A special dividend of Euro1,25 per share through share capital reduction and the issuance of a 10-year Convertible Bond, were approved, amongst other issues, by the Annual General Meeting of VIVARTIA?s shareholders, that took place today. The aforementioned actions are part of the Group?s strategic plan to reduce the weighted-average cost of capital and to maximize its shareholders? value.
In 2006, consolidated sales of Vivartia Group (pro forma) increased by 7,8% to 949,7 mil. Euro from 881 mil. Euro in 2005. Respectively, EBITDA reached 142,3 mil. Euro from 128,3 mil. Euro in 2005, increased by 10,9%, while net profit reached Euro 49,5 mil. from Euro32 mil. in 2005, recording a 54,7% increase. Lastly, the earnings per share were Euro0,67 from Euro0,48, increased by approximately 40%. It should be noted that the number of shares was increased in 2006 vs 2005. The above figures reflect the total of the operations for all divisions of Vivartia for the years 2005 and 2006 and are directly comparable. They reflect the accurate picture that appears after the merger and after deducting the extraordinary income received from the resolution of the Danone partnership.
The published results which are based on the date of the absorption of Chipita International S.A. from Delta Holdings S.A. are different, because they include the figures from the continuing operations of the former Delta Holdings S.A. for all of 2006, but only four (4) months of operations of the Bakery and Confectionery Division ?formerly Chipita.
Taking under account the fact that the published figures (continuing activities) are not comparable, the equivalence between 2006 and 2005 is as follows: sales of Vivartia Group were increased by 25,2% to 731,3 mil. Euro from 584,2 mil. Euro. Earnings before Interest, Taxes and Depreciation (EBITDA) for Vivartia Group reached 114,1mil. Euro from 102,9 mil. Euro, increased by 11%, while net profits increased by 35%, reaching Euro44,4 mil. compared to Euro32,9mil in 2005.
In particular, the sales and the profitability of each division for the full year ending 2006 are analyzed as follows:
- For the Dairy and Drinks Division, sales reached 374,2mil.Euro from 366,1mil.Euro in 2005, increased by 2,2% including the sales of the Vlachas brand for four and a half months, in 2006. The division?s EBITDA recorded an increase of 20,8%, to 60,5mil.Euro from 50,1mil.Euro in the equivalent period in 2005 (not including the profit recorded from the resolution of the Danone partnership).
- For the Bakery and Confectionery Division, sales for 2006 increased by 16,8% to 346,9mil.Euro from 297,0mil.Euro, attributed to further product development, new and innovative product launches and the strengthening of its market presence. On a profitability level, EBITDA reached 50,5mil.Euro from 41,0mil.Euro in 2005, increased by 23,2% not including repeated other income 3,7mil. Euro in 2005.
- he Foodservices and Entertainment Division, recorded an increase of 7% in sales, to 156,5mil.Euro from 146,3mil.Euro the same period in 2005, as a result of the improvement in sales of the Flocafe shops. EBITDA reached 24,4mil.Euro from 23,9mil.Euro, increased by 2,1%.
- For the Frozen Foods division, sales increased by 6,3% to 73,4mil.Euro from 69,1mil. Euro, due to the increase in the core business (frozen vegetables), the launch of new products (tomato) and the introduction of fresh salads. On a profitability level, the significant improvement in costs resulted in an 18% increase in EBITDA which reached 16,2mil.Euro from 13,7mil.Euro in 2005.
These results show that the Group?s targets for profitable growth and the increase in the free cash flow -that reached 72 mil.Euro in 2006 from 41 mil.Euro in 2005-, have been successfully met. The strong financial position of the Group today, is shown through the Net Debt to EBITDA and Net Debt to Shareholders Equity ratios standing at 2,3:1 and 0,5:1respectively in 2006.
Taking into consideration the Group?s above strong capital structure and the future cash flows combined with the future profitability that will result to the decrease in the leverage, there will be funds available of at least 400mil.Euro. These funds will be used for potential buyouts in Southeast Europe, with the purpose to further reinforce the organic development of Vivartia in the next three years, as well as achieve the target of reducing the weighted average cost of capital and increasing the economic value added (EVA).
VIVARTIA Group under its new structure, can now realise additional significant opportunities for business development in new geographical areas and new product markets while enjoying the synergies achieved through the merger. These two factors will contribute to the further enhancement of its profitable growth. It is expected that during the next three years, sales will increase at an average annual growth rate of 8% thus exceeding 1,1 billion Euro in 2009, EBITDA will increase at an average annual growth rate of 14% exceeding 200mil.Euro in 2009, while EPS is expected to double.
These forecasts refer to the organic growth of the group that is expected to be further reinforced, with the acquisitions that have already been completed. The acquisition of the 46% of the share capital of the Cypriot company Christis Dairies Public Ltd has been completed, while the public offering for the 100% of the share capital is in process, and the acquisition of the Bulgarian United Milk Company that is also in its final stage and has been agreed upon, and will be finalized after the approval from the Bulgarian Competition Authority.
With the completion of the above, VIVARTIA?s presence with dairy production units in 3 countries of the European Union, sets the basis for its expansion in Southeastern Europe, establishing the Group as the dominant regional player in the particular market.