Earnings Release • Aug 1, 2014
Earnings Release
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Rotterdam, 31 July 2014
Amsterdam Commodities N.V. ('Acomo' or the 'Company'), the trading group listed at Euronext Amsterdam active in spices and nuts, food ingredients, tea and edible seeds, recorded consolidated sales of € 306.4 million in the first half of 2014 ('HY 2014') compared to € 302.9 million in the first half of 2013 ('HY 2013'), an increase by 1.1%. Net profit amounted to € 17.3 million (HY 2013: € 14.3 million, + 20.9%). The earnings per share increased by 19.0% from € 0.617 per share in HY 2013 to € 0.734 in HY 2014.
CEO Erik Rietkerk, "In the past six months, our companies have once again proven their excellent reputation and reliability, certainly in segments with rapidly changing price levels, which resulted in a very successful half year. Focus on margins in the supply chains paid off and the net profit of € 17.3 million was a new record half year result for the Group. Our interim dividend of € 0.40 per share reflects our strong cash flow generation combined with our sound financing position. We continue to invest in parts of supply chains that will further strengthen our relationships with our suppliers and customers and that can result in providing our shareholders with sound returns. The SIGCO acquisition is an example of that approach".
Various developments were noted during the first six months of 2014 which affected Acomo's local activities. Unrest in the Middle East and in Kenya resulted in challenging situations within respective supply chains. In Europe, the process of economic stabilization continued with signs of growth albeit at low levels. Consumer confidence and consumption in the West also showed some positive trends. Price level developments per product group showed a diverse pattern but on average increased as compared to 2013 showing trends ranging from steep declines - in for example various tea markets - to stabilization and for some products increases which sometimes were substantial.
The trend of increasing demand from emerging countries continued with climatic and political developments affecting harvests and traded volumes. It should be noted that in many cases, our food commodities represent only a relatively small part of consumer end products. This has a stabilizing effect on our sales and volumes.
| in € millions | HY 2014 | HY 2013 Change % | |
|---|---|---|---|
| Sales | 306,4 | 302,9 | 1,1% |
| Operating income (EBIT) | 25,7 | 21,8 | 17,8% |
| Financial income and expenses | -1,4 | -1,3 | 7,7% |
| Corporate income tax | -7,0 | -6,2 | 12,9% |
| Net profit | 17,3 | 14,3 | 20,9% |
| Total shareholders' equity | 135,5 | 123,0 | 10,2% |
| Total Assets | 295,8 | 266,5 | 11,0% |
| Solvency (%) | 45,8% | 46,2% | -0,4% |
| 0,734 | |||
| Earnings per share (in €) | 0,617 | 19,0% | |
| Interim dividend per share (in €) | 0,40 | 0,17 | 135,3% |
| Dividend pay out ratio (%) | 54,5% | 27,6% | 26,9% |
| Number of outstanding shares per 30 June ('000) | 23,6 97 |
23,258 | 1,9% |
| Shareholders' equity per share per 30 June (in €) | 5, 72 |
5,29 | 8,1% |
| Return on equity, annualized (%) | 26,1% | 23,3% | 2,8% |
| Return on net capital employed (%) | 26,6% | 25,5% | 1,1% |
| Operational cash flow | 25,1 | 24,3 | 3,3% |
| Number of employees per 30 June | 542 | 560 | -3,2% |
| Effective tax rate (%) | 28,7% | 30,3% | -1,6% |
During HY 2014, sales increased slightly compared to HY 2013 to € 306.4 million (+ 1.1%) with price levels increasing on average and stable to sometimes lower volumes in various segments. The gross profit margin increased to 16.7% (HY 2013: 15.6%) due to continuous focus on value added. Operating expenses (excluding non-recurring items) increased by 3.1% due to growth in various companies and due to the new warehouse facility of Snick in Ruddervoorde, Belgium and the new Van Rees Group office in Dubai both becoming fully operational.
Financial income and expenses include non-amortized cost of almost € 0.2 million relating to the early repayment in February 2014 of all then existing acquisition loans. Running interest cost decreased due to lower average interest charged under the new bank facilities despite on average higher working capital investment levels. The effective corporate income tax rate decreased to 28.7% due to profits being realized in countries with a relatively lower effective income tax rate.
Net profit in HY 2014 compared to HY 2013 increased by € 3.0 million to € 17.3 million or by 20.9%. Excluding non-recurring items amounting to € 0.6 million, net profit increased by 16.5%.
