Interim / Quarterly Report • Jul 21, 2017
Interim / Quarterly Report
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Rotterdam, 20 July 2017
Half year interim dividend set at € 0.40 per share, equal to H1 2016
Over the first six months of 2017, the consolidated sales recorded by Amsterdam Commodities N.V. (Acomo) increased by 4% to € 354.2 million (H1 2016: € 341.8 million), partly caused by the consolidation of Delinuts (€ 10.8 million). The total gross margin increased by 7% due to Delinuts, and a higher share of value-added products (e.g. SunButter®). Personnel and general costs increased due to Delinuts, and increased processing costs in the US.
The interest expenses decreased due to lower average borrowings, partly offset by higher Libor rates. The effective corporate income tax rate decreased by 0.9 percent point due to a more favourable country mix of the Group's source of profits. H1 2017 net profit of € 17.4 million is 1% above the first half of 2016.
The US dollar remained relatively stable at higher levels compared to H1 2016 versus the euro in the first four months of 2017, but weakened in the last two months. The average euro/US dollar exchange rate of 1.083 in H1 2017 was stronger than H1 2016 (1.117). The FX rate had no material impact on sales and net profit.
The US dollar declined versus the euro at the end of this half year period. The euro/US dollar balance sheet exchange rate on 30 June 2017 was 1.143 versus 1.052 on 31 December 2016. The impact of the FX rate on the consolidated assets was € 12.1 million.
The interim dividend per share is set at € 0.40 in cash, in line with H1 2016. The dividend is payable on 4 August 2017 (ex-dividend date is 25 July 2017).
| H1 2017 | H1 2016 Change % | ||
|---|---|---|---|
| Consolidated figures (in € millions) | |||
| Sales | 354.2 | 341.8 | 4% |
| Gross margin | 60.9 | 57.0 | 7% |
| EBITDA | 28.4 | 28.2 | 1% |
| EBIT | 25.8 | 25.8 | 0% |
| Financial result | -1.6 | -1.6 | 3% |
| Corporate income tax | -6.8 | -7.0 | -3% |
| Net profit | 17.4 | 17.2 | 1% |
| Shareholders' equity (before interim dividend) | 184.9 | 168.7 | 10% |
| Total assets | 346.4 | 340.3 | 2% |
| Ratios | |||
| Solvency | 53.4% | 49.6% | 4% |
| Return on Equity (ROE), annualized | 18.8% | 19.6% | -1% |
| Return On Net Capital Employed (RONCE), annualized | 18.3% | 17.3% | 1% |
| RONCE operating companies (excluding goodwill), annualized | 23.9% | 22.1% | 2% |
| Dividend pay-out ratio | 56.6% | 55.7% | 1% |
| Key performance indicators (in €) | |||
| Earnings per share | 0.714 | 0.718 | 0% |
| Interim dividend per share | 0.40 | 0.40 | 0% |
| Equity per share per 30 June | 7.51 | 7.03 | 7% |
| Share price per 30 June | 28.49 | 21.99 | 30% |
| Market capitalization per 30 June (in millions) | 701.0 | 527.8 | 33% |
| Number of shares outstanding (in thousands) | |||
| Per 30 June | 24,605 | 24,001 | 3% |
'It is satisfying to see that the efforts of our operating companies have resulted in a solid performance in the first half of 2017. Our people have done very well in addressing the challenging market circumstances and their continued search for market opportunities. I am very happy to welcome the Delinuts employees to the Acomo Group and I am confident that Delinuts will develop further within our Group,' said Group Managing Director Allard Goldschmeding.
Catz International in Rotterdam, the Netherlands, realized a net result which was only slightly below the record year 2016. This is an excellent achievement given the challenging market circumstances in which prices of a number of spices halved. Pepper showed a significant downward price trend and so did products like garlic and dried fruits. Cashews prices on the other hand increased by double digits.
Tovano in Maasdijk, the Netherlands, achieved an excellent result, benefiting from good market conditions.
King Nuts & Raaphorst in Bodegraven, the Netherlands, achieved strong margins and an excellent net result. Most nut prices showed an upward trend in the first six months. Brazil nuts in particular experienced a price explosion, due to reduced crops as a consequence of drought in the Amazon region. King Nuts & Raaphorst did an excellent job in handling these market conditions.
Delinuts in Ede, the Netherlands, joined the Acomo Group per 5 May 2017, and performed in May and June ahead of the same months prior year. Delinuts was consolidated per 1 May 2017 and contributed positively to the Group's net profit.
