1st Quarter Report and Presentation May 2001 The East Asiatic Company Ltd. A/S The East Asiatic Company Ltd. A/S
Agenda Results and Highlights for 1st Quarter 2001 EAC s Four Strategic Businesses Outlook for 2001
Continued strong performance Net sales in strategic businesses, +22% compared to same period last year. Operating result, strategic businesses, +45% compared to same period last year. After adjusting for the non-recurring items, operating result of underlying operations grew 51% to DKK 110m Result before tax is a profit of DKK 181m, against DKK 72m same period last year
Highlights and Restructuring Disposed 4% portfolio shareholding in a Chinese company, net gain of DKK 75m included under financing. The Danish Companies Appeals Board (Erhvervsankenævnet) rules in favour of EAC in pension case. Change in accounting policy following the implementation of deferred tax accounting in Danish GAAP (Regnskabsvejledning 14) Increased shareholding in Dumex Malaysia and investment in land and warehousing to cater for future expansion.
1st Quarter Profit and Loss Account Q1 Full Year DKK million 2001 2000 2000 Net sales 1,843 1,987 7,768 Operating result 120 113 683 Financial expenses, net 61-41 -93 Result of ordinary activities before tax 181 72 590 Minority interests 15 12 44 EAC s share of net result 125 28 414
Strategic Businesses, Growth Net Sales by Industry Segments: 1st Quarter DKK million 2001 2000 2001/00 Nutrition 496 409 +21% Foods 466 377 +24% Industrial Ingredients 140 133 +5% Moving and Relocation 90 60 +50% Subtotal 1,192 979 +22% Other activities 647 369 +75% Disposed businesses 4 639 Total 1,843 1,987-7%
Net Sales by Segments Industrial Ingredients 12% Foods 39% Moving & Relocation Services 8% Strategic Businesses Only Nutrition 41%
Profitable Growth Operating Result by Industry Segments: 1st Quarter DKK million 2001 2000 2001/00 Nutrition 66 56 +18% Foods 30 9 +233% Industrial Ingredients 16 16 0% Moving and Relocation 8 2 +300% Subtotal 120 83 +45% Other, net 0 30 Total Operating Result 120 113 +6%
Operating Result by Segments Moving & Relocation Services 7% Industrial Ingredients 13% Foods 25% Nutrition 55%
Profitable Growth Operating Result for the Group: 1st Quarter DKK million 2001 2000 2001/00 Result of underlying operations 110 73 +51% Items not directly related to the recurring operations, net 10 40 Total operating result 120 113 +6%
Reduced Financing Expenses Financing net: 1st Quarter DKK million 2001 2000 2001/00 Financing expenses, net -14-41 +66% Income from sale of financial assets 75 Financing, net 61-41
Deferred Tax - P&L Effect of change in accounting principle: 1st Quarter DKK million 2001 2000 2001/00 Result of ordinary activities 181 72 +151% Income tax 22 31 Deferred tax adjustment 19 1 Total tax 41 32 +28% Result after tax of ordinary activities 140 40 +250%
Deferred Tax - Balance Sheet Effect of change in accounting principle: 1st Quarter DKK million 2001 2000 2001/00 Total assets 5,467 4,984 +10% - Deferred tax asset 176 204-14% After change 5,643 5,188 +9% Total shareholders equity 2,556 2,017 +27% - Deferred tax effect 164 195-16% After change 2,720 2,212 +23%
Balance Sheet Key Figures 6,000 5,000 DKK million 4,000 3,000 2,000 1,000 0 Total Assets +23% Group Equity +28% EAC's Share of Equity Net Interest Bearing Debt, Year End Q1/2000 Q1/2001
Ratios Improved Profit & Loss Ratio: 1st Quarter 2001 2000 2001/00 Operating margin 6.0% 3.7% +2.3% Balance Sheet Ratio: DKK million Total assets 5,643 5,188 +9% Total equity 2,720 2,212 +23% Equity ratio 48% 43%
EAC s Four Strategic Businesses N utrition Foods In dustri al In gredie nt s Mo ving & Re locat ion Servic es
EAC Nutrition EAC Nutrition develops, produces and markets infant and child nutrition products in Asia EAC Nutrition is a market leader EAC s own brand: Dumex Sub-brands: Mamex, Mamil, Protimex
EAC Nutrition
Continued High Growth Key Figures: 1st Quarter DKK million 2001 2000 2001/00 Net sales 496 409 +21% Operating result 66 56 +18% Operating margin 13.3% 13.7%
Highlights Sales up 21% in DKK, vs. 1st quarter 2000 and 20% vs. 4th quarter 2000. Sales growth particular strong in China, +36% compared to same period last year. Stronger pressure from competitors, especially in Thailand. Improved margin a result of better product mix and forward milk powder purchasing. Completion of the acquisition of additional 20% shareholding in Dumex Malaysia.
