26 October 2006 Ágúst Gudmundsson, Chief Executive Officer BAKKAVÖR GROUP S Q3 RESULTS

Transcription

1 26 October 2006 Ágúst Gudmundsson, Chief Executive Officer BAKKAVÖR GROUP S Q3 RESULTS

2 Agenda 1 Financial Results Q Operational Review

3 Financial Highlights Q Operating profit (EBIT) 32.0 million up 53% Sales million with 9.6% growth in underlying business EBITDA 40.4 million and EBITDA ratio 12.1% EBITDA ratio, net of agency sales change 13.2% Pro-forma EBITDA up 12% Shareholders earnings 15.0 million up 70% Cash generated from operations 61.1 million up 239% Free cash generated by operating activities 40.7 million up 814% Return on equity 30.4% compared with 32.3% in Q3 2005

4 Consolidated Income Statement Q Amounts in 000 Q Q Change % Net sales 332, ,907 37% Cost of sales -244, ,033 43% Gross profit 88,509 72,874 21% Operating expenses -56,266-51,155 10% Share of loss in associates % Operating profit (EBIT) 32,035 20,935 53% Net finance costs -13,922-9,294 50% Profit before tax 18,113 11,641 56% Income tax -2,866-2,724 5% Profit for the period 15,247 8,917 71%

5 Financial Highlights 9M 2006 Operating profit (EBIT) 83.3 million up 82% Sales million with 9.9% growth in underlying business EBITDA million and EBITDA ratio 12.2% EBITDA ratio, net of agency sales change 12.6% Pro-forma EBITDA up 21% Shareholders earnings 34.9 million up 68% Cash generated from operations million up 184% Free cash generated by operating activities 69.7 million up 291% Return on equity 28.2% compared with 28.3% in 9M 2005 Equity increased by 80.4 million up 63% from year-end 2005

6 Consolidated Income Statement 9M 2006 Amounts in 000 9M M 2005 Change % Net sales 890, ,895 89% Cost of sales -653, ,922 96% Gross profit 236, ,973 72% Operating expenses -152,093-91,534 66% Share of profit (loss) in associates % Operating profit (EBIT) 83,282 45,792 82% Net finance costs -37,262-18, % Profit before tax 46,020 27,287 69% Income tax -10,523-6,241 69% Profit for the period 35,497 21,046 69%

7 EBIT by Quarters GBP millions ,8 32, ,9 20, ,5 17, ,1 4,2 7,1 4,6 5,5 4,4 6,5 5,4 7,9 0 Q1 Q2 Q3 Q4

8 EBITDA / EBITDA Ratio GBP millions 45 EBITDA EBITDA ratio EBITDA ratio* 25% % % % % 0 3Q Q Q Q Q % * net of agency sales change in Q3

9 Consolidated Balance Sheet 9M 2006 Amounts in Change % Non-current assets 1,001, ,400 19% Current assets 260, ,207-11% Total assets 1,261,947 1,134,607 11% Equity 207, ,352 63% Non-current liabilities 739, ,223 5% Current liabilities 314, ,032 4% Total equity and liabilities 1,261,947 1,134,607 11%

10 Key Cash Flow Figures 9M 2006 Amounts in 000 Key figures 9M M 2005 Change % Cash from operations 123,217 43, % Cash flow from operating activities 95,002 28, % Working capital 82,800 36, % Property, plant and equipment 25,347 10, % Free cash generated by operating activities 69,655 17, %

11 Key Ratios 9M M Quick ratio Current ratio Equity ratio 16.5% 12.4% 37.1% 41.0% EBITDA ratio 12.2% 11.9% 18.7% 16.3% EBITDA ratio, net of agency sales change 12.6% 11.9% 18.7% 16.3% EBIT ratio 9.4% 9.2% 16.1% 13.3% EBIT ratio, net of agency sales change 9.7% 9.2% 16.1% 13.3% Return on equity 28.2% 30.0% 16.4% 20.7% Earnings per share (GBP pence)

