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2010 Annual Report Highlights
Message from the chairman
TER BEKE CONFIRMS EXCELLENT RESULTS
2010 had to be the confirmation year for our group. After we had achieved first-rate results in 2009, a year that was generally recognised as an economic ‘annus horribilis’, we did everything in our power to make 2010 an even better year.
I am delighted to be able to announce that the expected confirmation has indeed taken place.
Once again, Ter Beke achieved excellent results in 2010.
Thanks to a consolidated net turnover growth of 2.5% the group reached and surpassed the symbolic summit of EUR 400 million turnover to end the year at EUR 402.2 million. Turnover growth was slowed down to a certain extent by developments of raw material prices and the general pressure on prices in the market.
The Processed Meats Division turnover grew by 1.5% to EUR 277.3 million. This positive development was the result of both growth in the service slicing activities in the Netherlands and growth in the traditional processed meat activities in our home markets. This resulted in an increased market share in the Belgian market.
In the Ready Meals Division turnover rose by 4.7% to EUR 124.9 million, despite a weak third quarter. Turnover growth in this division was due to an increase in volume in the international markets and a rise in sales of products under the Come a casa® brand in Belgium. In 2010 we invested substantially in our brand by revising our recipes, developing new packaging and conducting an extensive promotional campaign which included three intensive television advertising campaigns.
In the annual report you can read more about the positive developments in the activities of our two business units.
In 2010 the EBITDA rose by 6.7% from EUR 35.2 million to EUR 37.5 million. The results from business activities (EBIT) increased by no less than 18.0% from EUR 15.1 million to EUR 17.8 million. The increase in these results is mainly attributable to growth in volume, further efficiency improvements throughout the supply chain and our continued efforts in the areas of cost control and cost reductions.
Our group consolidated net result after tax comes out at EUR 10.5 million, which is an increase of 26.7% compared to the previous year.
At the same time in 2010 we invested more than EUR 24 million in material fixed assets. The primary investment project in the Processed Meats Division concerned extensive automation of the paté production in Wommelgem. You will read more about it in this report. In the Ready Meals Division we continued to invest in production and the optimisation of the manufacturing facilities at Wanze and Marche-en-Famenne and in further improvements in the supply chain.
At the same time we have invested in more efficient energy use and in sustainable production at all our locations. We are fully aware of the importance of sustainability, and we have put a great deal of effort into the quality of our products and processes, food safety, health and a balanced diet, sustainable energy management and the prevention and reduction of waste. Our group works closely with universities and research institutes and conducts much applied fundamental research and product development in its own research centres. In 2010 we also worked closely with Flanders’ Food, the Flemish Government’s innovation arm, which is chaired by Mr Eddy Van der Pluym, director of our group.
Two significant events occurred in 2010 that I would like to mention here:
On 14 October 2010 our new slicing plant and value-added logistics platform in Wijchen (Netherlands) became operational. From the end of 2010, we have centralised all slicing activities that were previously carried out in Milsbeek to that location. In 2011 we will gradually transfer all logistics activities for the Netherlands to this platform. This will make our services and logistics activities in the Netherlands more efficient.
The signing of an agreement with the shareholders of the French Stefano Toselli® on 30 September 2010 with a view to establishing a joint venture was strategically very significant. The main objective of this joint venture would be to commercialise lasagne and pasta meals in Central and Eastern Europe. In the business plan we are also evaluating constructing a production site in Central Europe, which would manufacture exclusively for the Central and Eastern European markets. Market and location studies were performed and the actual collaboration should be able to start on short term.
On behalf of the Board of Directors, I would like to thank the entire Ter Beke team for the excellent quantitative and qualitative results achieved in 2010.
Given the positive development of the results, the Board of Directors will put forward a proposal to the General Meeting of Shareholders to increase the gross dividend from EUR 2.35 per share to EUR 2.50 per share for 2010. With this we wish to maintain a proper balance between the needs of the company and a competitive remuneration for our shareholders.
In 2011 we will continue to work on growth and on improving the profitability of our activities in both divisions. We will continue to optimise our logistics in the Netherlands and we hope to achieve the first successes in Central and Eastern Europe with our joint venture.
We will also continue to invest in our brand Come a casa® and we will continue to work on our mutually trusting relationship with our customers and with the consumer.
We are confident that we can consolidate growth in both divisions and that a further improvement in results can be realised in 2011, save for any unforeseen circumstances.
Luc De Bruyckere, Chairman