Interim / Quarterly Report • Jul 31, 2015
Interim / Quarterly Report
Open in ViewerOpens in native device viewer
Rotterdam, 30 July 2015
Main financial indicators first half year 2015
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 € 331.7 million in the first half of 2015 ('HY 2015') compared to € 306.4 million in the first half of 2014 ('HY 2014'), an increase by 8.3%. Net profit was stable at € 17.2 million (HY 2014: € 17.3 million), a decrease by 0.8%. The earnings per share decreased by 1.5% from € 0.734 per share in HY 2014 to € 0.723 in HY 2015.
CEO Erik Rietkerk, "In the past six months, our companies faced market developments that posed the usual challenges. Whereas some segments had to trade in markets with increasing price levels, other segments faced the effects of high volumes following outstanding harvests. We kept focusing on providing our customers with a reliable supply of high quality products sourced from suppliers which have been part of our business proposition for many years. The net profit of € 17.2 million is again an excellent achievement. Our interim dividend of € 0.40 per share is in line with our interim dividend policy that was aligned last year".
During the first six months of 2015, various developments affected Acomo's activities. Unrest in the Eurozone with Greece becoming a point of focus, wars in various parts of the Middle East, political turmoil in North African countries and continuing attention for food safety requirements. All of those resulted in challenging situations within the respective supply chains. In Europe, economic stabilization continued with North America showing promising signs of recovery. The US dollar to euro exchange rate strengthened significantly affecting price levels in Europe. Price level developments per product group again showed a diverse pattern of volatility showing trends ranging from steep declines - in for example various edible seeds and agro commodity markets - to stabilization and for some products - such as several spices and nuts - increases which could be substantial.
The trend of lower commodity price levels, led by lower oil price levels, 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.
| HY 2015 | HY 2014 Change % | ||
|---|---|---|---|
| Consolidated figures (in € millions) | |||
| Sales | 331.7 | 306.4 | 8.3% |
| Gross profit | 56.2 | 51.1 | 10.1% |
| EBITDA | 27.7 | 27.7 | 0.0% |
| Operating income (EBIT) | 25.3 | 25.7 | -1.4% |
| Financial result | -1.7 | -1.4 | 22.8% |
| Corporate income tax | -6.4 | -7.0 | -8.9% |
| Net profit | 17.2 | 17.3 | -0.8% |
| Impact of specific one-off items on net profit | 0.3 | 0.4 | -25.0% |
| Shareholders' equity | 160.4 | 135.5 | 18.4% |
| Total assets | 343.2 | 295.8 | 16.0% |
| Ratio's | |||
| Solvency - shareholders' equity as % of total assets | 46.7% | 45.8% | 0.9% |
| Return on Equity, annualized | 23.3% | 26.8% | -3.5% |
| Return On Net Capital Employed (RONCE), annualized | 19.5% | 23.0% | -3.5% |
| RONCE operating companies (excluding goodwill), annualized | 24.9% | 29.1% | -4.2% |
| Dividend pay-out ratio | 55.3% | 54.5% | 0.8% |
| Key performance indicators (in €) | |||
| Earnings per share | 0.723 | 0.734 | -1.5% |
| Interim-dividend per share | 0.40 | 0.40 | 0.0% |
| Equity per share per 30 June | 6.74 | 5.72 | 17.8% |
| Share price per 30 June | 22.70 | 16.92 | 34.2% |
| Market capitalization per 30 June (in millions) | 540.3 | 400.8 | 34.8% |
| Number of shares outstanding (in thousands) | |||
| Per 30 June | 23,809 | 23,697 | 0.5% |
During HY 2015, sales increased compared to HY 2014 to € 331.7 million (+ 8.3%) with price levels increasing on average, a strong average US dollar / euro rate and stable to lower volumes in various segments. The gross profit margin increased to 17.0% (HY 2014: 16.7%) due to continuous focus on value added and balancing business risks and rewards. Operating expenses (excluding non-recurring items) increased by 8.9% mainly due to the stronger US dollar against the euro. EBITDA was stable at € 27.7 million.
