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PRESS RELEASE
Annual results 2006 Ter Beke Group
Net result Ter Beke matches result of last year
Waarschoot, 28 February 2007
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Headlines 2006
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Key figures of the Group:
- Total turnover increases by 38.3% from 236.2 million EUR to 326.7 million EUR;
- Result after taxes matches 2005 result, at 5.9 million EUR;
- Net cash flow rises by 17.6%, from 16.8 million EUR to 19.8 million EUR;
- Processed Meats Division:
- Most important event in 2006: merger of the division with the Pluma group;
- Strong sales increase (58.5%), realised mainly through the merger of the division with the Pluma group and the success of sliced and packaged meats;
- Successful integration of processed meat activities of Pluma and Ter Beke within the established timeframe.
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Ready Meals Division:
- Strong sales increase (13.5 %);
- Come a Casa: intensive market and brand investments lead to further increase in market share.
- Extra costs as a consequence of investments in the technical reliability of the production facility in Wanze.
- Strong volume growth in France coupled with increased margin pressure and significant inefficiency at the production facility in Alby-sur-Chéran lead to weak result in the fourth quarter.
- Filialisation of the 2 core activities of the group.
- Proposal to maintain gross dividend of 2.10 EUR/share
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Key figures of the Group:
- Consolidated key figures for 2006
2.1 Profit and loss statement
| ´000 EURO | 2006 | 2005 | % | |
| Revenue (net turnover) | 326,718 | 236,238 | 38.3 | |
| Resul of operating activities (EBIT) | 10,106 | 10,700 | -5.6 | |
| Net financing costs | -2,369 | -1,367 | 73.3 | |
| Result of operating activities after net financing costs (EBT) | 7,737 | 9,333 | -17.1 | |
| Taxes | -1,764 | -3,384 | -47.9 | |
| Result after taxes (EAT) | 5,973 | 5,949 | 0.4 | |
| Result attributable to the group | 5,973 | 5,949 | 0.4 | |
| Net cash flow* | 19,848 | 16,881 | 17.6 | |
| EBITDA** | 23,981 | 21,632 | 10.9 | |
| Equity | 71,715 | 45,359 | 58.1 | |
| Net financial debts | 56,458 | 28,863 | 95.6 | |
| Equity / Total assets (in %) | 34.5 | 33.7 | 2.4 |
2.2 Key figures per share
| In EUR per share | 2006 | 2005 | % | |
| Number of shares as of 31/12 | 1,722,971 | 1,369,017 | 25.9 | |
| Average number of shares*** | 1,588,088 | 1,366,698 | 16.2 | |
| Net cash flow* | 12.5 | 12.3 | 1.6 | |
| Result after taxes | 3.8 | 4.3 | -11.6 | |
| EBITDA** | 15.1 | 15.8 | -4.4 |
* Net cash flow: result after taxes + depreciation + impairment
+ fluctuations in provisions
** EBITDA: result of operating activities + depreciation + impairment +
fluctuations in provisions
*** Under IFRS figures per share must be reported over the average number of
shares of the period. As a consequence of the creation of 342,254 new shares on
18 May 2006 and the conversion of a number of warrants on the one hand and the
realised net result on the other, the profit per share is temporarily lower.
3. Opinion of the Statutory Auditor
The Statutory Auditor, DELOITTE Bedrijfsrevisoren BV o.v.v.e. CVBA, represented
by Mr 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 for distribution of gross dividend of 2.10 EUR per
share
In accordance with the evolution of the result
after taxes, the Board of Directors will propose to the General Meeting of
Shareholders, as it did with regard to 2005, that over 2006 a gross dividend be
distributed of 2.10 EUR per share (net: 1,575 EUR).
In doing so, 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
Processed meats - The strong sales
increase is predominantly the result of the merger with Pluma (which was
exhaustively reported on in earlier press releases), but also on a like for like
basis, a turnover increase of 3.7% was realised. In line with the trend of the
last years, we observe a strong increase in the sale of sliced and packaged meat
products versus a decrease in the sales of over the counter meat products.
Ready meals - The strong sales increase in the ready meals division is a
confirmation of the trend of the last few years. Sales are growing in all sales
channels and for all product groups. Both sales of private label products and
sales of products under the brand Come a casa are rising considerably. The
market share of Come a casa continues to increase, particularly on the Belgian
market, and the brand plays a leading role in the growth of the ready meals
category of the most important retail clients.
5.2. Result of operating activities
The result of operating activities has decreased
by 0.6 million EUR (- 5.6%) in comparison with 2005.
The integration of Pluma on the one hand and the filialisation of the 2 core
activities into 2 separate branches on the other hand, led to considerable extra
expenditures in 2006. Ter Beke opted for this determined form of divisioning
because it wished to create for both divisions the best and most flexible
starting point for realising their respective growth strategies, in light of the
strongly differing market environments.
In addition, the increase of depreciations by approximately 3.8 million EUR had
a negative influence on the result of 2006. This increase is mainly due to the
merger with Pluma and to the implementation of the investment programme for
2005-2006.
