Wessanen update on 2013 performance of US subsidiary ABC
(Thomson Reuters ONE) -
Year-to-date, the development of the market for frozen pouches has continued to
disappoint. Since we do not expect a clear improvement for the remainder of
2013, our US subsidiary ABC is expected to incur a loss for the full year. The
decline of the frozen pouches segment has resulted in lower volumes at Daily's,
under-utilisation of production facilities and inventory write-downs. Immediate
short term corrective actions have been initiated to improve profitability and
we have started a reassessment of ABC's business model, including lowering the
cost base in line with reduced volumes.
With its Daily's brand ABC has been at the forefront in the development of the
frozen pouches segment of the premixed ready-to-drink category. Following two
years of strong growth, all market participants had equal positive expectations
for continued market growth, in our case based on our consumer research and
extensive discussions with wholesalers and retailers. This expected strong
market growth has attracted higher competition from both direct competitors and
substitute products.
After a subdued start to the year, the premixed frozen pouches market has not
picked up during the important summer season. Year-to-date, the market has lost
over 20% in both volume and value. Based on the latest consumer off-take data,
we do not foresee a meaningful market improvement for the remainder of the year
To further build on Daily's strong position, we introduced six new flavours
during spring 2013, expanding the range to 13 flavours and we ran a new
campaign including TV, print and online activation. We have also further grown
our distribution coverage. Notwithstanding these efforts, Daily's has
underperformed the broader ready-to-drink market year-to-date, although Daily's
has maintained its clear leadership share position in the pouch segment.
The consequent substantial volume short fall versus the 2013 budget and the
prior year has resulted in under absorption of fixed production and overhead
costs. In addition, we have taken write-downs on aged inventory and packaging
materials.
On the other hand, ABC's leading fruit drinks brand Little Hug continues to
perform well, showing sustained revenue growth and increased market share. We
continue to invest in brand activation and the introduction of new flavours such
as Berry Blend and Apple Orchard are showing promising initial results.
As a result of aforementioned, ABC's operating result for H1 2013 amounts to
US$(1.4) million which compares to US$6.5 million for the comparable period last
year.
Based on our current market trend projections, the operational gearing of our US
operations and the risk of further obsolete inventory, we expect ABC to show a
full year 2013 operational loss (EBITE) of US$5-10 million. For 2014, we expect
ABC to be profitable again, based amongst others on our immediate corrective
actions.
In Europe, our three businesses continued to perform well and in accordance with
our plan. During the first half of 2013, our two core segments - Grocery and HFS
- both showed an increase of normalised operating results to ?15.6 million (H1
2012: ?10.0 million) and ?2.8 million (H1 2012: ?(0.5) million) respectively,
while at IZICO the normalised operating result has doubled to ?1.5 million (H1
2012: ?0.7 million).
For Wessanen, the first half 2013 operating result (EBITE) amounts to ?4.8
million versus ?6.2 million last year. Exceptional items in the second quarter
amount to ?(1.3) million, of which ?(1.0) is attributable to Grocery, ?(0.2)
million to HFS and ?(0.1) million to ABC.
The full Q2 results and semi-annual report will be published on Thursday 25th of
July.
Conference call for analysts, investors & media
At 8h30 CET, a conference call for analysts, investor & media will be hosted by
Piet Hein Merckens (CEO) and Ronald Merckx (CFO). The dial-in number is +31 (0)
20 794 8504 (toll free 0800 265 8528). The press release and presentation will
be available for download at www.wessanen.com.
For more information
Carl Hoyer (VP Corporate Communications)
Phone +31 (0)20 3122 140 / +31 (0)6 12 35 56 58
Email carl.hoyer(at)wessanen.com
Click here to download press release:
http://hugin.info/143317/R/1716914/570769.pdf
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Royal Wessanen nv via Thomson Reuters ONE
[HUG#1716914]
Unternehmensinformation / Kurzprofil:
Datum: 17.07.2013 - 07:13 Uhr
Sprache: Deutsch
News-ID 279049
Anzahl Zeichen: 5291
contact information:
Town:
AT Amsterdam Zuidoost
Kategorie:
Business News
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