Royal Numico NV, Europe’s top manufacturer of infant milks and formulas and weaning foods, has posted a 13.6% rise in first quarter sales to a record EUR633m (US$800.1m). Net profit rose from EUR44m last year to EUR63m, ahead of analysts’ forecasts which had been for net profit in the range of EUR51m to EUR61m.
The company said that organic sales growth was also running at 13.6%, while EBITA margin had reached a record high of 19.2%.
All three divisions delivered double-digit organic sales growth, the company said, driven primarily by volume increases.
The company said it was particularly encouraged by the very strong performance of its Dumex subsidiary, which became part of the Numico group in early-2006. Dumex recorded sales growth of 28.3%, with margins at 19.4%.
Royal Numico said the integration of Dumex was nearly complete, having been executed more rapidly than anticipated. The integration and optimisation of the continued operations have been finalised and the Hangzhou cereals plant in China has been sold, the company said. Meanwhile, the operations in the Philippines and the Cow & Gate operation in China are also being closed and a decision on India will be announced before the end of the second quarter of 2006. The various efficiency initiatives are well on track to generate the anticipated annualised cost savings of EUR5m, Numico added.
Nutricia Baby Food generated sales growth of 12% at healthy margins of above 19%. The company said growth in the baby food division had stemmed from a strong performance in all regions. Contributing to this, Mellin advanced well, with volume growth of 14% and value growth of 9%. The integration of Mellin will be completed upon the insourcing of Mellin’s IMF production, which takes place in the second quarter of 2006, with confirmation of anticipated cost savings.
Nutricia Clinical continued its solid performance with sales growth of 11.2% and margins at 26%.
Based on the strong start to the year and the expected performance for the remainder of 2006, Royal Numico has raised its total sales growth target for the year to between 12% and 13%, from the previous range of 11% to 13%. The company also said it expects EBITA margin to improve by 25 bps to 18.75% for the year.