Once again, the spices, nuts and dried fruits activities have contributed considerably to the consolidated results of the Group. Markets showed active trading levels with on average increasing price levels with some increases being substantial. The demand for products was strong, supply was sometimes affected by local unrest in sourcing countries and consequently significant price volatility was noticed in various products. The sales of superfood products fuelled growth. Customers covered price risks and noncompliance risks with forward contracts through the respective companies. Operational cost levels remained stable and no significant unexpected gains or losses occurred.
The activities relating to the production and distribution of confectionary seeds, especially sunflower seeds, developed positively. The broad business proposition of Red River Commodities showed its strength, focusing on delivering seeds with an above average quality combined with competitive pricing. Exports from North-America showed a positive trend after some years of decline. Demand and sales of bird seed products were below the extreme high levels of 2013 albeit at good levels due to again a long winter period. The Sunbutter® activities also grew steadily as a result of further market penetration and increasing demand for peanut free products. The roasting, salting and packaging activities in Sungold realized improved results as compared to 2013 after operational efficiencies having been finalized. The company will aim to further increase the use of the existing capacity, a capacity which is well recognized as a standard setter for high quality roasted inshell sunflower snacks. The year 2014 started with a combination of rain in the North, draughts in the Southern regions of the mid-west and delays in planting in the North, however, generally good weather has covered the regions since planting. The consequences for the sunflower harvests and ultimately consumption are still unclear. Red River van Eck realized very good results in its trading activities.
Our tea trading and blending activities were confronted with sharply decreasing price levels. Political unrest in major consumer countries led to challenges for global tea supply chains. Good weather conditions led to record volumes of tea harvested in various countries. As a consequence, tea prices decreased. The Van Rees Group continued its development of partnerships with suppliers and customers providing added value services as part of the value chain through the providing combinations of tea blending, transporting and storage. In addition, increasing volumes of Rainforest Alliance certified tea is supplied upon customers' requests. The newly opened Dubai office became fully operational.
Distribution and blending activities in food ingredients continued to grow. Very strong relationships with principals and customers are once again proving their significance. After testing and installing blending facilities during the first months of the year, the new Ruddervoorde production and warehouse facility started its operations. The new facility has been HACCP, ISO22000, FSSC22000, GMP and BIO-ORGANIC approved and provides very good opportunities for further growth through in-house addedvalue food ingredient blends. The integration of Snick and Tefco into one combined market proposition is progressing well.
Besides ongoing business developments within our subsidiaries, the following developments are mentioned specifically in the context of this half year report:
Given the nature of our businesses, the good results of the first half year are no guarantee for a similar trend in the second half year. The recent developments in the Middle East combined with recurring tension in the Euro-zone and around Europe still reflect imbalances which require attention and indirectly affect worldwide trading. Climate changes with extreme weather conditions seems to be happening more and more which also can have significant effects on agricultural activities worldwide. Food safety and food regulation is a constantly reoccurring topic.
Acomo seeks further growth and stabilization of the results by further diversifying the Group's activities, even amidst inherently unpredictable and uncontrollable market conditions. We have confidence in the experience and market knowledge of all our trading teams and are confident that 2014 will be another successful year for our shareholders and other stakeholders.
The Acomo Corporate Governance Statement as published on www.acomo.nl states that Acomo has a focus on maintaining the Group's traditionally strong dividend policy. This policy means that a substantial percentage of the annual net profit is paid out to the shareholders in cash every year. In recent years, the pay-out ratio has been around or above 60%.
In February 2014, new banking facilities were arranged and all then outstanding acquisition loans were fully repaid. Whereas in the past, half year interim dividend pay-out ratios were significantly below the annual dividend pay-out ratio, future half year interim dividends will be aligned with realized net results in the respective half years. In determining half year interim dividends, investments in projects and in working capital as well as available financing head room will also be taken into account. Consequently, annual final dividends will also be more aligned with the net result and operational cash flow of the Group in the second part of the financial year.
This half year interim dividend policy is in line with the existing full year dividend policy as described in Acomo's Corporate Governance Statement.
The Management Board and Supervisory Board have decided to pay an interim-dividend of € 0.40 per share in cash (2013: € 0.17, + 135.3%) payable on 13 August 2014. The ex-dividend date is 4 August 2014.
The HY 2014 results include several items with a non-recurring character which affect the comparison to the HY 2013 financials. The main non-recurring items in both half years were:
The total net impact on the HY 2014 net profit as compared to the HY 2013 net result was just above € 0.6 million positive.