Red River Commodities in Fargo, USA, realized net profit results at the level of H1 2016. A warm and short winter impacted bird food sales in the USA market. Despite lower volumes, Red River Commodities maintained its bird food gross margin. Export sales were lower due to a strong US dollar, world competition and overall low commodity prices. Lower sales to the snack market were compensated by an excellent six months for SunButter® with sales and margin growth well above 20%. Startup company Red River Global Ingredients in Winkler, Canada, began trading activities late in 2016 with a focus on specialty grains and pulses. H1 2017 was in line with company expectations.
Red River-van Eck in Zevenbergen, the Netherlands, experienced a difficult poppy seed market the past six months due to very soft market conditions. The net result was substantially below prior year.
SIGCO Warenhandel in Hamburg, Germany, showed improved financial results versus prior year, due to better margins on bakery seeds at stable turnover.
Van Rees Group in Rotterdam, the Netherlands, realized an improved net result in the first six months versus prior year. Volumes were up in most offices, except for Colombo, Sri Lanka. The Colombo office was impacted by persistent high prices for Sri Lankan teas in the first six months and reduced volumes to Turkey. Margins were similar to last year levels. Crops in Kenya were down significantly by about 50,000 MT versus last year, which caused higher selling prices in the entire East African region. General demand was good although some countries, such as Russia and Egypt showed lower demand due to economic circumstances.
Distribution and blending activities in Food Ingredients continued to perform excellent. The net result for the first six months improved further versus prior year. Both dry and wet blends volumes grew, resulting in higher margins at stable costs.
The Group's total balance sheet shortened when compared with 31 December 2016 mainly because of lower inventories (decrease of € 9.9 million) and lower trade creditors (decrease of € 9.3 million). The addition due to the consolidation of the assets of Delinuts was more than offset by reduced stock levels and the euro/US dollar exchange rate per 30 June 2017.
Shareholders' equity increased by € 2.0 million to € 184.9 million on 30 June 2017 (31 December 2016: € 182.9 million). In May 2017, the 2016 final dividend of € 18.2 million was paid (€ 0.75 per share).
Long-term bank borrowings increased by € 7.6 million and short-term borrowings were reduced by € 5.2 million versus year-end 2016.
2017 started in line with the first half of 2016. Given the nature of the Group's activities, it is impossible to forecast market developments or likely Group results. However, the Company is confident that its teams will continue to generate good results for shareholders.
The Company's executive director hereby declares that, to the best of his knowledge:
Rotterdam, 20 July 2017
Allard Goldschmeding Group Managing Director
| Page | 7 | Consolidated balance sheet as at 30 June 2017 |
|---|---|---|
| Page | 8 | Consolidated income statement H1 2017 |
| Page | 8 | Consolidated cash flow statement H1 2017 |
| Page | 9 | Statement of changes in shareholders' equity H1 2017 |
| Page | 9 | Consolidated statement of comprehensive income H1 2017 |
| Page | 10 | Segment information H1 2017 |
| Page | 10 | Sales per geography H1 2017 |
| Page | 11 | Notes to the H1 2017 consolidated interim financial statements |
| Page | 13 | Financial calendar 2018 |
This report in the English language has also been translated into the Dutch language. In case of any differences between the two versions, the English version will prevail.
For further information, please contact:
WTC, Beursplein 37, 10th floor Sophialaan 43 3011 AA Rotterdam 1075 BM Amsterdam The Netherlands The Netherlands [email protected] [email protected]
Tel. +31 10 4051195 Tel. +31 20 4525225
Mr A.W. Goldschmeding Mr F.J.M. Witte, spokesperson
Fax +31 10 4055094 Fax +31 20 4528650 www.acomo.nl www.creativevenue.nl
Amsterdam Commodities N.V. (Acomo) is an international group with as its principal business the trade and distribution of natural food products and ingredients. Our main trading subsidiaries are Catz International B.V. in Rotterdam, the Netherlands, (spices and food raw materials), Van Rees Group B.V. in Rotterdam, the Netherlands, (tea), Red River Commodities Inc. in Fargo, USA, (confectionary sunflower seeds), Red River Global Ingredients Ltd. In Winkler, Canada, Red River-van Eck B.V. in Zevenbergen, the Netherlands, and SIGCO Warenhandelsgesellschaft mbH in Hamburg, Germany, (edible seeds), King Nuts B.V. in Bodegraven, the Netherlands, and Delinuts B.V. in Ede, the Netherlands (nuts), and Snick EuroIngredients N.V. in Ruddervoorde, Belgium (food ingredients). Acomo shares have been traded on Euronext Amsterdam since 1908.
