Quarterly Report • Aug 26, 2011
Quarterly Report
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HALF YEAR FINANCIAL REPORT
FIRST SEMESTER 2011
| 30/06/2011 | 31/12/2010 | |
|---|---|---|
| Assets | ||
| Fixed assets | 146.587 | 149.323 |
| Goodwill | 35.204 | 35.204 |
| Intangible fixed assets | 1.887 | 2.009 |
| Tangible fixed assets | 109.352 | 111.974 |
| Financial fixed assets | 144 | 136 |
| Deferred tax assets | 0 | 0 |
| Current assets | 95.719 | 93.290 |
| Stocks | 27.450 | 23.812 |
| Trade- and other receivables | 58.668 | 64.692 |
| Cash and cash equivalents | 9.601 | 4.786 |
| Total assets | 242.306 | 242.613 |
| Liabilities | ||
| Shareholders equity | 89.257 | 89.116 |
| Capital and issue premiums | 53.097 | 53.097 |
| Reserves | 36.160 | 36.019 |
| Minority interests | ||
| Deferred tax liabilities | 8.305 | 8.121 |
| Long-term obligations | 33.776 | 42.249 |
| Provisions | 1.750 | 1.791 |
| Long-term interest-bearing obligations | 32.026 | 40.458 |
| Other long-term obligations | ||
| Short-term obligations | 110.968 | 103.127 |
| Short-term interest-bearing obligations | 31.590 | 21.496 |
| Trade liabilities and other debts | 65.288 | 65.539 |
| Staff wage liabilities | 11.987 | 13.916 |
| Tax liabilities | 2.103 | 2.176 |
| Total liabilities | 242.306 | 242.613 |
| 30/06/2011 | 30/06/2010 | |
|---|---|---|
| Income | 198.528 | 197.389 |
| Trade goods, raw and auxiliary materials | -103.102 | -101.250 |
| Services and miscellaneous goods | -41.953 | -40.253 |
| Wages and salaries | -37.019 | -36.474 |
| Depreciation costs and impairments on fixed assets | -9.112 | -9.028 |
| Impairments, write-offs and provisions | 195 | 104 |
| Other operating costs | -99 | 166 |
| Result of operating activities | 7.438 | 10.654 |
| Financial income | 144 | 146 |
| Financial expenses | -1.533 | -2.283 |
| Result of operating activities after net financing expenses | 6.049 | 8.517 |
| Tax | -1.541 | -2.789 |
| Profit of the period | 4.508 | 5.728 |
| Profit per share | 2,60 | 3,31 |
| Diluted profit per share | 2,60 | 3,31 |
| 30/06/2011 | 30/06/2010 | |
|---|---|---|
| Profit of the financial year Conversion differences |
4.508 -29 |
5.728 98 |
| Comprehansif result | 4.479 | 5.826 |
| Capital | Capital | Issue reserves premiums |
Reserved profits |
Calculation differences |
Total | Number of shares |
|
|---|---|---|---|---|---|---|---|
| Balance on 1 January 2010 | 4.903 | 0 | 48.288 | 30.082 | -465 | 82.808 | 1.732.621 |
| Own share reserve Dividend |
-4.072 | 0 -4.072 |
|||||
| Comprehensif result for the period | 5.728 | 98 | 5.826 | ||||
| Movements via reserves -Result from own shares |
-10 | -10 | |||||
| Balance on 30 June 2010 | 4.903 | 0 | 48.288 | 31.728 | -367 | 84.552 | 1.732.621 |
| Own share reserve Dividend |
-94 | -94 0 |
|||||
| Comprehensif result for the period | 4.730 | -62 | 4.668 | ||||
| Movements via reserves -Result from own shares |
-10 | -10 | |||||
| Balance on 31 December 2010 | 4.903 | -94 | 48.288 | 36.448 | -429 | 89.116 | 1.732.621 |
| Own share reserve Dividend |
-4.332 | 0 -4.332 |
|||||
| Comprehensif result for the period | 4.508 | -29 | 4.479 | ||||
| Movements via reserves -Result from own shares |
-6 | -6 | |||||
| Balance on 30 June 2011 | 4.903 | -94 | 48.288 | 36.618 | -458 | 89.257 | 1.732.621 |
| 30/06/2011 | 30/06/2010 | |
|---|---|---|
| Operating activities | ||
| Result of operating activities | 7.438 | 10.653 |
| Adjustments for: | ||
| -Depreciation | 9.112 | 9.028 |
| -Change in impairments and write-offs | 4 | -4 |
