Dutch food group Wessanen has posted full-year revenues of EUR1.59bn (US$2.10bn), down 5% from the previous year at exchange constant rates.
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Fourth-quarter operating profit before amortisation and exceptional items (EBITAE) increased by 3.6% to EUR20.2m with sales down by 8.7% at EUR407.8m (4.2% down at constant exchange rates).
Full-year EBIT rose by 70% to EUR 42.2m. The company said that the proceeds of divestment of its private label activities will be used for selective investments and a EUR50m share buyback programme.
Ad Veenhof, Wessanen CEO, said: “The profit margin of all four business units improved compared to Q4-05 because of a better portfolio mix and good cost control. Top-line development was somewhat lower than expectation for Branded Europe and Distribution North America. Branded Europe continued the growth of Q3-06, but the end of December softened.” However, he added that January 2007 had showed a clear growth trend for the branded European business.
Veenhof also said that the company’s branded North American business had done well, despite a negative effect of terminated sole agent business. But Veenhof said that that would be more than compensated by growth of the company’s brands from the second quarter of 2007 onwards.
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By GlobalData“With the pipeline of new products and additional listings we expect 2007 will show enough growth in Branded Europe and North America to reach the target growth level end 2007 (running rate) of 5-7%,” Veenhof added. “All in all, 2006 has been more a transition year in which we accelerated innovations in both our branded portfolio and distribution services, kept healthy gross margins and good cost control, strengthened internal processes, published our first sustainability report, converted certificates to ordinary shares and divested our private label business.”
