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PRESS RELEASE
2005 Annual Results Ter Beke
Group
Strong growth in turnover
and results
Proposal to increase gross dividend by 5% from 2 € to 2.10 €
Waarschoot, 24 February 2006
-
Headlines 2005
- A few key figures:
- Turnover up by 18%, from 200 million to 236.2 million EUR
- Result after income taxes up by 18%, from 5 million to 5.9 million EUR
- Strong 2nd half of the year in turnover and results
- Investments in the Come a casa brand lead to major introductions in the French retail sector
- Processed Meats division grows mainly through acquisition of Langeveld-Sleegers
- Investments in tangible fixed assets in the amount of 13 million EUR
- Proposal to increase gross dividend by 5% from 2 € to 2.1 € per share
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Consolidated key figures 2005
2.1 Profit and loss account
‘000 EURO 2005 2004 % Revenue (net turnover) 236,238 200,035 18.1 Results of operating activities 10,700 10,172 5.2 Net finance costs -1,367 -820 -66.7 Result of operating activities after finance costs 9,333 9,352 -0.2 Tax expense -3,384 -4,322 21.7 Profit 5,949 5,030 18.2 Profit attributable to equity holders of the parent 5,949 5,030 18.2 Net cash flow* 16,881 15,713 7.4 EBITDA** 21,632 20,855 3.7 Equity 45,359 41,101 10.4 Net financial debts 28,863 13,666 111.2 Equity / total assets (in %) 33.7 36.7 -8.2
2.2 Key figures per share
In EUR per share 2005 2004 % Number of shares 1,369,017 1,363,167 0.4 Net cash flow* 12.3 11.5 7.0 Basic earnings per share 4.3 3.7 17.8 EBITDA** 15.8 15.3 3.3
* Net cash flow: result after tax + depreciations + impairments + movements in provisions
** EBITDA: result of operating activities + depreciations + impairments + movements in provisions3. Opinion of the Statutory Auditor
The Statutory Auditor, DELOITTE Bedrijfsrevisoren BV o.v.v.e. CVBA, represented by Dirk Van Vlaenderen, confirmed that his auditing work, which is essentially completed, did not bring to light any significant correction, which would have to be reflected in the accounting information included in this press release.
4. Proposal to increase gross dividend by 5% from 2 to 2.1 €The Board of Directors will propose to the General Meeting of Shareholders to distribute a gross dividend for 2005 of 2.10 € per share (net: 1.575 €). This is an increase of 5% compared to the dividend for 2004.
With this increase, the Board of Directors wishes to maintain a proper balance between the company's needs and the recognition of the shareholders for their support, as well as to express its confidence in the company's future development.
5. Notes to the accounts
5.1. Turnover
The strong 18.1% rise in turnover from 200 to 236.2 million EUR is primarily the result of the Langeveld-Sleegers acquisition in the Netherlands (about which detailed information was given in our press releases of 1/02/´05, 24/02/´05 and 9/09/´05); however, a slight turnover increase is recorded even with the same consolidation circle.
In line with the trend of recent years, in the processed meats sector we are seeing a sharp rise in the sale of pre-packaged processed meats and a simultaneous decline in the sale of over-the-counter products.
The turnover increase in the sector of fresh Mediterranean ready meals continues the trend of recent years. Only the already-mentioned loss of a contract with a major Spanish retailer prevented even stronger growth.
In the food service channel, Ter Beke is steadily expanding via new contracts and cooperations, primarily aimed at professional kitchens, schools and hospitals. The participation in Horeca Expo was crowned with several new major introductions.
From the customer side, we find that the major retailers are continuing to push for price reductions, which is putting the margins of the producers/suppliers under pressure.
5.2. Come a Casa
After the relaunch of the Come a casa "Naturalmente" product line in the first half of the year, in the second half Ter Beke launched the Come a casa "Equilibre" line, on the basis of a balanced nutrition concept (more vegetables and fruit, less fat, less salt), with which Come a casa meets the demands of consumers, who increasingly wish for a more balanced diet.
In France, the entire Come a casa line earned the fiercely coveted quality distinction "Saveur de l´Année 2005", thanks to the extensive efforts on innovation and continuous improvement of recipes.
