advisers are convinced that they hold strong arguments that confirm the validity
and justification of the above-mentioned insurance structure and at the same time
the invalidity of the tax authority's argument. For this reason, Ter Beke is of the
opinion that all the necessary elements are present to encourage faith in a favourable
outcome of this legal procedure.
3.7
IFRS
In
accordance with the CESR (Committee of European Securities Regulators) Recommendation
03-323e of December 2003 and the memorandum of the BFIC (FMI/2004-1) of March 2004,
it was decided to compile the interim report for the first half of 2005 in accordance
with the national reporting principles and the inclusion and evaluation principles
of the IFRS but without complying with the presentation requirements of "IAS-34
- Interim financial reporting". The first full IFRS annual report, including
segment reporting, will be that for the financial year ending on 31 December 2005.
4.
Prospects
Despite
the weaker first half and without deterioration in the market environment, Ter Beke
expects to obtain a better result over the whole of 2005 than in 2004.
5.
Financial service provision
In
accordance with the Circular from the Banking, Financing and Insurance Commission
we report that the financial services with respect to the Ter Beke share are provided
by the following financial institutions: Fortis Bank, ING Bank, KBC, Bank Degroof
and Petercam NV.
6.
Statutory Auditor's report on the half-year information of 30 June 2005
To
the Board of Directors
We
have performed a limited review of the consolidated balance sheet and income statement
(jointly the "interim financial information") of Ter Beke NV for the six
months period ended June 30, 2005. This interim financial information has been prepared
under the responsibility of the Board of Directors.
Per
December 31, 2005, the consolidated annual accounts of the group will be prepared
in accordance with International Financial Reporting Standards as adopted for use
in the EU. The consolidated interim report has been prepared in accordance with the
recognition and measurement criteria which the Board of Directors expects to use
for the preparation of the first consolidated annual accounts for the year 2005 prepared
on the basis of IFRS as adopted by the European Union
We
draw the attention to the fact that these accounting policies might be subject to
changes to the extend it is possible that the IFRS as adopted by the European Union
change before 31 December 2005. In that case, retrospective changes to the interim
period for the six months period ended June 30, 2005 might have to be applied.
We
conducted our limited review in accordance with the recommended standards of the
Belgian Institute of Company Auditors on limited reviews. A limited review consists
principally of making enquiries of group management and applying analytical procedures
to the financial information and underlying financial data. A limited review is substantially
less profound than a full audit performed on the annual consolidated accounts in
accordance with the standards of the Belgian Institute of Company Auditors on consolidated
annual accounts. Accordingly, we do not express an audit opinion.
Based
on our limited review, no elements or facts have come to our attention that causes
us to believe that the interim financial information for the six months period ended
June 30, 2005 is not prepared in accordance with legal and regulatory requirements
and the recognition and measurement criteria of IFRS as adopted by the European Union.
September
2, 2005
The
Statutory Auditor
DELOITTE
Bedrijfsrevisoren BV o.v.v.e. CVBA
Represented
by Dirk Van Vlaenderen
For
further information, please contact:
| Media Luc De Bruyckere Chairman Telephone: +32 9 370 13 00 E-mail: luc.debruyckere@terbeke.be |
Investor
Relations Marc Hofman Vice President 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)
- achieved a gross turnover of over 200 million in 2004
- is a producer of 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.