Aug 7 - At June 30th, 2008, consolidated turnover stood at 1,490.1 million euros, as opposed to 1,252.9 million euros in the previous financial year.
The 18.9% increase in turnover was driven in large part by the North American acquisition closed in July 2007, but also reflects the Group's ability to sustain its position despite a marked slow-down in consumption in the European Union in Q4.
EU zone
Sales within the European Union were heavily penalised in the last quarter by the loss in bagged salad production in Italy following the fire at a production facility in February. A new site was brought on stream in July 2008, and service to customers is now fully restored.
In a consumer climate which was far from favourable in spring (weather conditions, purchasing power crisis,...), the Group has been able to capitalize upon its presence in the category of basic food items, whether through national brands or private labels, or through classic channels or discount channels.
Non-EU zone
With the consolidation of the Canadian company, Aliments Carrière, as of the start of the financial year, the non-EU zone now accounts for 22 % of the Group's sales. On a like-for-like basis, sales in this zone have slowed, impacted as they were by the final stages of preparation for the introduction of new supply conditions for the Russian market (direct importation). The new conditions, effective since July 1, 2008, are expected to provide a sound footing for strong internal growth in the new financial year, and for greater effectiveness in dealing with brand infringement in this country.
Sales within the non-EU zone were also penalized by fluctuations in the U.S. dollar exchange rate, despite the hedging options adopted by the Group. Changes implemented since July 1, 2008 will significantly reduce the exposure of the Group to Euro/US Dollar exchange-rate fluctuations.
Breakdown of turnover by processing technology
Canned-vegetable sales were very positively impacted by the incorporation of the Canadian producer, Aliments Carrière. On a like-for-like basis, annual sales in this sector rose by 1.6 %, despite the decline (-6 %) recorded in the last quarter, largely attributable to the cutback in Russian importers' stocks (see above).
Growth in frozen vegetable sales was also very positively impacted by the incorporation of the Canadian company. On a like-for-like basis, frozen-vegetable sales increased by 2.2 %, both annually and in the last quarter, reflecting the successful performance of several new products (e.g., leaf spinach, Famili Balls, Famili Rondo, Déli Dômes, ...).
Annual chilled-vegetable sales remained stable. Fourth-quarter sales, down 5.7%, were penalized by unfavourable spring-time weather conditions and especially by the fire at the Italian plant (see above).
Prospects
The slow-down in sales observed in the last quarter is not expected to have a significant impact on the Group's profit objectives for the financial year (announced growth: + 35 % of Operating profit on ordinary activities), particularly as the substantial loss in sales resulting from fire in Italy was covered by the Group's insurance policies.
In light of the price increases accepted by customers to compensate for the increase in prices of agricultural raw materials, the Group's strong presence through customer brands and in discount channels (currently showing strong growth), the restoration of service to salad customers in Italy, the start-up of direct importation in Russia in July, and the successful launch of several innovative products, the Group expects to return to a situation of strong internal growth in the new financial year.
Lastly, the combined effect of the Group's sound financial structure, the re-classification of practically all of its long-term debt (private placements of 12-year bonds with American insurance companies in 2000 and 2004, and the issuing of 7-year OBSAAR-type bonds in July 2007) and the maintaining of unused, medium-term credit lines neutralize the Group's exposure to the current "credit crunch", and places it in a position to seize any opportunities arising out of the current environment.