before interim dividend
| (in € thousands) | 30 June 2017 | 31 December 2016 | 30 June 2016 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 67 266 | 62 919 | 60 941 |
| Property, plant and equipment | 39 945 | 42 138 | 40 465 |
| Other non-current assets | 1 321 | 1 356 | 1 266 |
| Deferred tax assets | 291 | 173 | 425 |
| Total non-current assets | 108 823 | 106 586 | 103 097 |
| Current assets | |||
| Inventories | 148 523 | 158 396 | 146 676 |
| Trade receivables | 83 207 | 81 401 | 84 190 |
| Other receivables | 3 886 | 2 649 | 3 809 |
| Derivative financial instruments | 444 | 2 735 | 947 |
| Cash and cash equivalents | 1 561 | 1 805 | 1 624 |
| Total current assets | 237 621 | 246 986 | 237 246 |
| Total assets | 346 444 | 353 572 | 340 343 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent | |||
| Share capital | 11 072 | 10 901 | 10 800 |
| Share premium reserve | 61 428 | 52 447 | 50 649 |
| Other reserves Retained earnings |
9 080 85 881 |
15 499 69 684 |
10 779 79 284 |
| Net profit for the period | 17 394 | 34 377 | 17 229 |
| Total shareholders' equity | 184 855 | 182 908 | 168 741 |
| Non-current liabilities and provisions | |||
| Bank borrowings | 14 111 | 6 519 | 7 850 |
| Deferred tax liabilities | 8 422 | 8 894 | 10 681 |
| Retirement benefit obligations | 2 025 | 2 062 | 1 849 |
| Other provisions | 290 | 279 | 754 |
| Total non-current liabilities | 24 848 | 17 754 | 21 134 |
| Current liabilities | |||
| Bank borrowings | 80 061 | 85 233 | 99 379 |
| Trade creditors | 34 779 | 44 050 | 32 447 |
| Tax liabilities | 5 668 | 5 113 | 3 480 |
| Derivative financial instruments | 1 980 | 503 | 408 |
| Other current liabilities and accrued expenses | 14 253 | 18 011 | 14 754 |
| Total current liabilities | 136 741 | 152 910 | 150 468 |
| Total equity and liabilities | 346 444 | 353 572 | 340 343 |
| (in € thousands) | H1 2017 | H1 2016 |
|---|---|---|
| Sales | 354 160 | 341 826 |
| Cost of goods sold | (293 234) | (284 865) |
| Gross margin | 60 926 | 56 961 |
| Personnel costs | (20 939) | (19 185) |
| General costs | (11 571) | (9 619) |
| EBITDA | 28 416 | 28 157 |
| Depreciation and impairment charges | (2 592) | (2 331) |
| EBIT | 25 824 | 25 826 |
| Interest income | 42 | 28 |
| Interest expense | (1 486) | (1 628) |
| Other financial income and expenses | (214) | (9) |
| Profit before income tax | 24 166 | 24 217 |
| Corporate income tax | (6 772) | (6 988) |
| Net profit | 17 394 | 17 229 |
| Total basic EPS (in €) | 0.714 | 0.718 |
| Total diluted EPS (in €) | 0.706 | 0.714 |
| (in € thousands) | H1 2017 | H1 2016 |
|---|---|---|
| Cash flow from operating activities | 27 881 | 27 887 |
| Net changes in working capital | 7 557 | (3 254) |
| Paid interest and taxes | (8 256) | (5 960) |
| Total cash flow from operating activities | 27 182 | 18 492 |
| Cash flow from investing activities | (10 875) | (2 839) |
| Cash flow from financing activities | ||
| Dividend paid | (18 180) | (14 401) |
| Proceeds from new shares | 131 | 82 |
| Net changes in long term bank borrowings | 5 634 | (1 078) |
| Net changes in bank financing of working capital | (4 133) | (181) |
| Cash flow from financing activities | (16 548) | (15 397) |
| Net increase/(decrease) in cash and cash equivalents | (241) | 256 |
| Cash and cash equivalents at the beginning of the year | 1 807 | 1 384 |
| Exchange gains/(losses) on cash and cash equivalents | (5) | (16) |
| Cash and cash equivalents at the end of half year | 1 561 | 1 624 |
| Share | Net profit | |||||
|---|---|---|---|---|---|---|
| Share | premium | Other | Retained | for the | Total | |
| (in € thousands) | capital | reserve | reserves | earnings | period | equity |
| Balance at 1 January 2016 | 10 796 | 50 571 | 13 268 | 61 434 | 32 251 | 168 320 |
| Net profit for the period | - | - | - | - | 17 229 | 17 229 |
