Earnings Release • Jul 21, 2016
Earnings Release
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Rotterdam, 21 July 2016
Half year interim dividend set at € 0.40 per share, equal to H1 2015
Over the first six months of 2016, the consolidated sales recorded by Amsterdam Commodities N.V. (Acomo) increased by 3.1% to € 341.8 million (H1 2015: € 331.7 million). The total gross margin increased by 1.3%, keeping the gross margin as a percentage of sales close to last year's figure. The absolute increase was mainly due to a strong performance by the Spices and Nuts segment, as well as by the segment Food Ingredients. The increased tax expenses versus prior year are impacted by the higher profit before tax, and a non-taxable one-off gain in 2015. H1 2016 net profit of € 17.2 million is in line with the first half of 2015.
The US dollar remained stable versus the euro in the first six months of 2016 compared with the same period in 2015. The average euro/US dollar exchange rate in the first half year of 2016 was 1.1166 (H1 2015: 1.1168). The FX rate had no meaningful impact on sales and net profit.
The euro/US dollar balance sheet exchange rate on 30 June 2016 was 1.1107, similar to the balance sheet exchange rate on 30 June 2015 (1.1147). The FX rate had no substantial impact on assets and liabilities.
The interim dividend per share is set at € 0.40 in cash, in line with H1 2015. The dividend is payable on 4 August 2016 (ex-dividend date is 25 July 2016).
| H1 2016 | H1 2015 Change % | ||
|---|---|---|---|
| Consolidated figures (in € millions) | |||
| Sales | 341.8 | 331.7 | 3.1% |
| Gross profit | 57.0 | 56.2 | 1.3% |
| EBITDA | 28.2 | 27.7 | 1.6% |
| EBIT | 25.8 | 25.3 | 2.0% |
| Financial result | -1.6 | -1.7 | -6.3% |
| Corporate income tax | -7.0 | -6.4 | 9.5% |
| Net profit | 17.2 | 17.2 | 0.1% |
| Impact of specific one-off items on net profit | - | 0.3 | -100.0% |
| Shareholders' equity (before interim dividend) | 168.7 | 160.4 | 5.2% |
| Total assets | 340.3 | 343.2 | -0.8% |
| Ratios | |||
| Solvency | 49.6% | 46.7% | 2.8% |
| Return on Equity (ROE), annualised | 19.6% | 23.3% | -3.7% |
| Return On Net Capital Employed (RONCE), annualised | 17.3% | 19.5% | -2.2% |
| RONCE operating companies (excluding goodwill), annualised | 22.1% | 24.9% | -2.8% |
| Dividend pay-out ratio | 55.7% | 55.3% | 0.4% |
| Key performance indicators (in €) | |||
| Earnings per share | 0.718 | 0.723 | -0.7% |
| Interim dividend per share | 0.40 | 0.40 | 0.0% |
| Equity per share per 30 June | 7.03 | 6.74 | 4.4% |
| Share price per 30 June | 21.99 | 22.70 | -3.1% |
| Market capitalization per 30 June (in millions) | 527.8 | 540.3 | -2.3% |
| Number of shares outstanding (in thousands) | |||
| Per 30 June | 24,001 | 23,809 | 0.8% |
'The first half of 2016 saw another strong performance, again proving the strength of our operating companies in sometimes difficult market conditions. Catz International achieved the best results in its 160th-year history by taking advantage of market opportunities. The Group achieved a net profit of € 17.2 million, a remarkable result and I would like to compliment all our staff for this', said CEO Erik Rietkerk. 'Our product segments Spices and Nuts and Food Ingredients performed very well, while Tea had a difficult six months in volatile market conditions. Edible Seeds performed slightly better versus last year, with a stable result in the US and improvements in Europe.'
Catz International in Rotterdam, the Netherlands, achieved a strong result over the first six months and clearly outperformed last year's result. Sales were up significantly due to higher volumes. Catz International remained the largest contributor to the Group's net profit. Pricing for several of its traded commodities was volatile during the six months, and Catz International was well positioned to benefit with its' partners from these movements. Pepper, desiccated coconut and nuts showed significant price movements and the teams at Catz International again showed their knowledge and experience to optimize their supply chains.
Tovano in Maasdijk, the Netherlands, active in packed nuts and dried fruits, achieved a solid profit level.
King Nuts & Raaphorst in Bodegraven, the Netherlands, active in nuts and rice crackers, was able to increase its volumes by more than 10% albeit at somewhat lower margins, resulting in a net profit marginally lower than H1 2015. The price slide for several nuts started in Q4 2015 and started to recover in Q2 2016, making the first six months a challenging environment in which the company performed remarkably well. King Nuts & Raaphorst expanded its strong position on the domestic market and increased exports compared with the same period 2015.