Total net finance results increased mainly due to on average higher working capital investments following price increases and due to forex results. The effective corporate income tax rate decreased from 28.7% to 27.6% mainly due to profits being realized in countries with a relatively lower effective income tax rate.
Net profit in HY 2015 compared to HY 2014 slightly decreased by € 0.1 million to € 17.2 million (- 0.8%). Excluding the comparable effects of non-recurring items amounting to € 0.1 million (HY 2014 positively affected as compared to HY 2015) net profit decreased by just 0.5%.
Once again, the spices, nuts and dried fruits activities 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 product categories. Customers covered price risks and non-compliance 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, showed some diverse developments. 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 grew again after some years of decline. Demand and sales of bird seed products showed a stable volume with price levels starting to following the downward trend of agri commodities. The SunButter® activities again showed some growth with targeted marketing efforts starting to get shape. The roasting, salting and packaging activities in SunGold Foods realized increasing results as compared to 2014 after operational efficiencies having been finalized. A fire at the Horace facility caused some damage. In a very short time frame, RRC management was able to successfully bring the capacity back to normal levels. The year 2015 started with rain in the North followed by sunny days since planting which is normally regarded as a sound basis for the upcoming harvests. Red River Commodities is in the mid-season now and it is too early to predict harvested volumes. Red River-van Eck again realized good results in its trading activities. In 2014, the European sunflower activities significantly increased their harvested volumes; during 2015, they faced some product quality issues that led to challenges in terms of satisfying customers with some operational losses as a result. SIGCO Warenhandel in Hamburg had a slower start due to high volumes of harvested seeds offered by origin resulting in lower price levels of traded seeds.
Our tea trading and blending activities acted in a market with increasing price levels after a year of very low price levels following large volumes of harvested teas in almost all tea producing countries. As a consequence, Van Rees Group further increased their margins whilst customers started to cover future price risks. Further investments were made in young talented trainees and in the new ERP IT system that was rolled out to North America. On April 1st, Maarten Obbink, the new managing director, has started to lead Van Rees Group.
Distribution and blending activities in food ingredients continued to grow with Snick EuroIngredients. The operations of Tefco EuroIngredients were fully integrated in Ruddervoorde, Belgium. The company added some selected new principals to its portfolio and new customers benefited from the new blending facilities in Ruddervoorde. The new facility has been HACCP, ISO22000, FSSC22000, GMP and BIO-ORGANIC approved. It provides very good opportunities for further growth through in-house added-value food ingredient blends.
Besides ongoing business developments within our subsidiaries, the following developments are mentioned specifically in the context of this 2015 half year report:
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 2014, the half year interim dividend was further 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 is being 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.
The Management Board and Supervisory Board have decided to pay an interim-dividend of € 0.40 per share in cash (2014: € 0.40; similar) payable on 12 August 2015. The ex-dividend date is 3 August 2015.
The HY 2015 results include several items with a non-recurring character which affect the comparison to the HY 2014 financials. The main non-recurring items in both half years were:
The total net impact on the HY 2015 net profit as compared to the HY 2014 net result was less than € 0.1 million year on year.
Van Rees Group, for the largest part, 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 2015, the average rate of the US dollar against the euro (1.117) strengthened signifcantly compared to HY 2014 (1.371) resulting in a positive impact on net profit in euros of € 1.3 million as compared to using the HY 2014 average exchange rates.
The euro/US dollar closing exchange rate on 30 June 2015 was 1.115 being significantly stronger than the 1.210 rate on 31 December 2014 causing an increasing effect on the total assets in the Group's balance sheet of € 14.5 million.
The net increase in tangible fixed assets compared to 31 December 2014 was mainly due to the stronger US dollar with depreciations exceeding capital expenditures in the Group.
The main changes in working capital related to the stronger US dollar combined with higher inventories caused by regular seasonality effects and on average higher price levels, increased trade receivables due to June 2015 sales being higher than December 2014 sales and lower trade creditors due to paying 2014 harvests to farmers in the beginning of 2015. This also resulted in higher working capital debt. In addition, in May 2015 the 2014 final dividend of € 16.7 million was paid (€ 0.70 per share).
Long-term loans changed due to contractual repayments of bank loans combined with the stronger US dollar.