Van Rees Group and Red River Commodities report their results to Acomo in US dollars. Acomo converts these results into euros being the reporting currency of the Group. During HY 2014, the average rate of the US dollar against the euro (1.371) weakened compared to HY 2013 (1.313) leading to a negative impact in euros of € 0.3 million as compared to using the HY 2013 average exchange rates. The US dollar closing rate on 30 June 2014 was 1.369 being slightly stronger than the 1.379 rate on 31 December 2013 (effect on the balance sheet: € 1.0 million more assets or + 0.3%).
The net decrease in tangible fixed assets compared to 31 December 2013 was mainly due to depreciations exceeding investments in the Group.
The main changes in working capital related to higher inventories caused by regular seasonality effects and on average higher price levels, increased trade receivables due to June sales being higher than December sales and lower trade creditors due to paying 2013 harvests to farmers in the beginning of 2014. This also resulted in higher working capital debt. In addition, in May 2014 the final 2013 dividend of € 14.2 million was paid (€ 0.60 per share).
Long-term loans changed by fully repaying all then outstanding acquisition loans in February 2014 and by regular repayments on other long term bank loans.
The HY 2014 cash flows can be summarized as follows:
As a result, working capital financing increased during HY 2014 by € 37.8 million to € 97.2 million as per 30 June 2014. Following the new bank financing agreement, the total available funding of working capital as at 30 June 2014 was rounded € 220 million compared to € 150 million at the end of 2013.
The Company's executive directors hereby declare that, to the best of their knowledge:
Rotterdam, 31 July 2014
| Erik Rietkerk | Jan ten Kate |
|---|---|
| CEO | CFO |
| Page | 7 | Consolidated balance sheet as at 30 June 2014 |
|---|---|---|
| Page | 8 | Consolidated income statement HY 2014 |
| Page | 8 | Consolidated cash flow statement HY 2014 |
| Page | 9 | Statement of changes in shareholders' equity HY 2014 |
| Page | 9 | Statement of comprehensive income HY 2014 |
| Page | 10 | Segment information HY 2014 |
| Page | 11 | Notes to the HY 2014 consolidated interim financial statements |
| Page | 13 | Financial calendar 2014/2015 |
This half year 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:
Amsterdam Commodities N.V. (Acomo) Mr. E. Rietkerk, CEO WTC, Beursplein 37, 10e etage 3011AA, Rotterdam info@acomo.nl
Tel. +31 10 4051195 Fax +31 10 4055094
www.acomo.nl
Creative Venue public relations Mr. F. Witte, company spokesman Sophialaan 43 1075 BM Amsterdam f.witte@creativevenue.nl
Tel. +31 20 4525225 Fax +31 20 4528650
www.creativevenue.nl
before interim dividend
| (in € thousands) | 30 June 2014 | 31 December 2013 | 30 June 2013 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 46 673 | 46 477 | 48 098 |
| Property, plant and equipment | 35 589 | 36 105 | 35 711 |
| Other investments in companies | 192 | 257 | 257 |
| Deferred tax ass ets | 106 | - | 842 |
| Total non-current assets | 82 560 | 82 839 | 84 908 |
| Current assets | |||
| Inventories | 134 557 | 129 117 | 108 505 |
| Tra de receivables | 74 085 | 60 686 | 67 718 |
| Other receivables | 2 929 | 2 786 | 3 914 |
| Derivative financial instruments | 206 | 386 | 239 |
| Cash and cas h equivalents | 1 427 | 1 381 | 1 186 |
| Total current assets | 213 204 | 194 356 | 181 562 |
| Total assets | 295 764 | 277 195 | 266 470 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent | |||
| Share ca pital | 10 664 | 10 589 | 10 466 |
| Share premium res erve | 48 469 | 47 307 | 45 446 |
| Other reserves | (4 995) | (5 311) | (2 054) |
| Retained earnings | 81 377 | 78 249 | 69 160 |
| Total shareholders' equity | 135 515 | 130 834 | 123 018 |
| Non-current liabilities and provisions | |||
| Borrowings | 5 671 | 8 784 | 10 025 |
| Deferred income tax liabilities | 7 627 | 7 255 | 8 768 |
| Retirement benefit obligations | 1 218 | 2 106 | 2 852 |
| Provisions for other liabilities and charges | 3 323 | 3 400 | 2 342 |
| Total non-current liabilities | 17 839 | 21 545 | 23 987 |
| Current liabilities | |||
| Borrowings | 97 204 | 69 124 | 65 345 |
| Tra de and other pa yables | 23 416 | 32 808 | 21 910 |
| Tax liabilities | 3 932 | 6 105 | 5 622 |
| Derivative financial instruments | 491 | 1 248 | 348 |
| Other liabilities and accrued expenses | 17 367 | 15 531 | 26 240 |
| Total current liabilities | 142 410 | 124 816 | 119 465 |
| Total equity and liabilities | 295 764 | 277 195 | 266 470 |
| Shareholders' equity per share | 5.72 | 5.56 | 5.29 |
| Shareholders' equity per share, diluted | 5.64 | 5.47 | 5.18 |
The interim financial statements have not been subject to an audit.