Red River Commodities in Fargo, USA, active in sourcing, processing and distributing edible seeds (mainly sunflower), experienced a warm winter which impacted bird food sales in the market. Despite lower volumes, Red River Commodities maintained its bird seed gross margin. The strong US dollar had an impact on export sales but here Red River Commodities maintained its gross margin as well. Lower sales to the snack market were compensated by an excellent six months for SunButter with sales and margin growth well above 15%. The combination of this resulted in lower sales while Red River Commodities achieved a gross margin marginally below last year. Effective cost control resulted in a net profit similar to H1 2015.
Red River-van Eck in Zevenbergen, the Netherlands, recorded good results in the poppy seeds market and other baking seeds given the difficult market conditions. The company's sunflower seed activities in Southeast Europe concentrated on selling the 2014 and 2015 crop with an improved result versus prior year.
SIGCO Warenhandel in Hamburg, Germany, made a positive contribution to the Group net profit, albeit somewhat lower than H1 2015. Good results in bakery seeds were impacted by negative contributions from hazelnuts.
The Edible Seeds teams continue to show their experience in dealing with volatile markets.
Van Rees Group in Rotterdam, the Netherlands, had a satisfactory performance given the difficult and sometimes surprising market, with El Niño affecting crops. In Kenya record crop numbers were reported for four months in a row, whereas in South India drought caused estates to run at 50% capacity for the past six months. Prices in Kenya fell sharply in Q1 2016. In Q2 2016 however, the market turned and kept its firmer position which has surprised many, as it was different compared to the other bumper years 13/14. The additional 50,000-60,000 MT from Kenya (a 20% increase compared to H1 2015) is currently being supported by the very strong Asian markets. Van Rees Group performed well in these conditions, but the result was impacted by some trading positions which led to a lower overall net profit in the first six months. Van Rees Group is well positioned to contribute to the Group given the experience of its trading teams.
Distribution and blending activities in food ingredients delivered a very strong performance in the first six months. All categories showed strong growth, highlighting the robustness of the business model. Developed blends grew by over 10% while trading and distribution contracts continue to increase sales and margins. Sales of traded products were up double-digit and net profit grew significantly on the back of an integrated business. The management team performed very well and achieved profitable growth.
H1 2016 does not include any items of a non-recurring character which would affect the comparison with H1 2015 financials. The H1 2015 results included one-off items, mainly consisting of the release of part of a contingent purchase price consideration and costs relating to termination of employees. The total negative net impact on H1 2016 net profit as compared with H1 2015 net result was € 0.3 million.
The Group's total balance sheet shortened when compared with 31 December 2015 mainly due to a reduction in inventory. Inventories decreased with € 16.5 million, partly offset by higher trade receivables (increase of € 9.0 million) and lower trade creditors (decrease of € 5.1 million).
Shareholders' equity had increased by € 0.4 million to € 168.7 million on 30 June 2016 (year-end 2015: € 168.3 million). In May 2016, the 2015 final dividend of € 14.4 million was paid (€ 0.60 per share). Long-term bank borrowings remained stable and short-term borrowing was reduced by € 1.3 million.
2016 started in line with the first half of 2015. 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 directors hereby declare that, to the best of their knowledge:
Rotterdam, 21 July 2016
| Erik Rietkerk | Allard Goldschmeding |
|---|---|
| CEO | CFO |
| Page | 7 | Consolidated balance sheet as at 30 June 2016 |
|---|---|---|
| Page | 8 | Consolidated income statement H1 2016 |
| Page | 8 | Consolidated cash flow statement H1 2016 |
| Page | 9 | Statement of changes in shareholders' equity H1 2016 |
| Page | 9 | Consolidated statement of comprehensive income H1 2016 |
| Page | 10 | Segment information H1 2016 |
| Page | 11 | Notes to the H1 2016 consolidated interim financial statements |
| Page | 12 | Financial calendar 2017 |
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:
Amsterdam Commodities N.V. (Acomo) Creative Venue PR Mr E.P. Rietkerk Mr F.J.M. Witte, spokesperson 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 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-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, (nuts), and Snick EuroIngredients N.V. in Ruddervoorde, Belgium, and Tefco EuroIngredients B.V. in Bodegraven, the Netherlands, (food ingredients). Acomo shares have been traded on Euronext Amsterdam since 1908.