Notwithstanding the strong sales increase in the ready meals division, the
result of this division decreased.
Ter Beke continued its market investments in 2006, particularly in the brand
Come a casa in Belgium and France, which led to new introductions and strong
volume growth. The significant increase in sales on the French market,
particularly in the fourth quarter, resulted in considerable inefficiencies in
the production site in Alby-sur-Chéran. In addition (as we already stated at the
publication of the result of the first semester), the results in 2006 were also
negatively influenced by increased raw material prices (in particular in the
third quarter), increased energy prices and a number of additional expenses
relating to investments in the technical reliability of the production facility
in Wanze. Finally, a number of contracts were signed at a margin that was too
low.
In the processed meats division a claim of 1.5 million EUR was successfully
deflected, allowing the provision that had been set aside for this claim to be
reversed.
5.3. Net financing costs
Financing costs rose by 1.0 million EUR. This is
mainly due to the merger with Pluma. The cash portion of the transaction price
was financed entirely with external means. In addition the financing costs of
the Pluma group were included in the consolidation as of 1 April 2006.
The equity ratio equals 34.5% as of 31 December 2006 (compared to 33.7% as of 31
December 2005).
5.4.
Investments
In 2006 Ter Beke invested more than 16.7 million
EUR in tangible fixed assets.
Important investment projects included a number of new slicing and packaging
lines for processed meats, the legally required replacement of freon-based
cooling installations, the renovation of maturing and drying installations at
the Waarschoot facility, the further automation of the production lines for
ready meals in Wanze and Marche and Famenne, and accelerated investments in
additional capacity in the ready meals division.
5.5. Taxes
The decrease in the tax percentage from 36.3% in
2005 to 22.8% in 2006 is mainly the result of the realisation of previously
unrecognised deferred tax claims in the Netherlands and the United Kingdom, as
well as the effect of the notional interest deduction and the decreased tax rate
in the Netherlands.
6. Most important events after the end of the financial year
On 11 January 2007 the processed meats division
TerBeke-Pluma took over 100% of the shares of the English company SDF Foods
Limited. This company has been active for over twenty years in the distribution
of processed meats in the English market and will allow TerBeke-Pluma to
reinforce its position in that market.
On 15 February 2007 Ter Beke announced that it was investigating for its ready
meals division FreshMeals the possible takeover of the French manufacturer of
fresh pasta meals Normandie Plats Cuisinés (NPC). To this end Ter Beke signed an
exclusive purchase option agreement with the shareholders of NPC. It is the
intention of the parties to finalise the due diligence process in the second
trimester of 2007 and, depending upon the outcome, to establish a final
contract.
7. Prospects for 2007
In 2007 Ter Beke will continue to invest in the efficiency and expansion of its
production facilities and the reinforcement of the market position of its two
branches.
The group expects to be able to further benefit from the merger of its processed
meats activities with Pluma
In 2007, FreshMeals will focus on enhancing the profitability level. Along with
the practical implementation of the filialisation, this will give rise to
additional costs in 2007.
The envisaged acquisition of Normandie Plats Cuisinés is being carefully
considered and the effects of this possible acquisition cannot be determined at
this moment.
8. Financial calendar
| Business update, 2007 first quarter: | : 11 may 2007 after close of exchanges | |
| General Meeting 2007 | : 31 may 2007 at 11:00 hours | |
| Half year results 2007 | : 31 august 2007 after close of exchanges |
If you have further questions, please feel free to contact:
| Media Luc De Bruyckere Executive Chairman Telephone: +32 9 370 13 17 E-mail: luc.debruyckere@terbeke.be |
Investor
Relations René Stevens Group CFO Telephone: +32 9 370 13 45 E-mail: rené.stevens@terbeke.be |
TER BEKE IN BRIEF
Ter Beke (Euronext Brussels: TERB) is an innovating Belgian fresh foods group,
selling its range of products in 10 European countries. The group has 2 core
activities: processed meats and fresh ready meals; it has 9 industrial
establishments in Belgium, the Netherlands and France and employs circa 1,700
people.
Processed Meats Division: Ter Beke-Pluma NV
- Manufacturer of fine processed meats for the Benelux and paté for Germany and the United Kingdom
- 5 production plants in Belgium (Wommelgem, Waarschoot, Marche-en-Famenne, Herstal and Ruiselede) and 3 centres for the slicing and packaging of processed meats, 2 of which are in Belgium (Wommelgem and Veurne) and 1 in the Netherlands (Milsbeek)
- Innovating in the segment of pre-packed processed meats
- Distribution brands and own brand names L´Ardennaise, Daniël Coopman and Pluma
- Circa 900 employees
Ready Meals Division: FreshMeals NV
- Manufacturer of fresh ready meals for the European market
- Market leader in fresh lasagne in Europe
- 3 manufacturing plants, 2 of which are in Belgium (Wanze and Marche-en-Famenne) and 1 in France (Alby-sur-Chéran)
- Brand names Come a Casa, Pronto and Vamos, besides distribution brands
- Circa 800 employees