Madrid, 31 October 2007. The turnover of the Ebro Puleva Group reached a level of 1955 million euro in the first nine months of 2007, 8.3% up on the same period of 2006.
The Group also achieved growth in its operating figures, with a 3% growth in EBITDA or Gross Operating Profit to 215 million euro, after investing 65 million euro in advertising, 19% more than last year. The EBIT or Operating Profit was up 3.4% to 146 million euro.
Results of core businesses
The sugar division has been largely affected by the negotiations of the CMO sugar reform, which have put pressure on prices and caused havoc among European operators struggling to secure a competitive position on the market. Consequently, the division turnover now stands at 486.9 million euro, 8.83% down on last year, with EBITDA at 56 million euro. As the European sugar horizon clears, we foresee a more stable situation in forthcoming years.
Reaping the harvest of the diversification of supplies undertaken last year and the heavy investment in advertising to strengthen our brands, the rice division has posted its highest ever EBITDA, up 42% year on year to 65 million euro. The division turnover has risen 13.7% to 576 million euro.
Our American business, consisting of Minute and Riviana, has made a valuable contribution to this success and maintains its impressive progress within the Group, increasing its turnover by 14% and its EBITDA by 67% year on year.
The soaring raw material prices and the timing difference in passing these rises onto the retail price weighed heavily on second brands in the third quarter, dampening the positive trend that had been marked in some of the categories of Puleva. Once these price rises have been fully passed on to the end product, in four phases, and balance is restored in the price situation, profit margins should return to normal in the fourth quarter. The division has a 10% EBITDA/Sales margin.
This division, suffering hikes of up to 300%, is the hardest hit by the steep rise in raw material prices. Although the first effects were felt back in June, the lion¿s share of the price rise was concentrated in August and September and will affect the fourth quarter results, especially in the North American business, owing to the peculiarities of the US durum wheat market. Against this backdrop, the pasta division continues to prove its worth as a solid business line in the Group. Bolstered by the launching of new products and a sound advertising strategy, it has increased its EBITDA by 3.5% to 62 million euro, with a 538.5 million euro turnover.
Projections to 31 December 2007
Ebro Puleva predicts a turnover of 2,705 million euro for 2007, which would be a year-on-year-growth of 10.3%. An EBITDA of 299 million euro is expected, 2.2% down on 2006, with EBIT at 200 million euro, 5.4% less than that recorded at the same time last year. The estimates made by Ebro Puleva point to a Net Profit of 90 million euro in 2007. In this regard, it should be borne in mind that the 2006 results included the effect of selling off our businesses in Central America, which contributed EUR 60m to the Net Profit.
Our soundness and stability give us an extraordinary vantage point for the future
The consolidated results of the first nine months of the year confirm the efficiency of the Group¿s strategic commitment. In a scenario marked by tremendous price hikes of raw materials in the dairy and pasta divisions, the company has maintained its lines of strategic action, providing firm backing for brand development through heavy investment in advertising and the constant launching of new products in Spain and North America. Even against this difficult backdrop, Ebro Puleva has managed to strengthen its leading position in all the sectors in which it operates and to increase its profitability ratios, revealing the soundness of its different variables. All these factors, together with the first signs of light in the new scenario of the sugar division give the Group a clear, visible, sound, well-defined projection for the future.