| -Change in provisions | -199 | -100 |
| -Proceeds from the sale of fixed assets | 39 | 122 |
| -Proceeds from share-based payment transactions | -6 | -10 |
| Changes in net operating capital | ||
| -Changes in stock | -3.638 | -537 |
| -Changes in trade and other receivables | 6.023 | 1.988 |
| -Changes in trade and other liabilities | 748 | 1.215 |
| -Changes in other items | -29 | 98 |
| Cash from operating activities | 19.492 | 22.453 |
| Tax paid | -2.875 | 576 |
| Net cash from operating activities | 16.617 | 23.029 |
| Investing activities | ||
| Proceeds from the sale of tangible fixed assets | 986 | 203 |
| Investments in intangible fixed assets | -302 | -521 |
| Investments in tangible fixed assets | -8.295 | -8.569 |
| Net investments in financial fixed assets | -8 | -19 |
| Takeover of subsidiaries | 0 | 0 |
| Net cash used in investing activities | -7.619 | -8.906 |
| Financing activities | ||
| Proceeds from share issues + mutations own shares | 0 | 0 |
| Proceeds from take-up of new loans | 12.096 | 6.500 |
| Dividend payments to shareholders | -4.455 | -4.043 |
| Interest paid (through P&L account) | -1.176 | -1.313 |
| Loan settlement | -10.342 | -11.421 |
| Repayment of financial leasing liabilities | -93 | -395 |
| Other financial resources/(expenses) | -212 | -825 |
| Net cash from financing activities | -4.182 | -11.497 |
| Net change in cash and cash equivalents | 4.816 | 2.626 |
| Cash funds at the beginning of the year | 4.785 | 2.683 |
| Cash funds at the end of the year | 9.601 | 5.309 |
Ter Beke (Euronext Brussels: TERB) is an innovating Belgian fresh foods group selling its range of products in 10 European countries. The group has 2 core activities: processed meats and fresh ready meals; it has 9 industrial sites in Belgium, the Netherlands and France and employs approximately 1.850 people. Ter Beke generated a turnover of EUR 402 million in 2010.
Processed meats Division:
Ready meals Division:
The above 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 2010, as published in the annual report to the shareholders over the year 2010.
The consolidation circle has not changed since 31 December 2010.
These condensed interim consolidated financial statements were approved for publication by the Board of Directors on 25 August 2011.
The valuation rules used in preparing these condensed interim consolidated financial statements are consistent with those set out and applied in preparing the consolidated financial statements for the accounting period ending 31 December 2010.
In comparison with the consolidated annual report as of 31 December 2010, the following new Standards and Interpretations became effective in the current period:
This interpretation provides guidance on debt for equity swaps.
Applying these improvements to IFRS (2010) has no significant impact on the Group's reported results or financial position.
Per 30 June 2011 the Group did not apply yet in the interim financial statements the following new Standards and Interpretations which have been issued at the date of approval of this interim annual report, but had not yet come into effect at the date of the approval of the interim financial statements:
No changes were made to the estimated amounts in the financial statements over the previous financial year.
The General Shareholders Meeting of 26 May 2011 approved the dividend proposed by the Board of Directors (2.50 EUR/share). The awarded dividend amounted to a total of EUR 4,331,552.50, of which more than 99% had been paid per 30 June 2011.
