NETHERLANDS: Annual losses widen at Wessanen
- Net loss widens to EUR53.2m
- Operating losses increase to EUR45.8m
- Net sales up 0.7%
CEO Piet Hein Merckens said 2012 was a “turbulent” year for the global economy
Dutch organic food group Wessanen has widened its net loss in fiscal 2012 due to impairments and restructuring charges.
In the 12 month period, net losses widened to EUR53.2m (US$70.1m) from EUR17.1m a year earlier, it said today (22 February). Operating losses also increase to EUR45.8m from losses of EUR19m a year earlier.
CEO Piet Hein Merckens said 2012 was a "turbulent" year for the global economy.
"The Eurozone in particular witnessed much instability while low consumer confidence led to sluggish demand. The organic food market seemed almost untouched by these conditions, trending positively with mid-single digit growth."
Despite this, net sales were up 0.7% to EUR710.8m.
- Grocery operations continue to perform well
- Creation of IZICO, integrating our frozen food business
- Execution of reorganisation progressing well
2012 was a turbulent year for the global economy. The Eurozone in particular witnessed much instability while low consumer confidence led to sluggish demand. The organic food market seemed almost untouched by these conditions, trending positively with mid-single digit growth.
2012 could be characterised as a challenging year for Wessanen as well. It was the first year of executing our three-year strategic objectives: managing topline growth, profitability improvement and enablers. We have made clear progress in numerous areas, however not all of our initiatives have resulted in the desired outcome. Consequently, we have launched a transformation process - Wessanen 2015 - to improve our focus and substantially reduce complexity.
The grocery channel was once again the driving force behind the growth of organic food. We achieved 4.6% organic growth in this channel with our core categories and brands in 2012. In the fourth quarter we realised 6.9% autonomous growth. Newly acquired Clipper showed a strong performance as well, posting 11% growth versus last year. The health food stores channel only grew modestly. Our HFS performance was disappointing, particularly due to our wholesale and distribution activities.
At Frozen Foods we are integrating under new leadership both businesses into one stronger company, newly named IZICO. A sharpened, focussed strategy will establish IZICO as a more profitable business by the end of 2013.
ABC capitalised on improvements in the previous years, leading to ongoing autonomous revenue growth. Daily's maintained its leading position in the attractive ready-to-drink cocktails market thanks to strong advertising campaigns across diverse media channels, innovations and an increase in distribution. Postponing the divestment process was a setback. After a comprehensive process to divest ABC, we had to conclude that the bids received did not adequately reflect ABC's fundamental value, resulting in the decision to postpone the sale in December.
Although Wessanen realised 0.7% autonomous growth in 2012, we had to report a full year net loss of €53 million, driven by the weakened performance in parts of our business, costs incurred for our transformational programme and impairment losses at Allos, Kallo, Tartex and IZICO.
To make Wessanen more profitable, we are conducting a transformation to realise cost savings and be a more consumer- and customer-led company. By becoming more agile, more focussed, less complex and more efficient, Wessanen should be growing profitably in all business segments in the near future.
I fully acknowledge the consequences this reorganisation will have for many of our colleagues, who will be leaving. I am grateful for their considerable contributions in building our businesses.
Whilst 2013 will be another challenging year, I am confident that with the dedication and commitment of our people we will be able to further boost the sustainable growth and long term value for all stakeholders.
Original source: Wessanen
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