Earnings Release • Aug 30, 2019
Earnings Release
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Lievegem, 30 August 2019 – 7:30 a.m.
| Income statement in 000 EUR | ||||
|---|---|---|---|---|
| 30/06/19 | 30/06/18 | ∆ % | ||
| Revenue (net turnover) | 358 593 | 329 614 | 8,8% | |
| Underlying EBITDA | 25 532 | 23 129 | 10,4% | |
| EBITDA | 24 923 | 19 838 | 25,6% | |
| Underlying operating results (UEBIT) | 10 419 | 9 691 | 7,5% | |
| Result of operating activities (EBIT) | 9 393 | 5 747 | 63,4% | |
| Net financing costs | -1 838 | -2 156 | -14,7% | |
| Result of operating activities after net financing costs (EBT) | 7 555 | 3 591 | 110,4% | |
| Taxes | -2 870 | -1 084 | 164,8% | |
| Result after tax before share in the result of enterprises | 4 685 | 2 507 | 86,9% | |
| accounted for using the equity method | ||||
| Earnings after taxes (EAT) | 4 685 | 2 507 | 86,9% | |
| Profit in the financial year: share third parties | 49 | 41 | ||
| Profit in the financial year: share group | 4 636 | 2 466 | ||
| Financial position in 000 EUR | ||||
| 30/06/19 | 31/12/18 | |||
| Balance sheet total | 424 527 | 424 978 | -0,1% | |
| Equity | 122 588 | 125 028 | -2,0% | |
| Net financial debts | 121 471 | 122 679 | -1,0% | |
| Equity/Total assets (in %) | 28,9% | 29,4% | ||
| Gearing Ratio | 99,1% | 98,1% | ||
| Key figures in EUR per share | ||||
| 30/06/19 | 30/06/18 | |||
| Number of shares | 1 732 621 | 1 732 621 | ||
| Average number of shares | 1 732 621 | 1 732 621 | ||
| Net cash flow | 11,67 | 9,58 | 21,8% | |
| Earnings after taxes | 2,68 | 1,42 | 88,7% | |
| EBITDA | 14,38 | 11,45 | 25,6% |
Nancy De Sy - Group Communications Manager T +32 9 370 12 69 M +32 492 25 10 57 [email protected] 1
In 2018, the results of the companies acquired in 2017 were included in the income statement in full for the first time. For this reason, the results for 2019 and 2018 are comparable. The main achievements are:
The improved results are a combination of:
As in 2018, the four companies acquired (in 2017) continue to perform well. In the first half of the year, they contributed jointly and individually to the turnover and result according to plan. Integration activities continued in 2019, and in April Offerman was successfully migrated to the common ERP platform.
Raw material prices and other costs rose sharply in the first half of the year:
Due to the combination of all these factors:
The turnover of the Processed Meats Division increased by EUR 14.9 million (+7.3%) compared to 2018. This is mainly thanks to investments made in previous years for specific customer-focused projects.
In 2018, for example, considerable funds were invested in the Dutch factories, namely the 'slicing and packaging' capacity, for which Ter Beke is reaping the rewards in 2019.
In Belgium (Veurne) a 'slicing and packaging' project was started mid-2018 for the major part of a customer's product range. As well as the increase in turnover, the efficiency improvements initiated in the second half of 2018 were continued in 2019.
The processed meats industry – both for products and slicing activities – is still characterised by fierce price competition, which ultimately benefits consumers. For this reason, increases in raw material prices (e.g. pork) can only be incorporated to a limited extend in Belgium.
In the Netherlands, meat and processed meats with the 'Beter Leven' label have a considerable market share. To encourage pig farmers to implement the animal welfare criteria of the 'Beter Leven' concept, they rightly receive a premium. Through the so-called 'automatic price changes', this premium is applied throughout the chain, and the rise in prices of raw materials is translated into the price of the final product. In Belgium too, many are calling for such a programme to be introduced which would guarantee animal welfare and the viability of the entire chain.
In the Benelux, UK and Germany – where Ter Beke is mainly active in processed meats – many consumers show a growing interest in healthier recipes (such as less salt), better traceability and sustainable production. Sustainability in the processed meats industry mainly concerns stronger collaboration in the chain and recyclable packaging. Ter Beke holds a leading position in this regard.
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The turnover of the Ready Meals Division increased by EUR 14.1 million (+11.1%) compared to 2018, solely through organic growth.
Since the acquisition in 2017 of Stefano Toselli (France), Pasta Food Company (Poland) and KK Fine Foods (UK), Ter Beke now has a network of five production centres, which means it can supply all of Europe. Ter Beke is – as you may recall – European market leader in its Ready Meals segment, in brief: chilled, Mediterranean pasta meals.
The acquisition of KK Fine Foods provided Ter Beke with a "Brexit-proof" footprint in the UK.
All of the Division's business units score strongly when it comes to organic growth:
The ready meals industry in Europe continues to offer good prospects in all channels:
The condensed interim consolidated financial statements are set up in accordance with IAS 34 interim financial reporting, as accepted by the EU. These statements do not contain all information required for full annual accounts and need to be read together with the consolidated annual accounts for the reporting period ending 31 December 2018, as published in the annual report to the shareholders on the financial year 2018.
These condensed consolidated financial statements were approved for publication by the Board of Directors on 29 August 2019.