The results of the group are not influenced by seasonal effects, except for a higher level of activity in December.
There were no important events which have a material impact on the condensed financial statements. Ter Beke and the shareholders of Stefano Toselli signed on May 25th, 2011 the final agreements for the incorporation of a joint venture. This joint venture is to produce and sell lasagne and ready meals in Central and Eastern Europe. As of 30 June 2011, the joint venture had not yet been formally incorporated. In line with the group's accounting standards, the joint venture will be accounted for via the equity accounting method. Hence, the joint venture turnover will not affect the consolidated group turnover and the share of the group in the results of the joint venture will be reported as a separate item in the consolidated income statement.
There are no material events to be reported post balance sheet at the date of the present half year financial report.
In the first semester of 2011, no related party transactions occurred that had a material influence on the financial position or the results of the group in that period.
The group invested EUR 7.4 million in the first half of 2011. These investments related primarily to the next phase of the automation investments in the patéproduction in Wommelgem and the continuation of various efficiency and infrastructure investments in all other sites. The EUR 9.1 million depreciations and impairments consist of EUR 9.3 million recurring depreciations and EUR 0.2 million reversal of previously estimated impairments.
The group faces an exchange rate risk on the sales in Pound Sterling (GBP). On 30 June 2011, long term contracts were open for the sale of GBP 1.8 million against EUR and an option to sell GBP 4.5 million against EUR. On 31 December 2010, long term contracts were open for the sale of GBP 8.2 million against EUR and an option to sell GBP 4.1 million against EUR. On 30 June 2010, a negative market value of EUR 0.5 million was recorded on open long term contracts.
On 30 June 2011, the group had a net GBP position of GBP 1.1 million (GBP 2.4 million on 31 December 2010).
Under IAS-34, the balance sheet figures of 30 June 2011 are to be compared with those of 31 December 2010. Changes in balance sheet items are limited as there have been no changes in the consolidation circle since 31 December 2010.
Fixed assets decrease by EUR 2.7 million. This is the result of EUR 7.4 million investments, EUR 9.1 million depreciations and EUR 1 million sales of fixed assets.
Net debt decreases by EUR 3.2 million. This is the result of the EUR 16.6 million incoming cashflow from operations as opposed to a EUR 13.4 million outgoing cashflow, including paid up investments (EUR 7.6 million) and dividend and interest payments (EUR 5.8 million). All the other limited changes in the balance sheet are due to seasonal effects.
The equity increase (+0.2%) is the result of the first semester after tax profit decreased with the dividend that was granted over 2010.
In the first semester 2011, the total group turnover increased by 0.6% from EUR 197.4 million to EUR 198.5 million.
In the ready meals division, the turnover increased by EUR 4.1 million (+6.7%). This increase is mainly due to a strong volume increase in lasagne and other pasta meals.
In the processed meats division, the turnover decreased by EUR 3.0 million (-2.2%) with stable total volumes. The turnover decrease is mainly due to a changed productmix, whereby sales volumes of cheaper products go up to the detriment of sales volumes of more expensive products.
EBITDA decreases by EUR 3.2 million (-16.5%) going from EUR 19.6 million in 2010 to EUR 16.4 million in 2011.
This decrease compared to the same period of 2010 is mainly due to the rise in raw material prices. The group has been facing strong increases of the price of important raw materials as of the second half of 2010. As the group primarily enters into longer term contracts with its major retail customers, there is an inevitable delay in charging these price increases on in the sales prices. This negatively influences the evolution of the results in the first semester of 2011 but this situation should normalise over the long run.
Ter Beke opts to further invest in the quality of its produce, in innovation and in the support of its Come a casa® brand in Belgium. The brand investments gave rise to a continued strong increase in sales in 2011 in all channels.
At the same time, the group continues to work on a strict cost control and cost reduction on all its sites in an attempt to limit the impact of the raw material price increase on the results of the group. In the first semester of 2011, the results of a number of efficiency investments that had been done in this respect, primarily in the ready meals site in Wanze, were not realised.
