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PRESS RELEASE
CONSOLIDATED RESULTS FOR THE FIRST HALF OF 2008
Waarschoot, 29 August 2008
KEY FIGURES AND HEADLINES
- Ter Beke Group:
- Total turnover increases by 8.3% from EUR 177.4 million to EUR 192.1 million
- EBIT increases by 15.8% from EUR 5.2 million to EUR 6 million;
- Result after taxes increases by 6.2% to EUR 2.72 million compared to EUR 2.56 million in 2007;
- Net cash flow increases by 6.1% from EUR 10.8 million to EUR 11.4 million
- Increasing raw material prices and the drop of the British Pound put pressure on the margin;
- Processed Meats Division TerBeke-Pluma:
- Increase in turnover by 12.1%, mainly thanks to the results of Berkhout which was taken over in September 2007;
- Continuing growth in prepackaged processed meats;
- Ready Meals Division FreshMeals:
- Further improvement of profitability;
- Reorganisation of production activities in France.
CONSOLIDATED KEY FIGURES FIRST HALF OF 2008
Income statement in 000 Euro
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* Net cash flow: Result after taxes + depreciation + impairment + fluctuations in provisions
** EBITDA: result of operating activities + depreciation + impairment + fluctuations in provisions
*** REBITDA: EBITDA from recurring operating activities
Financial position in 000 Euro
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Key figures in Euro per share
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NOTES TO THE CONSOLIDATED KEY FIGURES
3.1 Turnover
The Ter Beke group opts to improve the profitability level of its activities.
The total turnover of the group increases in the first six months by 8.3% from EUR 177.4 to EUR 192.1 million.
The turnover of the ready meals division increased by EUR 0.9 million (+1.4%). This slight increase in turnover is the result of the continuing autonomous growth of the division on the one hand and on the other hand the termination by FreshMeals of a number of important volume contracts, mainly in France, which were concluded at a margin that was too low.
The turnover of the processed meats division increases by EUR 13.9 million (+12.1%). This increase in turnover is mainly the result of the acquisition of the Dutch Berkhout Verssnijlijn in September 2007. With the same consolidation circle the turnover decreases slightly. This is the net effect of different movements. On the one hand the growth in the European retail compensates the decrease of the sales in the traditional bulk channels. On the other hand a number of volume contracts were terminated with Belgian and German discounters.
The turnover increased for all major existing customers thanks to amongst others the introduction of new and further improved products in both divisions. In the first half of 2008 an agreement was reached with Weight Watchers® for the launch of ready meals (lasagne and pizza) in Belgium. In the Netherlands the range of prepackaged processed meats was further expanded.
3.2. Results of operating activities
The EBITDA increases by EUR 1.3 million (+9.9%) from EUR 13.4 million in 2007 to 14.7 million in 2008. The EBITDA result of 2008 includes a one-off reorganisation cost of EUR 0.6 million with regard to the French activities. A provision was set up in 2007 in this respect (see infra regarding non-cash costs). The REBITDA result therefore amounts to EUR 15.3 million (+14.1%).
As announced earlier, the significant increase of the raw material prices also put pressure on the margins in 2008 because this increase could only be partly charged in the sales prices. In the first half of 2008 the group was unable to charge more than EUR 1 million in raw material prices in the sales prices. Moreover, the margin in the processed meats division is under extra pressure because of the exchange rate evolution of the British Pound, which resulted in a loss of EUR 0.9 million in the first half of the year. The group has covered itself against further drops of the British Pound.
The effects of the unrecovered raw material price increases and the negative exchange rate evolution of the British Pound were compensated by the results of Berkhout Verssnijlijn, a further increased efficiency in the production activities, an improved product mix and the reduction of the structural costs.
