Frigoglass, Europe's leading manufacturer and solutions provider of Ice Cold Merchandisers (ICMs), with operations in 14 countries across three continents, announces today first quarter 2006 results:
Q1 2006 Highlights*
- Sales of euro 116,6 million, 35,0% above last year's Q1
- EBITDA up 34,4% to euro 29 million
- EBIT up 42,8% to euro 24 million
- EBT rose by 44,7% to euro 22,6 million
- EPS of euro 0,38 versus euro 0,23 up 68,3%
- NTS/NWC ratio improved by 13,6% versus last year's Q1
* The above numbers are adjusted: without including PET operations (VPI) in Consolidated Sales & EBITDA & EBIT
Mr Dimitris Lois, Managing Director, Frigoglass, commented: "We are delighted to announce such strong first-quarter results. The underlying 43,1% increase in Cool Operations sales is driven by further penetration of open-front solutions and accelerated placement behind Soccer World Cup initiatives. Additionally, the multi-channel development focus and persistent efforts in emerging geographies together with our leadership in offering highly effective solutions continue to underpin our growth momentum. New products represented 21,6% of Cool sales in this quarter, highlighting our success in innovation, with sales being driven not only within Western Europe, but increasingly from the growth markets of Asia, Africa and East Europe. Our counter measures against raw material rises and overall cost control programmes, have enabled us to improve margins over the quarter achieving a consolidated gross margin improvement of 120bps. We expect Nigeria to remain challenging during 2006 and raw material cost ressures to further increase during the rest of the year. We will be working hard to mitigate these effects through ongoing working capital discipline, efficiency initiatives and tax planning. The results we have delivered today give us confidence in our ability to achieve full year targets in line with our previous guidance".
Lillian Phillips
Investor Relations
Tel: +30 210 6165757
E-mail: lphillips@frigoglass.com
Greg Quine
Financial Dynamics London
Tell: +44 207 269 7206
E-mail: greg.quine@fd.com
Review
The first quarter of 2006 was characterised by strong growth in Cool Operations both in sales and in profitability. This satisfactory performance was achieved through both vertical (higher share of business in key accounts) and horizontal (further expansion of the customer base) gains. Cool Operations' contribution to total sales grew to 86% versus 80% the same quarter last year and Nigeria Operations contribution dropped to 13% versus 19%. As consolidated Sales grew by 35,0%, net profit rose by 68,3% also aided by favourable product mix, ongoing efficiency initiatives and lower effective tax rate. Consolidated gross margins improved 120 bps against raw material cost increases of 320 bps. Cool Operations sales were up 43,1% to euro 100,6 million with volume to Coca-Cola bottlers (other than Coca-Cola HBC) rising by 116% and to breweries by 37%. Across geographies, Western Europe exhibited an increase of 85% during the quarter with Germany and Italy being particularly strong where specific trade channels have open front models. South East Asia saw an increase of 107%, driven primarily by Malaysia and India. Nigeria Operations first quarter sales reached 15,4 million, 7.0% lower than the strong first quarter of 2005. Glass operations are still experiencing a negative impact from the lower brewery demand, however volume sales to the soft drink segment had an impressive increase of 49,4%. The ICM operations in Nigeria had a significant sales increase of 144,5%, now accounting for 39,7% of Nigeria's Other Operations Revenue versus 16,6% last year. The reduction in the recorded sales of PET Operations is related to the transformation of operational framework shifting from selling preforms and blown bottles to a leaner and more competitive pre-form conversion/tolling. Now PET Operations account for 6% of Nigeria Other Operations versus 26,8% (from euro 2,2 million to euro 0,5 million) in the same period last year with related reductions in working capital requirements and exposure to volatile PET pricing. Frigoglass management remained consistent in its "efficiency through quality" approach and implementation of cost controlling initiatives. This, combined with the strong revenue growth, saw the first quarter of 2006 operating profit (EBIT) rise by 42,8% to euro 24 million despite an environment of persistently high raw material prices. Owing to further optimisation of the effective tax rate, down to 30,7% from 38,6%, first quarter net earnings rose to euro 15,2 million, up 68,3% from the first quarter of 2005. VPI was included in Frigoglass results until 28 February 2006, with sales that reached euro 10,5 million, and minor profits. These results are not included in the published consolidated results.