before interim dividend
| (in € thousands) | 30 June 2016 | 31 December 2015 | 30 June 2015 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 60 941 | 60 436 | 59 604 |
| Property, plant and equipment | 40 465 | 42 091 | 40 234 |
| Other non-current assets | 1 266 | - | - |
| Deferred tax assets | 425 | 470 | 202 |
| Total non-current assets | 103 097 | 102 997 | 100 040 |
| Current assets | |||
| Inventories | 146 676 | 163 147 | 156 904 |
| Trade receivables | 84 190 | 75 150 | 78 160 |
| Other receivables | 3 809 | 4 627 | 3 802 |
| Derivative financial instruments | 947 | 1 613 | 3 113 |
| Cash and cash equivalents | 1 624 | 1 384 | 1 162 |
| Total current assets | 237 246 | 245 921 | 243 141 |
| Total assets | 340 343 | 348 918 | 343 181 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent Share capital |
10 800 | 10 796 | 10 714 |
| Share premium reserve | 50 649 | 50 571 | 49 267 |
| Other reserves | 10 779 | 13 268 | 12 249 |
| Retained earnings | 79 284 | 61 434 | 70 957 |
| Net profit for the period | 17 229 | 32 251 | 17 209 |
| Total shareholders' equity | 168 741 | 168 320 | 160 396 |
| Non-current liabilities and provisions | |||
| Bank borrowings | 7 850 | 7 868 | 8 518 |
| Deferred tax liabilities | 10 681 | 11 060 | 8 029 |
| Retirement benefit obligations | 1 849 | 1 908 | 2 099 |
| Other provisions | 754 | 1 213 | 2 800 |
| Total non-current liabilities | 21 134 | 22 049 | 21 446 |
| Current liabilities | |||
| Bank borrowings | 99 379 | 100 476 | 107 576 |
| Trade creditors | 32 447 | 37 538 | 31 063 |
| Tax liabilities | 3 480 | 1 137 | 5 737 |
| Derivative financial instruments | 408 | 1 150 | 1 433 |
| Other current liabilities and accrued expenses | 14 754 | 18 248 | 15 530 |
| Total current liabilities | 150 468 | 158 549 | 161 339 |
| Total equity and liabilities | 340 343 | 348 918 | 343 181 |
| (in € thousands) | H1 2016 | H1 2015 |
|---|---|---|
| Sales | 341 826 | 331 693 |
| Cost of goods sold | (284 865) | (275 457) |
| Gross profit | 56 961 | 56 236 |
| Personnel costs | (19 185) | (19 025) |
| General costs | (9 619) | (9 484) |
| Depreciation and impairment charges | (2 331) | (2 419) |
| Total cost | (31 135) | (30 928) |
| Operating income | 25 826 | 25 308 |
| Interest income | 28 | 5 |
| Interest expense | (1 628) | (1 364) |
| Other financial income and expenses | (9) | (360) |
| Profit before income tax | 24 217 | 23 589 |
| Corporate income tax | (6 988) | (6 380) |
| Net profit | 17 229 | 17 209 |
| Total basic EPS (in €) | 0.718 | 0.723 |
| Total diluted EPS (in €) | 0.714 | 0.716 |
| (in € thousands) | H1 2016 | H1 2015 |
|---|---|---|
| Cash flow from operating activities | 27 887 | 24 908 |
| Net changes in working capital | (3 254) | (19 945) |
| Net changes in bank financing of working capital | (181) | 21 908 |
| Paid interest and taxes | (5 960) | (7 512) |
| Total cash flow from operating activities | 18 492 | 19 359 |
| Cash flow from investing activities | (2 839) | (1 983) |
| Cash flow from financing activities | ||
| Dividend paid | (14 401) | (16 666) |
| Proceeds from new shares | 82 | 337 |
| Net changes in long term bank borrowings | (1 078) | (1 473) |
| Cash flow from financing activities | (15 397) | (17 802) |
| Net increase/(decrease) in cash and cash equivalents | 256 | (426) |
| Cash and cash equivalents at the beginning of the year | 1 384 | 1 558 |
| Exchange gains/(losses) on cash and cash equivalents | (16) | 30 |
| Cash and cash equivalents at the end of half year | 1 624 | 1 162 |
| Share | Net profit | |||||
|---|---|---|---|---|---|---|
| Share | premium | Other | Retained | for the | Total | |
| (in € thousands) | capital | reserve | reserves | earnings | period | equity |
| Balance at 1 January 2015 | 10 695 | 48 949 | 4 653 | 54 559 | 33 064 | 151 920 |
| Net profit for the period | - | - | - | - | 17 209 | 17 209 |
| Other comprehensive income | - | - | 7 559 | - | - | 7 559 |
| Appropriation of net profit | - | - | - | 33 064 | (33 064) | - |
| Issue of ordinary shares | 19 | 318 | - | - | - | 337 |
| Employee share option plan | - | - | 37 | - - | - | 37 |
| Dividend relating to 2014, final | - | - | - | (16 666) | - | (16 666) |
| Balance at 30 June 2015 | 10 714 | 49 267 | 12 249 | 70 957 | 17 209 | 160 396 |
| 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 |
| (in € thousands) | H1 2016 | H1 2015 |