Depreciations increase by EUR 1.2 million, mainly following the take-over of Berkhout Verssnijlijn and the further implementation of the 2007-2008 investment programme. The group invested EUR 8.5 million in the first half of 2008. On the other hand approximately EUR 0.6 million of the provision set up in 2007 for the reorganisation of the French activities was used. The increase of the total non-cash costs is therefore limited to EUR 0.5 million.
All this results in an increase of the EBIT by 15.8% from EUR 5.2 million in 2007 to EUR 6.0 million in 2008.
3.3 Net financing costs
The increase of the net financing costs by EUR 0.7 million is mainly the result of the external financing of the take-over of Berkhout Verssnijlijn (EUR 0.4 million) and EUR 0.3 million in exchange rate losses on trade receivables expressed in Pound Sterling.
3.4 Taxes
The tax rate in the first half of 2008 (26.3%) is practically in-line with the tax rate of the comparable period of 2007 (27.2%).
On 6 May 2008 Ter Beke won the legal dispute in appeal with the Belgian tax authorities regarding the Luxembourg captive reinsurance structure. The authorities have confirmed they will not appeal to the Supreme Court. This decision has no influence on the consolidated EBITDA-result of the Group. However, the group is currently investigating the consequences of this decision on the consolidated tax position.
PROSPECTS FOR 2008
In 2008 the group will continue to work on improving the profitability of the activities, both in its processed meats division TerBeke-Pluma and in its ready meals division FreshMeals.
The market is still facing a significant increase in raw material prices which will have to be charged on in the sales prices.
Unless the market environment significantly deteriorates, the group expects that the result for the full year 2008 will exceed the result of 2007.
FINANCIAL CALENDAR
| Business update third quarter 2008 | 12 November 2008, after trading hours | |
| Annual result 2008 | 19 February 2009, after trading hours | |
| Annual report 2008 | At the latest 30 April 2009 | |
| Business update first quarter 2009 | 8 May 2009, after trading hours | |
| General meeting 2009 | 28 May 2009 at 11.00 | |
| Half year result 2009 | 28 August 2009, after trading hours |
HALF YEARLY FINANCIAL REPORT
The half yearly financial report of the group is available on www.terbeke.com in the Investor Relations module under Other Financial Info.
The half yearly financial report contains the condensed consolidated financial statements drawn up in accordance with IAS 34, the approving opinion without reservation of the auditor and the other legally required specifications.
CONTACTS
If you have any questions regarding this press release or for further information, please contact:
| Marc Hofman Managing Director Tel.: +32 (0)3 370 13 16 E-mail: m.hofman@terbeke.be |
René Stevens CFO Tel.: +32 (0)9 370 13 45 E-mail: rene.stevens@terbeke.be |
TER BEKE IN BRIEF
Ter Beke (Euronext Brussels: TERB) is an innovative Belgian fresh food group selling its range of products in 10 European countries. The group has 2 core businesses: processed meats and fresh ready meals, possesses 10 industrial sites in Belgium, the Netherlands and France and counts about 1,800 people. In 2008, Ter Beke recorded a turnover of 393 million EUR.
Processed Meats Division: Ter Beke-Pluma
- Producer of processed meats for the Benelux, the United Kingdom and Germany;
- 4 production sites in Belgium (Wommelgem, Waarschoot, Marche-en-Famenne and Herstal) and 5 centres for slicing and packaging of processed meats, including 2 in Belgium (Wommelgem and Veurne) and 3 in the Netherlands (Milsbeek, Ridderkerk and Hendrik Ido Ambacht);
- Innovative in the segment of pre-packaged processed meats;
- Distribution brands and own brand names L´Ardennaise and Daniël Coopman;
- Approximately 1050 employees.
Ready Meals Division: FreshMeals
- Producer of fresh ready meals for the European market;
- Europe market leader in fresh lasagne;
- 3 production sites, including 2 in Belgium (Wanze and Marche-en-Famenne) and 1 in France (Alby-sur-Chéran);
- Brand names Come a Casa, Pronto and Vamos along with distribution brands;
- Approximately 750 employees