| (in € thousands) | HY 2014 | HY 2013 |
|---|---|---|
| Sales | 306 352 | 302 891 |
| Cost of goods sold | (255 217) | (255 537) |
| Gross profit | 51 135 | 47 354 |
| Personnel costs | (15 156) | (16 435) |
| General costs | (8 316) | (7 795) |
| Depreciation and impairment charges | (1 988) | (1 286) |
| Total cost | (25 460) | (25 516) |
| Operating income | 25 675 | 21 838 |
| Interest income | 28 | 5 |
| Interest expense | (1 162) | (1 086) |
| Other financial income and expenses | (231) | (192) |
| Profit before income tax | 24 310 | 20 565 |
| Corporate income tax | (6 970) | (6 223) |
| Net profit | 17 340 | 14 342 |
| Total basic EPS (in €) | 0.734 | 0.617 |
| Total diluted EPS (in €) | 0.725 | 0.605 |
| (in € thousands) | HY 2014 | HY 2013 |
|---|---|---|
| Cash flow from operating activities | 26 551 | 24 304 |
| Net changes in working capital | (31 054) | (11 937) |
| Net changes in bank financing of working capital | 37 484 | 11 501 |
| Paid interest and taxes | (7 829) | (3 676) |
| Total cash flow from operating activities | 25 152 | 20 192 |
| Cash flow from investing activities | (1 223) | (3 645) |
| Cash flow from financing activities | ||
| Dividend paid | (14 211) | (12 786) |
| Proceeds from new shares | 1 237 | 74 |
| Net changes in long term bank borrowings | (10 923) | (3 654) |
| Cash flow from financing activities | (23 897) | (16 366) |
| Net increase/(decrea se) in cash and ca sh equivalents | 32 | 181 |
| Cash and cas h equivalents at the beginning of the year | 1 381 | 999 |
| Exchange gains/(loss es) on cash and cash equivalents | 14 | 7 |
| Cash and cash equivalents at the end of half year | 1 427 | 1 187 |
The interim financial statements have not been subject to an audit.
| Share | |||||
|---|---|---|---|---|---|
| Share | premium | Other | Retained | ||
| (in € thousands) | capital | reserve | reserves | earnings | Total equity |
| Balance at 1 January 2013 - restated | 10 461 | 45 377 | (2 330) | 67 604 | 121 112 |
| Net profit | - | - | - | 14 342 | 14 342 |
| Other comprehensive income | - | - | 227 | - | 227 |
| Issue of ordinary sha res | 5 | 69 | - | - | 74 |
| Employee share option plan | - | - | 49 | - | 49 |
| Dividends relating to 2012, final | - | - | - | (12 786) | (12 786) |
| Balance at 30 June 2013 | 10 466 | 45 446 | (2 054) | 69 160 | 123 018 |
| Balance at 1 January 2014 | 10 589 | 47 307 | (5 311) | 78 248 | 130 834 |
| Net profit | - | - | - | 17 340 | 17 340 |
| Other comprehensive income | - | - | 249 | - | 249 |
| Issue of ordinary sha res | 75 | 1 162 | - | - | 1 237 |
| Employee share option plan | - | - | 67 | - | 67 |
| Dividend relating to 2013, final | - | - | - | (14 211) | (14 211) |
| Balance at 30 June 2014 | 10 664 | 48 469 | (4 995) | 81 377 | 135 515 |
| (in € thousands) | HY 2014 | HY 2013 |
|---|---|---|
| Net profit | 17 340 | 14 342 |
| Other comprehensive income | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods |
||
| Movement currency translation reserves on equity, net | 276 | 187 |
| Movement currency translation differences on goodwill | 196 | 398 |
| Movement on cash flow hedge | (223) | (358) |
| Other comprehensive income to be reclassified to profit or loss in subsequent periods |
249 | 227 |
| Other comprehensive income not te be reclassified to profit or loss in subsequent periods |
||
| Re-measurement gains/(losses) on defined benefit plans | - | - |
| Other comprehensive income not te be reclassified to profit or loss in subsequent periods Total other comprehensive income |
- 249 |
- 227 |
| Total comprehensive income | 17 589 | 14 569 |
| Total comprehensive income attributable to shareholders of the parent | 17 589 | 14 569 |
The interim financial statements have not been subject to an audit.