The HY 2015 cash flows can be summarized as follows:
As a result, short term bank financing compared with HY 2014 increased by € 10.4 million to € 107.6 million as per 30 June 2015. Total available bank financing as at 30 June 2015 was € 228.4 million compared to € 221.6 million at the end of 2014.
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 Eurozone and around Europe still reflect imbalances which require attention and indirectly affect worldwide trading. Climate change 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 regulations remain a recurring topic.
We have confidence in the experience and market knowledge of all our trading teams and are confident that 2015 will be another successful year for our shareholders and other stakeholders.
The Company's executive directors hereby declare that, to the best of their knowledge:
Rotterdam, 30 July 2015
| Erik Rietkerk | Jan ten Kate |
|---|---|
| CEO | CFO |
| Page | 7 | Consolidated balance sheet as at 30 June 2015 |
|---|---|---|
| Page | 8 | Consolidated income statement HY 2015 |
| Page | 8 | Consolidated cash flow statement HY 2015 |
| Page | 9 | Statement of changes in shareholders' equity HY 2015 |
| Page | 9 | Consolidated statement of comprehensive income HY 2015 |
| Page | 10 | Segment information HY 2015 |
| Page | 11 | Notes to the HY 2015 consolidated interim financial statements |
| Page | 12 | Financial calendar 2015/2016 |
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:
Tel. +31 10 4051195 Tel. +31 20 4525225 Fax +31 10 4055094 Fax +31 20 4528650
[email protected] [email protected]
www.acomo.nl www.creativevenue.nl
Amsterdam Commodities N.V. (Acomo) is an international group with its principal business the trade and distribution of agricultural products. Our main trading subsidiaries are Catz International B.V. in Rotterdam (spices and food raw materials), Van Rees Group B.V. in Rotterdam (tea), Red River Commodities Inc. in Fargo, USA (confectionary sunflower seeds), Red River-Van Eck B.V. in Zevenbergen and SIGCO Warenhandelsgesellschaft mbH in Hamburg, Germany (edible seeds), King Nuts B.V. in Bodegraven (nuts) and Snick EuroIngredients N.V. in Ruddervoorde, Belgium and Tefco EuroIngredients B.V. in Bodegraven (food ingredients). The Acomo shares are traded at Euronext Amsterdam since 1908.
before interim dividend
| (in € thousands) | 30 June 2015 | 31 December 2014 | 30 June 2014 |
|---|---|---|---|
| ASSETS | |||
| Non-current assets | |||
| Intangible assets | 58 527 | 55 936 | 46 673 |
| Property, plant and equipment | 41 311 | 38 894 | 35 589 |
| Other investments in companies | - | 74 | 192 |
| Deferred tax assets | 202 | 215 | 106 |
| Total non-current assets | 100 040 | 95 119 | 82 560 |
| Current assets | |||
| Inventories | 156 904 | 164 537 | 134 557 |
| Trade receivables | 78 160 | 68 819 | 74 085 |
| Other receivables | 3 802 | 2 817 | 2 929 |
| Derivative financial instruments | 3 113 | 4 312 | 206 |
| Cash and cash equivalents | 1 162 | 1 558 | 1 427 |
| Total current assets | 243 141 | 242 043 | 213 204 |
| Total assets | 343 181 | 337 162 | 295 764 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the parent | |||
| Share capital | 10 714 | 10 695 | 10 664 |
| Share premium reserve | 49 267 | 48 949 | 48 469 |
| Other reserves | 12 249 | 4 652 | (4 995) |
| Retained earnings | 70 957 | 54 560 | 64 037 |
| Net profit for the period | 17 209 | 33 064 | 17 340 |
| Total shareholders' equity | 160 396 | 151 920 | 135 515 |
| Non-current liabilities and provisions | |||
| Bank borrowings | 8 518 | 10 355 | 5 671 |
| Deferred tax liabilities | 8 029 | 7 435 | 7 627 |
| Retirement benefit obligations | 2 099 | 1 913 | 1 218 |