Total non-cash costs remain unchanged at EUR 8.9 million. Hence, the EUR 3.2 million EBITDA decrease gives rise to a similar decrease of the EBIT.
The EUR 0.7 million improvement of the net financing costs is almost entirely due to the difference in the exchange rate result on the GBP pursuant to the group's hedging policy.
The first semester 2011 tax rate (25.5%) is in line with the tax rate over the financial year 2010 (26.8%).
| 30/06/2011 | 30/06/2010 | |||||
|---|---|---|---|---|---|---|
| Processed Meats |
Ready Meals |
Total | Processed Meats |
Ready Meals |
Total | |
| Segment income statement | ||||||
| Segment sales | 133.286 | 65.242 | 198.528 | 136.272 | 61.117 | 197.389 |
| Segment results Non-allocated results Net financing cost Taxes Consolidated result |
3.768 | 4.679 | 8.447 -1.009 -1.389 -1.541 4.508 |
5.734 | 6.411 | 12.145 -1.491 -2.137 -2.789 5.728 |
| Other segment information | ||||||
| Segment investments Non-allocated investments Total investments |
5.305 | 1.707 | 7.012 381 7.393 |
5.805 | 4.066 | 9.871 262 10.133 |
| Segment depreciations and non-cash costs Non-allocated depreciations and non-cash costs Total depreciations and non-cash costs |
5.360 | 3.224 | 8.584 333 8.917 |
5.171 | 3.419 | 8.590 334 8.924 |
The difference between the actual GBP exchange rates and the standard exchange rates is added to the segment result in each period in order to obtain a better view on the economic result of the segment. This amount is corrected in the non-allocated results. These also contain the costs of central services that are not allocated to one of the divisions.
As the turnover between the divisions is non-material, the group opted to report only the extra-group turnover.
| Calculation earnings per share | ||
|---|---|---|
| 30/06/2011 | 30/06/2010 | |
| Number of outstanding ordinary shares per 1 January | 1.732.621 | 1.732.621 |
| of the financial year | ||
| Effect of issued ordinary shares | ||
| Weighted average number of outstanding ordinary shares | ||
| per 30 June of the financial year | 1.732.621 | 1.732.621 |
| Net profit in 000 EUR | 4.508 | 5.728 |
| Average number of shares | 1.732.621 | 1.732.621 |
| Profit per share | 2,60 | 3,31 |
| Calculation diluted earnings per share | ||
| 30/06/2011 | 30/06/2010 | |
| Net profit in 000 EUR | 4.508 | 5.728 |
| Average number of shares | 1.732.621 | 1.732.621 |
| Dilution effect warrant plans | 0 | 0 |
| Adjusted average number of shares | 1.732.621 | 1.732.621 |
| Diluted profit per share | 2,60 | 3,31 |
| Income statement in 000 EUR | |||
|---|---|---|---|
| 30/06/11 | 30/06/10 | ∆% | |
| Revenue (net turnover) | 198.528 | 197.389 | 0,6% |
| EBITDA (1) | 16.355 | 19.578 | -16,5% |
| Result of operating activities (EBIT) | 7.438 | 10.654 | -30,2% |
| Net financing costs | -1.389 | -2.137 | -35,0% |
| Result of operating activities | 6.049 | 8.517 | -29,0% |
| after net financing costs (EBT) | |||
| Taxes | -1.541 | -2.789 | -44,7% |
| Earnings after taxes (EAT) | 4.508 | 5.728 | -21,3% |
| Net cash flow (2) | 13.425 | 14.652 | -8,4% |
| REBITDA (3) | 16.355 | 19.578 | -16,5% |
| Recurring result of operating activities (REBIT) | 7.438 | 10.654 | -30,2% |
| Financial position in 000 EUR | |||
| 30/06/11 | 31/12/10 | ||
| Balance sheet total | 242.306 | 242.613 | -0,1% |
| Equity | 89.257 | 89.116 | 0,2% |
| Net financial debts | 54.015 | 57.168 | -5,5% |
| Equity/Total assets (in %) | 36,8% | 36,7% | |
| Gearing Ratio (4) | 60,5% | 64,2% | |
| Key figures in EUR per share | |||
| 30/06/11 | 30/06/10 | ||
| Number of shares | 1.732.621 | 1.732.621 | 0,0% |
| Average number of shares | 1.732.621 | 1.732.621 | 0,0% |
| Net cash flow | 7,75 | 8,46 | -8,4% |
| Earnings after taxes | 2,60 | 3,31 | -21,3% |