| Other comprehensive income | - | - | (2 523) | - | - | (2 523) |
| Appropriation of net profit | - | - | - | 32 251 | (32 251) | - |
| Issue of ordinary shares | 4 | 78 | - | - | - | 82 |
| Employee share option plan | - | - | 34 | - - | - | 34 |
| Dividend relating to 2015, final | - | - | - | (14 401) | - | (14 401) |
| Balance at 30 June 2016 | 10 800 | 50 649 | 10 779 | 79 284 | 17 229 | 168 741 |
| Balance at 1 January 2017 | 10 901 | 52 447 | 15 499 | 69 684 | 34 377 | 182 908 |
| Net profit for the period | - | - | - | - | 17 394 | 17 394 |
| Other comprehensive income | - | - | (6 448) | - | - | (6 448) |
| Appropriation of net profit | - | - | - | 34 377 | (34 377) | - |
| Issue of ordinary shares | 171 | 8 981 | - | - | - | 9 152 |
| Employee share option plan | - | - | 29 | - - | - | 29 |
| Dividend relating to 2016, final | - | - | - | (18 180) | - | (18 180) |
| Balance at 30 June 2017 | 11 072 | 61 428 | 9 080 | 85 881 | 17 394 | 184 855 |
| (in € thousands) | H1 2017 | H1 2016 |
|---|---|---|
| Net profit | 17 394 | 17 229 |
| Other comprehensive income | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | ||
| Movement currency translation reserves on equity, net | (4 207) | (1 421) |
| Movement currency translation differences on goodwill | (2 021) | (758) |
| Movement on cash flow hedge | (220) | (344) |
| Total other comprehensive income | (6 448) | (2 523) |
| Total comprehensive income | 10 946 | 14 706 |
| Total comprehensive income attributable to shareholders of the parent | 10 946 | 14 706 |
| Spices and | Food | |||||
|---|---|---|---|---|---|---|
| (in € thousands) | Nuts | Edible Seeds | Tea | Ingredients | Other | Total |
| H1 2017 | ||||||
| Sales | 177 402 | 97 741 | 73 653 | 10 454 | (5 090) | 354 160 |
| Costs | (162 926) | (87 804) | (70 489) | (8 533) | 4 008 | (325 744) |
| EBITDA | 14 476 | 9 937 | 3 164 | 1 921 | (1 082) | 28 416 |
| Depreciation | (252) | (1 912) | (254) | (171) | (3) | (2 592) |
| Financial results | (902) | (829) | (320) | (52) | 445 | (1 658) |
| Income tax expense | (3 330) | (2 250) | (696) | (590) | 94 | (6 772) |
| Net result | 9 992 | 4 946 | 1 894 | 1 108 | (546) | 17 394 |
| Total assets | 123 528 | 97 267 | 55 146 | 11 689 | 58 814 | 346 444 |
| Total liabilities | 92 896 | 65 741 | 41 570 | 8 541 | (47 159) | 161 589 |
| H1 2016 | ||||||
| Sales | 167 109 | 96 640 | 69 620 | 10 893 | (2 436) | 341 826 |
| Costs | (153 416) | (86 274) | (66 768) | (9 061) | 1 851 | (313 668) |
| EBITDA | 13 693 | 10 366 | 2 852 | 1 832 | (585) | 28 158 |
| Depreciation | (115) | (1 778) | (243) | (174) | (21) | (2 331) |
| Financial results | (485) | (1 055) | (310) | (53) | 293 | (1 610) |
| Income tax expense | (3 296) | (2 407) | (794) | (557) | 66 | (6 988) |
| Non-recurring items, net of tax | - | - | - | - | - | - |
| Net result | 9 797 | 5 126 | 1 505 | 1 048 | (247) | 17 229 |
| Total assets | 106 621 | 114 464 | 58 817 | 12 644 | 47 797 | 340 343 |
| Total liabilities | 85 985 | 73 800 | 40 155 | 1 332 | (29 670) | 171 602 |
The column 'Other' mainly represents holding costs and intra-Group items.
| (in € thousands) | NL | EU other | US | Other | Total |
|---|---|---|---|---|---|
| H1 2017 | 63 356 | 161 383 | 91 562 | 37 859 | 354 160 |
| H1 2016 | 57 359 | 154 803 | 86 308 | 43 356 | 341 826 |
| Other | H1 2017 | H1 2016 |
|---|---|---|
| Number of FTEs per 30 June | 606 | 591 |
| Effective tax rate (%) | 28.0% | 28.9% |
The interim financial statements for the six months ending 30 June 2017 comprise the results of the Company and its subsidiaries and have been prepared in accordance with International Financial Reporting Standards (IFRS), IAS 34 'Interim Financial Reporting'. They do not contain all the information required for annual financial statements and should be read in conjunction with the financial statements as of 31 December 2016.