Outlook for Year 2001 EAC Nutrition expects double digit growth in sales. Growth driven by expansion in China/ Philippines and new product launches in Malaysia and Thailand. Operating margins expected to be similar to last year (10.5%).
EAC Foods A strong No. 1 manufacturer and distributor of processed meat products in Venezuela and Ecuador Plumrose in Venezuela accounts for 96% of group sales Key brands: Plumrose and Oscar Mayer Fifth largest food company in Venezuela
EAC Foods We produce approx. 560.000 sausage packages per week
Strong performance Key Figures: 1st Quarter DKK million 2001 2000 2001/00 Net sales 466 377 +24% Operating result 30 9 +233% Operating margin 6.4% 2.4%
Highlights Sales in 1st quarter were 24% above same period last year driven by new product launches. Operating margin significant higher by continued improvement in operating efficiency. Improved economies in Venezuela and Ecuador. New central warehouse in Cagua now in operation - expected to generate significant savings in distribution costs.
Outlook for Year 2001 Venezuelan and Ecuadorian economies expected to continue recovery. Continue aggressive new product launch strategy - sales improvement at least 10%. Higher operating margin due to improved operating efficiencies. Quality and cost/efficiency improvements with a full year of service from pig farm Profits well ahead of 2000 anticipated.
EAC Industrial Ingredients Leading independent distributor of industrial ingredients in Thailand and Vietnam Growing presence in other major markets of Southeast Asia Production Joint Ventures in Thailand
Sales up 20% in local currency Key Figures: 1st Quarter DKK million 2001 2000 2001/00 Net sales 140 133 +5% Operating result 16 16 0% Operating margin 11.4% 12.0%
Highlights Sales growth measured in local currency is 20% ahead of same period last year. Higher competitive pressure resulted in slightly lower operating margin Results from joint ventures better than last year despite continued weak agricultural sector
Outlook for Year 2001 Economic outlook influenced by industrial activity in main markets Thailand distribution; increased sales, but pressure on margins - expansion of supplier-base Regional distribution; continuing strengthening in Vietnam and Philippines - expand regional representation Joint Ventures; opportunities to divest minority shareholdings continue to be evaluated A satisfactory result expected, but not on par with year 2000 - possible gains from divestment of joint venture
EAC Moving & Relocation Services Key brands: Santa Fe & Global Silverhawk Leading regional player in the Asian markets for premium household goods removals, office relocations, relocation services, records management and freightforwarding services.
Premium Relocation Specialist Key Figures: 1st Quarter DKK million 2001 2000 2001/00 Net sales 90 60 +50% Operating result 8 2 +300% Operating margin 8.9% 3.3%
Moving ahead of the rest Reception by the trade of the acquisition of Global Silverhawk very positive. Increased activities in China, Hong Kong, Singapore, Malaysia and Thailand as a result of the merger. Market conditions in Indonesia and Philippines are unsettled and volumes are lower than same period last year. Economy in Japan is stagnant and activity level on par with last year.
Outlook for Year 2001 General market conditions stable Consolidation of the Global Silverhawk and Santa Fe organisations completed by 1st quarter Roll out Quality System software to all offices Sales expected to increase to around DKK 500m. Increased intra-regional activities compensate for weaker outbound market. Due to synergies, operating profit approximately 70% above year 2000 and operating margins at above 6.5%
Other Activities
Other Activities Key Figures: 1st Quarter DKK million 2001 2000 2001/00 Net sales 647 369 +75% Operating result 15 48* -69% * Including profit on divestment of property rights.
Other Activities Sales significantly increased in EAC Holdings, but at a very low margin. Technical in Japan and Nigeria - good performance; Malaysia weak. Overall on comparable basis a result under last year is expected.
The East Asiatic Company Ltd. A/S The East Asiatic Company Ltd. A/S Industrial Ingredients
Economic Growth in Key Markets 15% 10% 5% 0% -5% -10% China Hong Kong Indonesia Malaysia Philippines Singapore Thailand Venezuela 1999 2000 2001 e Source: Foreign Exchange Consensus Forecasts
Outlook 2001 EAC Nutrition expects double digit growth in sales/operating result and similar operating margins EAC Foods expect increase in sales of at least 10% and profits well ahead of year 2000 EAC Industrial Ingredients expects a satisfactory result although weaker Thai Baht may affect comparison. Positive effect from one-off. EAC Moving & Relocation expects sales increase to around DKK 500m, an operating profit approximately 70% higher than year 2000 and operating margins above 6.5%
Outlook 2001 Overall profit before tax above DKK 400m Net result from ongoing businesses expected to increase at least 25% 1) vs. 2000 (previously expected 20%) 1) Effect from accounting change for deferred tax - included in target above
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