| EBITDA | 9,44 | 11,30 | -16,5% |
(1) EBITDA: result of operating activities + depreciation + impairment + fluctuations in provisions
(2) Net cash flow: Result after taxes + depreciation + impairment + fluctuations in provisions
(3) REBITDA: EBITDA from recurring operating activities
(4) Gearing Ratio: Net financial debt/Equity
It is clear that we live difficult economic times. This is reflected amongst others in the rise of raw material prices, a strong rise in energy costs, and more prudent consumer behaviour. Competition between the various players in the market increased, both on the supplier side as on the customer side.
In the first semester 2011, the total group turnover increased by 0.6% from EUR 197.4 million to EUR 198.5 million.
In the ready meals division, the turnover increased by EUR 4.1 million (+6.7%). This increase is mainly due to a strong volume increase in lasagne and other pasta meals.
In the processed meats division, the turnover decreased by EUR 3.0 million (-2.2%) with stable total volumes. The turnover decrease is mainly due to a changed productmix, whereby sales volumes of cheaper products go up to the detriment of sales volumes of more expensive products.
EBITDA decreases by EUR 3.2 million (-16.5%) going from EUR 19.6 million in 2010 to EUR 16.4 million in 2011.
This decrease compared to the same period of 2010 is mainly due to the rise in raw material prices. The group has been facing strong increases of the price of important raw materials as of the second half of 2010. As the group primarily enters into longer term contracts with its major retail customers, there is an inevitable delay in charging these price increases on in the sales prices. This negatively influences the evolution of the results in the first semester of 2011 but this situation should normalise over the long run.
Ter Beke opts to further invest in the quality of its produce, in innovation and in the support of its Come a casa® brand in Belgium. The brand investments gave rise to a continued strong increase in sales in 2011 in all channels.
At the same time, the group continues to work on a strict cost control and cost reduction on all its sites in an attempt to limit the impact of the raw material price increase on the results of the group. In the first semester of 2011, the results of a number of efficiency investments that had been done in this respect, primarily in the ready meals site in Wanze, were not realised.
Total non-cash costs remain unchanged at EUR 8.9 million. Hence, the EUR 3.2 million EBITDA decrease gives rise to a similar decrease of the EBIT.
The EUR 0.7 million improvement of the net financing costs is almost entirely due to the difference in the exchange rate result on the GBP pursuant to the group's hedging policy.
The first semester 2011 tax rate (25.5%) is in line with the tax rate over the financial year 2010 (26.8%).
Under IAS-34, the balance sheet figures of 30 June 2011 are to be compared with those of 31 December 2010. Changes in balance sheet items are limited as there have been no changes in the consolidation circle since 31 December 2010.
Fixed assets decrease by EUR 2.7 million. This is the result of EUR 7.4 million investments, EUR 9.1 million depreciations and EUR 1 million sales of fixed assets.
Net debt decreases by EUR 3.2 million. This is the result of the EUR 16.6 million incoming cashflow from operations as opposed to a EUR 13.4 million outgoing cashflow, including paid up investments (EUR 7.6 million) and dividend and interest payments (EUR 5.8 million). All the other limited changes in the balance sheet are due to seasonal effects.
The equity increase (+0.2%) is the result of the first semester after tax profit decreased with the dividend that was granted over 2010.
