Oct. 9 - At its meeting convened on September 28th, 2007, the Supervisory Board examined the consolidated accounts and financial statements presented by the Executive Board for FY 2006-2007.
1/ Turnover
At the close of FY 2006-2007, annual turnover stood at 1,253 million euros, up 5.1% on the previous year's figure (at constant foreign exchange rates) and totally in line with the Group's forecasts. Fourth-quarter performance, up 6.9 %, was particularly dynamic. Canned-vegetable sales (+6.4%) surged in the 4th quarter (+8%), both in European Union territories and in Eastern Europe.
Frozen-vegetable sales also showed a marked improvement in the 4th quarter (+9.5%). Overall annual performance in this sector was up 3.4%, a figure accounted for in large part by sales in the food-service market.
Chilled-vegetable sales, up 4.4% on the previous year's figure, were penalized by unfavourable weather conditions, with bagged-salad and prepared-salad sales being adversely affected by an overly mild winter and a cold spring respectively.
Overall growth in annual sales is reflective of the recovery in consumption in Western Europe, persistently buoyant sales in Central and Eastern Europe, and intensification in marketing expenditure towards the end of the financial year.
2/ Operating profit
Profit from operations increased sharply by 16.2 million euros to 84 million euros. In FY 2006 – 2007 operating profit represented 6.7 % of turnover as opposed to 5.7 % in FY 2005 – 2006. After deduction of non-recurrent items—mainly accounted for by the change in the method of inventory valuation, operating profit on ordinary activities stood at 71.9 million euros, up 2 % on the previous year's figure.
This improvement in profitability was achieved despite:
- A significant increase in marketing expenditure (+10 %) to develop our brands;
- Extremely difficult production conditions in north-western Europe throughout the summer of 2006;
- A marked inflation in the prices of certain consumables (packaging, energy);
- Unfavourable exchange rates.
3/ Financial result
The financial result reflects a burden of 12.3 million euros (as opposed to 9.6 million in FY 2005 – 2006). This variation is mainly due to the impact of a significant increase in interest rates on average indebtedness which remained stable. The foreign-exchange hedging contracts which protect the cost of the financial debt were only effective in the last months of the financial year.
4/ Net profit
Group net profit stood at 51.8 million euros after deduction of 23.9 million euros in taxes. Over and above the non-recurring effect of the change in the method of inventory valuation, group net profit benefited from the equity-method consolidation of Aliments Carrière's profits to the extent of our minority stake in the company, i.e., 3.9 million euros.
At the General Meeting of Shareholders scheduled to be held on December 6th, 2007 in Villeneuve d’Ascq, the Executive Board will propose the distribution of a dividend of 1.35 euros per share (up 8%).
5/ Prospects
The worldwide increase in crop prices, due to various factors such as reforms in the Common Agricultural Policy (CAP), the significant increase in the global demand for agricultural produce, the explosion in the use of farmland for non-food crop production (biofuels) and the low levels of cereal stocks, has created a climate marked by a high degree of uncertainty.
Our performance in FY 2007 – 2008, and in the years to come, will depend on our ability to effectively translate this inflationary pressure through to our retail prices.
However, the incorporation of Aliments Carrière, as of July 1st, 2007, is expected to have a markedly positive effect on the Group's sales and results in FY 2007 - 2008, and, in the coming years, to contribute favourably to the Group's development in North America.