Ter Beke invested heavily in the Come a casa brand in the Belgian and French markets, and saw its efforts rewarded with several important introductions to major French retailers.
5.3. Results of operating activities
The results of operating activities rose by 0.5 million Eur (+ 5.2%) compared to last year. This means that Ter Beke more than made up for the decline in the first half of the year (-0.8 million or - 16.7%).
As was reported in the press release on the half-year figures, this decline was largely attributable to the extra investment in marketing and sales, and more specifically in the Come a casa brand. These costs were mainly incurred in the first half of 2005 and were charged entirely against the results of operating activities.
Another major factor is the increase in depreciations, which rose by around 2 million EUR. This is primarily the result of the acquisition of Langeveld-Sleegers and the 2004-2005-investment programme.
These cost increases were completely offset by the increase in the results of operating activities deriving from the inclusion of Langeveld-Sleegers in the consolidation and the absence of impairments on goodwill in 2005.
5.4. Net Finance costs
Finance costs rose by 0.5 million EUR. This is primarily the consequence of financing the investments and the Langeveld-Sleegers acquisition, the latter having been financed entirely with outside funds. The equity ratio after the acquisition amounts to 33.7% at the end of 2005 (vis-à-vis 36.7% at the end of 2004).
5.5. Investments
In 2005 Ter Beke invested well over 13 million EUR in tangible fixed assets.
The expansion and modernisation of the production infrastructure of our factory in Alby-sur-Chéran (France) was completed. Along with the next phase of upgrading the cooling plant and a general renovation of the original factory in Waarschoot, the filling installations for the salami plant (Waarschoot) were modernised. In Marche-en-Famenne a new production line for pasta meals was installed. Both in Veurne and in Marche and Milsbeek (Netherlands), various packaging lines were renovated. A fully automated cardboard box nailing line was one of the new installations in the Wanze plan.
5.6. Income taxes
The decrease in the tax percentage from 46.2% in 2004 to 36.3% in 2005 is mainly the consequence of the impairments on goodwill in 2004, which constituted a non-deductible tax expense.
5.7. IFRS
As provided by law, Ter Beke will be publishing complete IFRS annual accounts with accompanying notes for the financial year ending on 31 December 2005. The figures in this press release for 31 December 2005 and 2004 are in complete agreement with this. This explains why the figures for 2004 differ from those in the press release on 2004 under Belgian valuation rules.
Under IFRS, the full deferred tax liability on the Luxembourg captive structure is included in the balance sheet. The opinion of the Statutory Auditor on the consolidated annual accounts as at 31 December 2005 therefore no longer includes an explanatory section on this.
Under IFRS, the automatically convertible debenture, which at the end of December 2004 was converted into capital, is regarded as equity. In 2004 the interest on this loan was therefore not booked via the profit and loss account, but via retained earnings. In order to guarantee the comparability of the ratios per share, with 2004 we have used the number of effective shares as at 31 December 2004 (1,363,167) and not the number of dividend-entitled shares on the same date (911,344), as used in the reporting under the Belgian valuation rules.
6. Prospects
In 2006 Ter Beke will continue to invest in the growth and quality of its market position and in the Come a casa brand, particularly in Belgium and France.
Market conditions remaining the same, we expect further endogenous growth in turnover; Ter Beke will reinvest the income from this growth in the long-term quality of its market position and organisation, in both processed meats and ready meals.
7. Financial calendar
Update on first quarter of 2006 : beginning of May 2006 General Meeting of Shareholders 2006 : 24 May 2006 Half-year results 2006 : 8 September 2006
For more information, please contact:
Media
Luc De Bruyckere
President
Telephone: +32 (0)9 370 13 00
E-mail: luc.debruyckere@terbeke.beInvestor Relations
Marc Hofman
Executive Director
Telephone: +32 (0)9 370 13 16
E-mail: m.hofman@terbeke.beTer Beke in brief
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 (cutting and packaging of processed meats);
1 in France (Mediterranean ready meals)- in 2005 achieved a turnover of over 236 million EUR and a net result of almost 6 million EUR
- 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.