12 Market Predictions Q Forecast million Glitnir LAIS Kaupthing Forecast Average BVGR Actual Operating income Growth 30% 27% 34% 30% 37% Expenses EBITDA EBITDA ratio 12.8% 11.3% 12.0% 12.1% 12.1% EBIT Profit for the period

13 Agenda 1 Financial Results Q Operational Review

14 Operational Review 9M 2006 UK 92% of Group s pro-forma sales Performance strong, with growth ahead of total food and fresh prepared foods sector Sales split between hot and cold eating 51:49 Trading environment under pressure from rising utility bills, tuition fees and higher interest rate Food prices gradually increasing Warm weather in July and September heightened trend for lighter meals Successful new product development in fresher, naturally healthy and lighter meals strengthened sales Acquisitions of New Primebake and Laurens Patisseries strengthed Group s position in the market Continental Europe Asia 8% of Group s pro-forma sales Performance improving significantly with sales up 27% Combined sales in French & Spanish businesses continued to accelerate Sales decline in Belgium ready meals business as expected due to range rationalisation Creative Foods in China performing in line with management expectation Creative Foods customers expanding and performing well Fast economic growth, social developments and lifestyle trends offer extensive opportunities in the Asian markets

15 Market Growth Bakkavör Group sales grew ahead of market growth first nine months % Growth 10% Bakkavör Group sales growth 9M 2006 Market growth 9M ,7% 8% 6% 5,8% 6,4% 4% 3,0% 2,9% 2% 0% -2% -4% Total food Fresh produce Fresh prepared foods Frozen prepared foods Frozen prepared foods -2,6% Source: TNS Monthly RST Summary 36 weeks ending 10 Sept 2006

16 Bakkavör Shares by Product Category Bakkavör Group market leader in 9 of 17 categories Hot eating Cold eating Bakkavör Largest Competitor to Bakkavor Others Bakkavör Largest Competitor to Bakkavor Others Ready Meals Ready to Cook Pizza Prep Veg Pasta Speciality Bread Soups Sauces Stir Fry 0% 20% 40% 60% 80% 100% Desserts Leafy Salads Convenience salads Prep Fruit Dips Wraps Dressings 0% 20% 40% 60% 80% 100% Source: Bakkavör market intelligence based on a proforma basis 52 weeks ending September RSV figures.

17 Summary and Future Prospects Strong Q3 and 9M performance, reflecting the Group s leading position in the market with strong growth in the UK and profitable performance in Continental Europe EBITDA ratio, net of agency sales change is 13.2% in Q3 and 12.6% in 9M. Long term goal of EBITDA ratio remains 12-14% for the time being Insurance claim in relation to fire in 2005 still progressing re-imbursement expected to be around 20 million Launch of new corporate logo reflects the successful integration of the Group all operational units brought under the Bakkavör Group name

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19 Disclaimer This material has been prepared for the professional investor. Bakkavör Group hf. (Bakkavör) has not taken into account any shareholder investment objectives, financial resources or other relevant circumstances. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments and, in international transactions, currency risk. Due care and attention has been used in the preparation of this forecast information. However, actual results may vary from their forecasts, and any variation may be materially positive or negative. Forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of Bakkavör. Bakkavör cannot guarantee that the information contained herein is without fault or entirely accurate. The information in this material is based on sources that Bakkavör believes to be reliable. Bakkavör cannot however guarantee that all information is correct. Furthermore, information and opinions may change without notice. Bakkavör is under no obligation to make amendments or changes to this publication if errors are found or opinions or information change. Bakkavör accepts no responsibility for the accuracy of its sources. Bakkavör is the owner of all works of authorship including, but not limited to, all design, text, sound recordings, images and trademarks in this material unless otherwise explicitly stated. The use of Bakkavör s material, work or trademarks is forbidden without written consent except were otherwise expressly stated. Furthermore, it is prohibited to publish material made or gathered by Bakkavör without written consent.