| Other provisions | 2 800 | 5 366 | 3 323 |
| Total non-current liabilities | 21 446 | 25 069 | 17 839 |
| Current liabilities | |||
| Bank borrowings | 107 576 | 84 172 | 97 204 |
| Trade creditors | 31 063 | 51 212 | 23 416 |
| Tax liabilities | 5 737 | 5 118 | 3 932 |
| Derivative financial instruments | 1 433 | 1 213 | 491 |
| Other current liabilities and accrued expenses | 15 530 | 18 458 | 17 367 |
| Total current liabilities | 161 339 | 160 173 | 142 410 |
| Total equity and liabilities | 343 181 | 337 162 | 295 764 |
| (in € thousands) | HY 2015 | HY 2014 |
|---|---|---|
| Sales | 331 693 | 306 352 |
| Cost of goods sold | (275 457) | (255 217) |
| Gross profit | 56 236 | 51 135 |
| Personnel costs | (19 025) | (15 156) |
| General costs | (9 484) | (8 316) |
| Depreciation and impairment charges | (2 419) | (1 988) |
| Total cost | (30 928) | (25 460) |
| Operating income | 25 308 | 25 675 |
| Interest income | 5 | 28 |
| Interest expense | (1 364) | (1 162) |
| Other financial income and expenses | (360) | (231) |
| Profit before income tax | 23 589 | 24 310 |
| Corporate income tax | (6 380) | (6 970) |
| Net profit | 17 209 | 17 340 |
| Total basic EPS (in €) | 0.723 | 0.734 |
| Total diluted EPS (in €) | 0.716 | 0.725 |
| (in € thousands) | HY 2015 | HY 2014 |
|---|---|---|
| Cash flow from operating activities | 24 908 | 26 551 |
| Net changes in working capital | (19 945) | (31 054) |
| Net changes in bank financing of working capital | 21 908 | 37 484 |
| Paid interest and taxes | (7 512) | (7 829) |
| Total cash flow from operating activities | 19 359 | 25 152 |
| Cash flow from investing activities | (1 983) | (1 223) |
| Cash flow from financing activities | ||
| Dividend paid | (16 666) | (14 211) |
| Proceeds from new shares | 337 | 1 237 |
| Net changes in long term bank borrowings | (1 473) | (10 923) |
| Cash flow from financing activities | (17 802) | (23 897) |
| Net increase/(decrease) in cash and cash equivalents | (426) | 32 |
| Cash and cash equivalents at the beginning of the year | 1 558 | 1 381 |
| Exchange gains/(losses) on cash and cash equivalents | 30 | 14 |
| Cash and cash equivalents at the end of half year | 1 162 | 1 427 |
| Share | Net profit | |||||
|---|---|---|---|---|---|---|
| Share | premium | Other | Retained | for the | Total | |
| (in € thousands) | capital | reserve | reserves | earnings | period | equity |
| Balance at 1 January 2014 | 10 589 | 47 307 | (5 311) | 50 864 | 27 385 | 130 834 |
| Net profit for the period | - | - | - | - | 17 340 | 17 340 |
| Other comprehensive income | - | - | 249 | - | - | 249 |
| Appropriation of net profit | - | - | - | 27 385 | (27 385) | - |
| Issue of ordinary shares | 75 | 1 162 | - | - | - | 1 237 |
| Employee share option plan | - | - | 66 | - | - | 66 |
| Dividend relating to 2013, final | - | - | - | (14 211) | - | (14 211) |
| Balance at 30 June 2014 | 10 664 | 48 469 | (4 996) | 64 038 | 17 340 | 135 515 |
| 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 |
| (in € thousands) | HY 2015 | HY 2014 |
|---|---|---|
| Net profit | 17 209 | 17 340 |
| Other comprehensive income | ||
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | ||
| Movement currency translation reserves on equity, net | 4 576 | 276 |
| Movement currency translation differences on goodwill | 2 637 | 196 |
| Movement on cash flow hedge | 346 | (223) |
| Other comprehensive income to be reclassified to profit or loss in subsequent periods | 7 559 | 249 |
| Total other comprehensive income | 7 559 | 249 |
| Total comprehensive income | 24 768 | 17 589 |
| Total comprehensive income attributable to shareholders of the parent | 24 768 | 17 589 |