The accounting policies and rules and measurement of income used for the preparation of the interim financial statements are consistent with the financial statements 2016 (published on the website of the Company) and are in accordance with IFRS as adopted by the European Union.
The H1 2017 interim financial statements are unaudited.
On 5 May 2017, the Company acquired 100% of the shares of Delinuts B.V. based in Ede, the Netherlands, active in the trade and distribution of nuts, dried fruit, and rice crackers. The existing management continues to lead the company after the acquisition. The results of Delinuts B.V. are consolidated as from 1 May 2017. The acquisition is partly financed by existing credit facilities and partly through the issue of Amsterdam Commodities N.V. shares.
At acquisition date the fair values of assets, liabilities and cash flow relating to the acquisition were as follows:
| Intangible assets | 457 |
|---|---|
| Property, plant and equipment | 464 |
| Net deferred tax assets | 24 |
| Inventories | 10 985 |
| Receivables and other current assets | 6 910 |
| Cash and current borrowings | (4 083) |
| Pension liability | (137) |
| Payables and other current liabilities | (3 802) |
| Net asset acquired | 10 818 |
| Purchase consideration settled in cash | 8 000 |
| Purchase consideration settled in Acomo shares | 8 986 |
| Total purchase consideration | 16 986 |
| Goodwill - total purchase consideration exceeding net assets acquired | 6 168 |
| Purchase consideration settled in cash | 8 000 |
| Cash owned by the business combination 1 May 2017 | (20) |
| Cash out flow on business combinations, net | 7 980 |
The goodwill connected with the acquired business mainly consists of knowhow, staff and anticipated potential synergies. Goodwill is not tax deductible.
In accordance with IFRS 3, the amounts recorded for the transaction are provisional and are subject to adjustments during the measurement period if new information is obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurements of the amounts recognized as of that date. The increase of the H1 2017 sales due to the consolidation of the acquired business amounted to € 10.8 million. Total sales H1 2017 reached an amount of € 32.8 million (pro forma). The contribution to the H1 2017 income amounted to € 0.1 million.
The Group incurred acquisition related costs such as external legal fees and due diligence costs for an amount of € 0.4 million (2016: € 0.1 million). These costs have been included in general costs.
All Acomo operating companies are required to hedge foreign exchange exposure related to transactions against their functional currency. The Group applies IFRS hedge accounting in order to exclude unrealized foreign currency results from the income statement. Based on a cost/benefit analysis Acomo has decided to discontinue applying IFRS hedge accounting for a number of entities as from 2016. IFRS hedge accounting continues to be applied in the Tea segment.
Not applying hedge accounting for part of the operations has no operational effect on the business, and only constitutes a timing difference. Unrealized foreign currency results are recognized in the income statement rather than in other comprehensive income, whereas under IFRS hedge accounting these results are recognized to the income statement upon realisation.
The negative impact of partially not applying hedge accounting on the H1 2017 net profit is € 0.2 million.
The movements in shareholders' equity are shown in the consolidated statement of changes in shareholders' equity on page 9. During H1 2017, Acomo issued 379,734 new shares in relation to the existing share option plan and the acquisition of Delinuts B.V.
On 30 June 2017, the number of shares outstanding was 24,605,060 (31 December 2016: 24,225,326).
Based on the existing share options granted, 19,000 share options are vested but not yet exercised. A total of 12,000 share options will vest on 1 December 2017. In the years 2018 until 2021, a total of 105,500 share options will vest.
On 25 April 2017 the AGM adopted the proposal to implement a one-tier Board structure. Besides this change, the corporate governance policies of the Company, the risks related to the activities, and the risk control and management systems of the Group as described in the Annual Report 2016, dated 9 March 2017 (published on the website of the Company), are unchanged. The main risks and uncertainties remain applicable in the current financial year.
The half year reported results of Acomo are not impacted by a seasonal pattern. The sales and margins are determined by market prices and conditions rather than seasonal fluctuations.
| 15 February 2018 |
Publication of the 2017 financials (unaudited) – after close |
|---|---|
| 8 March 2018 |
Publication of the Annual Report FY 2017 – after close |
| 26 April 2018 | Annual general meeting of shareholders |
| 30 April 2018 |
Ex-dividend date, final dividend FY 2017 |
| 10 May 2018 |
Dividend payment date, final dividend FY 2017 |
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