IFRS 16 requires the lessee to activate all lease and rental obligations on the balance sheet. The liability reflects all lease payments associated with the lease agreement, the asset reflects the right to use the asset during the agreed term of the lease.
Ter Beke has applied IFRS 16 with effect from 1 January 2019, in accordance with the transitional provisions, using the adjusted retrospective method. In other words, this means that the cumulative effect of applying IFRS 16 is recognised as a restatement in the opening balance of the transferred result at 1 January 2019, without restatement of the comparative figures.
The impact of this on the published figures for 2019 is as follows:
| 30/06/2019 | |
|---|---|
| Tangible non-current assets – user rights | 11 531 |
| Effect on total assets | 11 531 |
| Transferred loss | -69 |
| Deferred taxes | -29 |
| Long-term lease liabilities | 9 075 |
| Short-term lease liabilities | 2 512 |
| Revenue to be transferred | 42 |
| Effect on total equity and liabilities | 11 531 |
| Impact on EBITDA | 1 450 |
| Impact on EBIT | 84 |
| Impact on the net financing costs | -182 |
| Impact on EAT | -69 |
Nancy De Sy - Group Communications Manager T +32 9 370 12 69 M +32 492 25 10 57 [email protected] 5
Under IAS 34, the balance sheet figures of 30 June 2019 need to be compared with those of 31 December 2018.
The increase of EUR 7.7 million in tangible non-current assets is mainly due to the application of IFRS 16 for EUR 11.5 million. This increase was partially limited as the depreciation was higher than the investments.
In the first half of 2019, the Group invested EUR 8.8 million in non-current assets (including EUR 538,000 due to IFRS 16) as opposed to EUR 15.0 million in the same period in 2018. These relate primarily to the continuation of efficiency investments, infrastructure adjustments at the various sites and the further roll-out of the ERP package.
In addition, receivables decreased by EUR 7.8 million from EUR 121.9 million to EUR 114.1 million.
Net debt decreased by EUR 1.2 million to EUR 121.5 million. This decrease can be explained primarily by the net cash flow from operating activities of EUR 30.9 million, less EUR 9.6 million of paid investments (adjusted for revenue from disinvestments), as well as paid dividends and interests amounting to EUR 8.0 million, the repayment of EUR 13.3 million of long-term debts and the recognition of EUR 11.6 million of lease liabilities due to the application of IFRS 16.
The net debt as of 30 June 2019 and 31 December 2018 has been calculated as follows:
| 30/06/2019 | 31/12/2018 | ||
|---|---|---|---|
| Cash and cash equivalents | -21 587 | -23 175 | |
| Long-term interest-bearing liabilities | 128 099 | 130 042 | |
| Short-term interest-bearing liabilities | 14 959 | 15 812 | |
| Net financial debts | 121 471 | 122 679 | |
| of which IFRS 16 | 11 587 |
The equity difference is chiefly the result of the profit after tax in the first six months minus the dividend that was allocated over the previous financial year.
The most important points were explained in the Key figures and headlines section of this report.
REBIT and REBITDA – which reflect the recurring or underlying business performance – are now referred to as the underlying EBIT or underlying EBITDA respectively. The calculation at Ter Beke is as follows:
| 30/06/2019 | 30/06/2018 |
|---|---|
| 24 923 | 19 838 |
| -15 007 | -13 872 |
| -523 | -219 |
| 9 393 | 5 747 |
| 30/06/2019 30/06/2018 | ||
|---|---|---|
| Profit from operating activities (EBIT) | 9 393 | 5 747 |
| Severance payments | 484 | 1 299 |
| Acquisition costs | 0 | 242 |
| M & A costs | 125 | 0 |
| Strategic study | 0 | 1 330 |
| Start-up costs of new packaging concept project | 0 | 420 |
| Increase in restructuring provision | 417 | 0 |
| Restructuring costs Zoetermeer | 0 | 170 |
| Impairment Zoetermeer | 0 | 483 |
| Underlying profit from operating activities (U EBIT) | 10 419 | 9 691 |
| EBITDA | 24 923 | 19 838 |
| Severance payments | 484 | 1 299 |
| M & A costs | 125 | 0 |
| Acquisition costs | 0 | 242 |
| Strategic study | 0 | 1 330 |
| Start-up costs of new packaging concept project | 0 | 420 |
| Underlying EBITDA | 25 532 | 23 129 |
The Group is confident that, barring unforeseen market circumstances, the underlying operating results for 2019 will surpass the underlying operating results for 2018, even without taking the impact of IFRS 16 into consideration.
The Group's half-year financial report is available on www.terbeke.com in the Investor Relations module. The Dutch version of this half-yearly report is the sole official version.
The half-year financial report contains the condensed consolidated financial statements drawn up in accordance with IAS 34, the declaration without reservations of the auditor on this limited review and the other legally required specifications.
For questions about this press release or for further information, please contact:
Francis Kint* René Stevens CEO CFO Tel. +32 9 370 13 17 Tel. +32 9 370 13 45 [email protected] [email protected] * Permanent representative of BVBA Argalix
You can also review this press release and send us your questions through the Investor Relations module on our website.
For more information about Ter Beke, visit www.terbeke.com.
Annual Report 2019: At the latest on 30 April 2020 General Shareholders Meeting 2020: 28 May 2020
Annual Results 2019: 28 February 2020 before market opening
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