EBRO PULEVA NET PROFIT UP 33%
TO OVER 37 EURO MILLION
– Net turnover increased by 36.1% to over 650 euro million
– Investment in advertising rose by 84% to 17.5 euro million
– The EBITDA grew by 11.6% to 67 euro million
Madrid, 24 April 2006. The Ebro Puleva Group posted a net profit of 37.6 euro million in the first three months of 2006, 33% more than the same period of 2005. Its net turnover totalled 650 euro million, up 36% year on year.
The EBITDA, or gross operating profit, also recorded a significant growth of 11.6%, to 67 euro million. Its brand commitment led the Group to increase its investments in advertising by 84% to 17.5 euro million.
Beginning of a new growth phase
Ebro Puleva¿s consolidated results are consistent with the corporate strategy it has developed over recent years, with which it has managed to maintain a profitable, sustained growth and cope successfully with the effects of the CMO Sugar and Rice reforms. The growth in profit indicates that the rates of return of the overall business have improved considerably.
With the strong cash flow generation, the favourable evolution of the Group¿s debt has continued. Although this is traditionally a quarter of heavy debt, due to the effect of the crop campaigns, Ebro Puleva¿s debt rose by only 2% in the first three months of this year, compared to 9% in the same period of last year. Shareholders¿ Funds grew by 3% to 1,100 euro million, reducing leverage by 60 basis points from year-end 2005.
In the last few months Ebro Puleva has confirmed the strength, credibility and consistency of its business model. The integration of the new companies acquired has been completed successfully and a new era now begins, in which the Group will resume its search for growth, both organic and inorganic, branching out into new territories and making new acquisitions to boost its four core businesses, firmly dedicated to emerging sectors and sectors of interest. It has already begun this expansion with the incorporation of its new company dosbio 2010.
Results of core businesses
The first quarter earnings of the sugar division were dented by the drop in prices, which continues to afflict the European sugar market, the higher energy prices and increased costs (3.5 euro million) incurred in the reforms undertaken in the company¿s production plants to meet the challenges of the new CMO. Its EBITDA is consequently 20.2% lower than last year. On the other hand, however, the sharp rise in international prices means we will be able to export with a reasonable profit level.
The rice division is progressing well thanks to the good performance of its brands. In this context, investment in advertising was stepped up by 2.3 euro million year on year. The efforts made in the innovation of products with a high value added are paying off, with a 53% growth in sales of microwave rice-in-a-cup.
Sales grew by 4%, giving a total turnover of 195.7 euro million. However, owing to other factors, such as the higher price of the raw material and increased energy cost (up 20% year on year in Europe), the division¿s EBITDA dropped 11.2%.
The development of this division was positive during the period. Its strategy of market niche segmentation and the broadening-out into child nutrition has led to a 71.5% growth in nutritional milks in the new MAX range and 66% in the range of infant milks.
The effects of the industrial optimisation plan carried out in 2005 came to light during this first quarter. Despite a 2.3% decline in turnover, due to the sale of the Leyma brand, the divisions EBITDA grew by 6% to 14 euro million.
Panzani has come up to all expectations. Despite the entry into force of the new Jacob Act, the sluggish demand and deflation appear to be coming to an end. During the first quarter, the company recorded a turnover of 110 euro million and an EBITDA of 15.8 euro million.
Ebro Puleva (www.ebropuleva.com) is the leading Group in the Spanish food sector in terms of turnover, profits, market capitalisation and international presence. Ebro Puleva is world leader in the rice sector, the leading sugar group in Spain, leader in the marketing of dairy products in Spain and the second group in Europe in the pasta sector. It has leading brand names in each of these sectors, including: Puleva®, Ram®, Leyma® and El Castillo® in the dairy sector; Azucarera® and Sucran® in the sugar sectorcar; Brillante®, Nomen®, La Cigala®, La Fallera®, Oryza®, Bosto®, Reis-Fit®, Riceland®, Danrice®, Risella®, Mahatma®, Sucess®, Carolina®, Lustucru® and Taureau Ailé® in the rice sector; Pozuelo®, Kern® and Ducal® in biscuits, sauces and fruit juices in Central America; and Panzani® in pasta.