| Spices and | Food | |||||
|---|---|---|---|---|---|---|
| (in € thousands) | Nuts | Ingredients | Tea | Edible Seeds | Other | Total |
| HY 2015 | ||||||
| Sales | 159 238 | 10 750 | 61 933 | 101 562 | (1 790) | 331 693 |
| Costs | (146 992) | (9 788) | (58 658) | (92 710) | 1 498 | (306 650) |
| EBIT, recurring | 12 246 | 962 | 3 275 | 8 852 | (292) | 25 043 |
| Financial results | (402) | (54) | (342) | (1 495) | 574 | (1 719) |
| Income tax expense | (2 961) | (344) | (767) | (2 310) | (82) | (6 464) |
| Non-recurring items, net of tax | - | - | - | 600 | (251) | 349 |
| Net result | 8 883 | 564 | 2 166 | 5 647 | (51) | 17 209 |
| Total assets | 113 566 | 11 581 | 51 438 | 116 124 | 50 472 | 343 181 |
| Total liabilities | 92 691 | 672 | 31 703 | 75 400 | (17 681) | 182 785 |
| HY 2014 | ||||||
| Sales | 145 722 | 11 437 | 70 744 | 80 234 | (1 785) | 306 352 |
| Costs | (133 317) | (10 560) | (68 174) | (70 615) | 1 286 | (281 380) |
| EBIT, recurring | 12 405 | 877 | 2 570 | 9 619 | (499) | 24 972 |
| Financial results | (311) | (48) | (500) | (860) | 546 | (1 173) |
| Income tax expense | (3 023) | (282) | (652) | (2 899) | (1) | (6 857) |
| Non-recurring items, net of tax | - | - | 378 | - | 20 | 398 |
| Net result | 9 071 | 547 | 1 796 | 5 860 | 66 | 17 340 |
| Total assets | 100 647 | 11 387 | 62 470 | 77 045 | 44 215 | 295 764 |
| Total liabilities | 81 004 | 531 | 45 891 | 47 121 | (14 298) | 160 249 |
The column 'Other' mainly represents holding costs and intra Group items.
| Sales per geography | |||||
|---|---|---|---|---|---|
| (in € thousands) | NL | EU other | US | Other | Total |
| HY 2015 | 49 869 | 156 457 | 96 895 | 28 472 | 331 693 |
| HY 2014 | 44 642 | 126 088 | 89 827 | 45 795 | 306 352 |
| Other | HY 2015 | HY 2014 |
|---|---|---|
| Number of FTE's per 30 June | 594 | 542 |
| Effective tax rate (%) | 27.6% | 28.7% |
The interim financial statements for the six months ended 30 June 2015 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 2014.
The accounting policies and rules and measurement of income used for the preparation of the interim financial statements are consistent with the financial statements 2014 (published on the website of the Company) and are in accordance with IFRS as adopted by the European Union.
The HY 2015 interim financial statements are unaudited.
The movements in shareholders' equity are shown in the consolidated statement of changes in shareholders' equity on page 9. During HY 2015, Acomo issued 42,000 new shares under the existing Share Option Plan.
On 30 June 2015, the number of shares outstanding was 23,808,701 (31 December 2014: 23,766,701).
Based on the existing share options granted, 5,625 share options are vested but not yet exercised. A total of 185,000 share options will vest on 1 September 2015. In the years 2016 until 2019, a total of 362,000 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 Financial Statements 2014 dated 10 March 2015 (published on the website of the Company) and are unchanged. The main risks and uncertainties remain applicable in the current financial year.
=======
| 22 October 2015 | Trading update Q3 2015 – after close |
|---|---|
| 11 February 2016 | Trading Update Q4 2015 – publication of the 2015 financials (unaudited) – after close |
| 3 March 2016 | Publication of the Annual Report 2015 – after close |
| 19 April 2016 | Trading update Q1 2016 – after close |
| 26 April 2016 | Annual General Meeting |
| 21 July 2016 | Publication of the HY 2016 results (unaudited) – after close |
All publications will be made available through www.acomo.nl
Have a question? We'll get back to you promptly.