The group invested EUR 7.4 million in the first half of 2011. These investments related primarily to the next phase of the automation investments in the patéproduction in Wommelgem and the continuation of various efficiency and infrastructure investments in all other sites.
As previously announced, Ter Beke and the shareholders of France based Stefano Toselli signed on May, 25th, 2011 the final agreements with regard to their joint venture for the production and sale of lasagne and pasta meals in Central and Eastern Europe. The business plan provides for the construction of a production plant that will produce for the Central and Eastern European market. Pursuant to a thorough investigation, it was decided to construct the plant in Opole, a city in the south of Poland.
The group expects a further turnover increase in the second semester of 2011.
The margins remain under pressure in both divisions, mainly because of the strong increase in raw material prices. Considering the phasing of the adjustment of the sales prices, we expect the net result for the second semester of 2011 to be in line with that of 2010.
In the first semester of 2011, no related party transactions occurred that had a material influence on the financial position or the results of the group in that period.
The material risks and uncertainties for the remainder of 2011 are largely the same as described on page 26 and following of the annual report on the financial year 2010 and relate primarily to the quality and price fluctuations of the raw materials used.
The undersigned, Marc Hofman, Managing Director, and René Stevens, Chief Financial Officer, declare that, to their knowledge:
Waarschoot, 25 August 2011
Marc Hofman René Stevens
Managing Director Chief Financial Officer
FREE TRANSLATION The original text of this report is in Dutch
To the board of directors
We have performed a limited review of the accompanying consolidated condensed balance sheet, condensed income statement, condensed statement of comprehensive income, condensed cash flow statement, condensed statement of changes in equity and selective notes (jointly the "interim financial information") of Ter Beke NV ("the company") and its subsidiaries (jointly "the group") for the sixmonth period ended 30 June 2011. The board of directors of the company is responsible for the preparation and fair presentation of this interim financial information. Our responsibility is to express a conclusion on this interim financial information based on our review.
The interim financial information has been prepared in accordance with IAS 34, "Interim Financial Reporting" as adopted by the EU.
Our limited review of the interim financial information was conducted in accordance with the recommended auditing standards on limited reviews applicable in Belgium, as issued by the "Institut des Réviseurs d'Entreprises/Instituut van de Bedrijfsrevisoren". A limited review consists of making inquiries of group management and applying analytical and other review procedures to the interim financial information and underlying financial data. A limited review is substantially less in scope than an audit performed in accordance with the auditing standards on consolidated annual accounts as issued by the "Institut des Réviseurs d'Entreprises/Instituut van de Bedrijfsrevisoren". Accordingly, we do not express an audit opinion.
Based on our limited review, nothing has come to our attention that causes us to believe that the interim financial information for the six-month period ended 30 June 2011 is not prepared, in all material respects, in accordance with IAS 34 "Interim Financial Reporting" as adopted by the EU.
Kortrijk, 25 August 2011
DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by
Dirk Van Vlaenderen Kurt Dehoorne
_________________ ____________
If you have any questions on the present half year report or for further information, please contact:
Marc Hofman René Stevens Managing Director Chief Financial Officer Tel. + 32 (0)9 370 13 16 Tel. +32 (0)9 370 13 45
[email protected] [email protected]
You can also review the present half year report and address us your questions through the investor relations module on our website (www.terbeke.com).
Annual report 2011: At the latest on 30 April 2012 Business update first quarter 2012: 11 May 2012 before market opening Shareholders' meeting 2012: 31 May 2012 at 11 a.m.
Business update third quarter 2011: 4 November 2011 before market opening Annual results 2011: 29 February 2012 before market opening
Ter Beke (Euronext Brussels: TERB) is an innovating Belgian fresh foods group selling its range of products in 10 European countries. The group has 2 core activities: processed meats and fresh ready meals; it has 9 industrial sites in Belgium, the Netherlands and France and employs approximately 1.850 people. Ter Beke generated a turnover of EUR 402 million in 2010.
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