|---|---|---|
| Net profit | 17 229 | 17 209 |
| Other comprehensive income | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | ||
| Movement currency translation reserves on equity, net | (1 421) | 4 576 |
| Movement currency translation differences on goodwill | (758) | 2 637 |
| Movement on cash flow hedge | (344) | 346 |
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | (2 523) | 7 559 |
| Total other comprehensive income | (2 523) | 7 559 |
| Total comprehensive income | 14 706 | 24 768 |
| Total comprehensive income attributable to shareholders of the parent | 14 706 | 24 768 |
| Spices and | Food | |||||
|---|---|---|---|---|---|---|
| (in € thousands) | Nuts | Edible Seeds | Tea | Ingredients | Other | Total |
| 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) |
| Interest income/(expense), net | (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 |
| H1 2015 | ||||||
| Sales | 159 238 | 101 562 | 61 933 | 10 750 | (1 790) | 331 693 |
| Costs | (146 876) | (90 949) | (58 438) | (9 498) | 1 529 | (304 232) |
| EBITDA | 12 362 | 10 613 | 3 495 | 1 252 | (261) | 27 461 |
| Depreciation | (116) | (1 761) | (220) | (290) | (31) | (2 418) |
| Financial results | (402) | (1 495) | (342) | (54) | 574 | (1 719) |
| Income tax expense | (2 961) | (2 310) | (767) | (344) | (82) | (6 464) |
| Non-recurring items, net of tax | - | 600 | - | - | (251) | 349 |
| Net result | 8 883 | 5 647 | 2 166 | 564 | (51) | 17 209 |
| Total assets | 113 566 | 116 124 | 51 438 | 11 581 | 50 472 | 343 181 |
| Total liabilities | 92 691 | 75 400 | 31 703 | 672 | (17 681) | 182 785 |
The column 'Other' mainly represents holding costs and intra Group items.
| (in € thousands) | NL | EU other | US | Other | Total |
|---|---|---|---|---|---|
| H1 2016 | 57 359 | 154 803 | 86 308 | 43 356 | 341 826 |
| H1 2015 | 49 869 | 156 457 | 96 895 | 28 472 | 331 693 |
| Other | H1 2016 | H1 2015 |
|---|---|---|
| Number of FTE's per 30 June | 591 | 594 |
| Effective tax rate (%) | 28.9% | 27.6% |
The interim financial statements for the six months ending 30 June 2016 comprise 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 2015.
The accounting policies and rules and measurement of income used for the preparation of the interim financial statements are consistent with the financial statements 2015 (published on the website of the Company) and are in accordance with IFRS as adopted by the European Union.
The H1 2016 interim financial statements are unaudited.
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.
The discontinuation of hedge accounting has no operational effect on the business, and only constitutes a timing difference. Unrealized foreign currency results are recognised in the income statement rather than on the balance sheet, whereas under IFRS hedge accounting these results are recognised to the income statement upon realisation.
The impact of the discontinuation on the H1 2016 net profit is not material.
The movements in shareholders' equity are shown in the consolidated statement of changes in shareholders' equity on page 9. During H1 2016, Acomo issued 10,000 new shares under the existing share option plan.
On 30 June 2016, the number of shares outstanding was 24,000,826 (31 December 2015: 23,990,826).
Based on the existing share options granted, 45,000 share options are vested but not yet exercised. A total of 205,500 share options will vest on 1 September 2016. In the years 2017 until 2021, a total of 160,000 share options will vest.
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 Report 2015 dated 3 March 2016 (published on the website of the Company) and 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.
| 16 February 2017 | Trading Update Q4 2016 – publication of the 2016 financials (unaudited) – after close |
|---|---|
| 9 March 2017 | Publication of the Annual Report 2016 – after close |
| 26 April 2017 | Annual General Meeting |
| 28 April 2017 | Ex-dividend date, Final dividend FY 2016 |
| 11 May 2017 | Dividend payment date, Final dividend FY 2016 |
| 20 July 2017 | Publication of the H1 2017 results (unaudited) – after close |
| 25 July 2017 | Ex-dividend date, Interim dividend H1 2017 |
| 4 August 2017 | Dividend payment date, Interim dividend H1 2017 |
All publications will be made available through www.acomo.nl
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