Miko Half-Yearly Results to 30 June 2008: Turnover + 13 % – Operating Cash Flow + 7 %

Turnhout, 28 August 2008 – Miko, Eurolist by Euronext Brussels listed specialist in coffee service and plastic packaging, posted in the first six months of 2008 an increase of its turnover and operating cash flow by 13 % and 7 % respectively. Its operating profit and net profit dropped by 5 % and 12 % respectively, mainly as a result of the measures involved in turning around Grispa and the continuing fall of the value of sterling.

TURNOVER 

The consolidated turnover grew to EUR 60.49 million in the first half of 2008, marking a rise of 12.8 % on the same period last year. In terms of group turnover, the coffee service and plastic packaging business units accounted for 45 % and 55 % respectively of this turnover, with roughly 73 % of it being generated abroad. 

The coffee service business’s turnover rose by 1.2 %. This limited growth is largely a consequence of the negative trend in the exchange rate for sterling, which has fallen by 13 % in relation to the euro in a year. Both internal and external growth helped maintain a positive turnover trend. The coffee service business units in Belgium, the Netherlands and France achieved growth of 2 %, 6 % and 12 % respectively. There were also contributions to this rise from the takeovers of Coffee4U and Chester Coffee Services in the UK, as well as the takeover of Miko Coffee in Australia. 

Plastic packaging grew by 24 %. This increase was certainly boosted by the takeover and additional turnover of the plastics manufacturing company Grispa, based in Houthalen, Belgium. But the subsidiaries in Belgium and Poland also managed to achieve internal growth, not in the least through the launch – during the second quarter – of a major project involving the production of margarine tubs.

RESULTS (excluding minority interests) 

The group’s operating cash flow showed an increase of 6.9 % to EUR 8.4 million. The operating profit fell by 5.4 % to EUR 4.5 million, while the net profit also decreased by 12.2 % to EUR 3.1 million. 

Under the IFRS criteria, the operating cash flow for the coffee service business decreased by 0.7 % to EUR 3.5 million, whereas the operating profit dropped by 7.8 % to EUR 2.0 million. As was already mentioned in the prospects for 2008, the significant drop in sterling’s exchange rate against the euro was the main reason for the poor progression in terms of results. In addition, the rise in coffee prices in the first quarter was not passed on completely. 

The plastic packaging business’s operating profit fell by 5.2 % to EUR 2.6 million. The reason for this drop is the pressure on margins as a result of rising oil prices, given that oil is the key raw material for plastics production, not to mention the takeover of the loss-making company Grispa, whose business Miko is currently involved in turning around, a process which is running according to plan.

The plastic packaging business’s operating cash flow increased by 10.8 % to EUR 5.0 million. This rise is linked to the heavy investment programme for the margarine tubs project. 

KEY EVENTS 

In January, Miko took over the coffee service operator Coffee4U, based in Cambridge. Thanks to its new fairtrade Puro coffee, Miko landed major coffee contracts in this university city from a number of the university’s colleges (including the world-famous King’s College). For logistical reasons, it was therefore strategically important to set up an operational base in this area. 

In February, Miko took over the plastics manufacturing company Grispa, whose business Miko is currently involved in turning around using its expertise, a process which is running according to plan. The purpose of this takeover is to enable Miko now to handle smaller, “customised” projects too and not just the large-scale projects which it traditionally focuses on. 

In May, Miko announced the takeover of the UK company Chester Coffee Services. With this takeover, Miko Coffee North West Ltd, its subsidiary based in Manchester, has doubled its turnover. Now that Miko is well represented in southern England, the strategic focus is aimed at the north. An investment in growth will be seen here in the next few years.

In June, Miko acquired 51 % of the shares in Miko Coffee Australia, marking the first step in a takeover outside Europe. Although it might be very remote geographically, Australia is a great deal closer than many European countries in terms of drinking habits and market opportunities. It is after all saturated by Anglo-Saxon culture, which Miko has got to know very well through its operations in England.  

PROSPECTS FOR THE SECOND HALF OF 2008 

Throughout the whole financial year, the results will remain exposed to the continuing volatility of the raw materials markets, the weakness of sterling and high inflation. 

MIKO GROUP CONSOLIDATED HALF-YEARLY RESULTS (IN THOUSAND EUR)

(*) The concepts EBITDA and EBIT are used in the sense indicated in our 2007 annual report.

These half-yearly figures are not subjected to the auditing activities of our auditor.

The financial partner which provides financial services to the Miko group is KBC-Bank.

ABOUT MIKO

Miko has been active in coffee service for over 200 years and in plastic packaging for some 30 years now, and was floated on Eurolist by Euronext Brussels in 1998. Miko follows a “two-pillar strategy” in which its core activities – coffee service and plastic packaging – are practically independent entities each with its own management, so that each activity can follow its own growth path. The group employs 617 people and achieved a turnover of EUR 98.4 million in 2007. The plastic packaging division accounted for 45 % of this total. The remaining 55 % was provided by the coffee service division. It is an international group which owns companies in Belgium, France, the Netherlands, Britain, Germany, Poland, the Czech Republic, Slovakia and Australia.