| Spices and | Food | |||||
|---|---|---|---|---|---|---|
| (in € thousands) | Nuts | Ingredients | Tea | Edible Seeds | Other | Total |
| HY 2014 | ||||||
| Sales | 145 722 | 11 437 | 70 744 | 80 234 | (1 785) | 306 352 |
| Cos ts | (132 957) | (10 424) | (67 910) | (70 251) | 112 | (281 430) |
| Operating income, recurring | 12 765 | 1 013 | 2 834 | 9 983 | (1 673) | 24 922 |
| Non-recurri ng items | 753 | 753 | ||||
| Operating income | 12 765 | 1 013 | 2 834 | 9 983 | (920) | 25 675 |
| Total assets | 100 647 | 11 387 | 62 470 | 77 045 | 44 215 | 295 764 |
| HY 2013 | ||||||
| Sales | 124 959 | 10 281 | 78 396 | 90 516 | (1 261) | 302 891 |
| Cos ts | (114 158) | (9 182) | (75 320) | (81 383) | (885) | (280 928) |
| Operating income, recurring | 10 801 | 1 099 | 3 076 | 9 133 | (2 146) | 21 963 |
| Non-recurri ng items | (125) | (125) | ||||
| Operating income | 10 801 | 1 099 | 3 076 | 9 133 | (2 271) | 21 838 |
| Total assets | 71 168 | 9 396 | 58 793 | 80 534 | 46 561 | 266 470 |
The col umn 'Other' ma inly repres ents holding costs , intra Group items a nd non-recurring items
| (in € thousands) | NL | EU other | US | Other | Total |
|---|---|---|---|---|---|
| HY 2014 | 44 642 | 126 088 | 89 827 | 45 795 | 306 352 |
| HY 2013 | 35 661 | 119 856 | 108 031 | 39 343 | 302 891 |
The interim financial statements have not been subject to an audit.
.
The interim financial statements for the six months ended 30 June 2014 comprise the Company and its subsidiaries and have been prepared in accordance with International Financial Reporting Standards, 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 2013.
The accounting policies and rules and measurement of income used for the preparation of the interim financial statements are consistent with the financial statements 2013 (published on the website of the Company) and are in accordance with IFRS as adopted by the European Union.
The HY 2014 interim financial statements are unaudited.
As from 1 January 2014, the Group applied the following new IFRS standards as relevant to the Group:
The impact on the HY 2014 Consolidated interim financial statements is not considered material.
The movements in shareholders' equity are shown in the consolidated statement of changes in shareholders' equity on page 9. During HY 2014, Acomo issued 165,400 new shares under the existing Share Option Plan.
On 30 June 2014, the number of shares outstanding were 23,697,076 (31 December 2013: 23,531,676).
Based on the existing share options granted, 119,500 share options will vest on 1 September 2014. In the years 2015 until 2019, a total of 529,000 share options will vest.
The new bank financing facilities that were signed on 7 February 2014 consist of € 120 million committed working capital lines, € 80 million uncommitted working capital lines for short term use during peak seasons and € 50 million stand-by acquisition lines. The conditions reflect Acomo's sound credit fundamentals, provide banks with security pledges on inventories and trade receivables and include borrowing base elements. The working capital facilities have a three-year term with options for an additional two years and for an increase of 30% of the total amounts.
As from 1 January 2014, a new defined contribution pension scheme was introduced in a subsidiary replacing an existing defined benefit scheme. Consequently, the relating pension provision was released to the income statement creating a net result of € 0.6 million.
On 10 July 2014, a press release was issued relating to the acquisition of SIGCO Warenhandel GmbH in Hamburg, Germany ('SIGCO'). For further information please refer to that press release which can be found on Acomo's website www.acomo.nl. In line with Acomo's respective accounting policies, SIGCO's financials will be included in Acomo's consolidation as from the date of obtaining control.
The corporate governance policies of the Company, the risks related to the activities and the risk control and management systems of the Group are described in the annual financial statements 2013 dated 18 March 2014 (published on the website of the Company) and are unchanged The main risks and uncertainties remain applicable in the current financial year.
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| Trading update Q3 2014 |
|---|
| Publication of the 2014 annual figures (unaudited) |
| Publication of the Annual Report 2014 (on website) |
| Trading update Q1 2015 |
| Annual General Meeting |
| Publication of the HY 2015 results (unaudited) |
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