Leipnik-Lundenburger: stays the course even in turbulent times

Vienna / AT. (lli) Leipnik-Lundenburger Invest Beteiligungs AG (LLI) stays the course also in turbulent times. Hence, the group boasts a very good result also for the past financial year 2007/2008. Despite the extremely difficult economic setting, the earnings before interest and taxes (EBIT) rose from 53 million EUR by 25 percent to 66,3 million EUR. The group sales for the first time surpassed the one-billion-euro-sales threshold, climbing by 47 percent to 1’233 million EUR. In the «Flour + Mill» segment, there were two major reasons for this trend. On the one hand, the flour prices increased drastically due to significantly higher commodity prices. On the other hand, the Romanian and Bulgarian mill companies were fully included for the first time. In the Vending segment the increase was mainly driven by internal growth in the domestic and foreign companies.

At present, almost 90 percent of the sales are recorded abroad, mainly in the countries of Central, Eastern and South Eastern Europe. 42 of the 52 sites of the LLI group are located abroad. Of a total of 3’656 staff member 3’163 are employed abroad, while 493 work in Austria.

Euromills: 29 mills from the North Sea to the Black Sea

The mill holding company LLI Euromills GmbH, into which all 29 mills of the group have been integrated since early 2008, operates sites in Austria, the Czech Republic, Hungary, Poland, Romania and Bulgaria. LLI increased its shares in the Romanian and Bulgarian subsidiaries to currently 98 percent (Romanian Titan S.A.) and 97 percent (Bulgarian Sofia Mel AD.) still during the year 2008, but after the balance sheet date 30 September 2008.

In 2007/2008 a total of almost three million tons of grain was processed in the LLI Euromills group, which is among the top four of the milling sector worldwide. Despite the extremely difficult economic setting – initially extremely high and then very volatile grain and commodity prices – all mill companies of LLI Euromills recorded favourable results in the financial year 2007/2008.

LLI Euromills, which has been established to control the group more efficiently and to enhance synergies, has proven its outstanding efficiency already during the first year. While the cost savings and optimisation effects amount already now to about one million EUR, a volume of cost savings of five million EUR has been projected for the current financial year. The main reasons are cross-border cooperation, process optimisation, the analysis of cost pools as well as information and strategies for grain purchasing and the building up of stocks.

In total the sales of the LLI mill group increased from 729 million EUR by 52 percent to 1’109 million EUR in the past financial year. The earnings before interest and taxes (EBIT) amount to 48,1 million EUR, which is significantly above the prior-year level of 32,9 million EUR (plus 46 percent). In the past financial year almost 3,0 million tons of grain (prior year: 2,8 million tons) were milled in the LLI Euromills group. Flour sales totalled 2,3 million tons (prior year: 2,2 million tons).

Vending

With its subsidiaries, cafe+co International Holding established itself as a market leader in the Vending sector (sale of hot drinks and snacks by vending machines) in Austria as well as in Central and Eastern Europe. About 44’000 vending machines (prior year: 40’000) are operated and maintained by the cafe+co group. A total of 4’000 tons of green coffee was processed in the past financial year. Besides the main product coffee, cafe+co significantly widened the range of snacks and established its own fresh-keeping logistics system.

In the financial year 2007/2008, the Vending group succeeded in achieving a growth in sales and in the result that is considerably above market growth (without acquisitions). cafe+co registered sales of 123 million EUR in the past financial year; this is a plus of 15,5 percent over the prior year (107 million EUR). The earnings before interest and taxes (EBIT) rose from 18,3 million EUR in the previous year to 20,2 million EUR.

Outlook

The LLI group continues to face a quite challenging economic framework also during the current financial year, which is in particular due to extremely volatile commodity prices. On the whole, a stable development is, however, expected. The food industry – and with that the milling sector – prove once more relatively crisis-resistant in periods of economic turbulences. Moreover, the group continues to work on modernising and consolidating the mill sites as well as on boosting the efficiency through synergies. A milled quantity of more than three million tons of grain is expected for the current financial year.

The tense economic situation triggered by the financial crisis will have adverse effects on the B2B sector, of which the Vending segment forms part, as many companies cut their personnel or change over to short-time working (decrease in flow of customers). In Austria the favourable development of the past financial year reflected in a steady increase in new customers will, however, continue. In this context, new technologies, state-of-the art equipment with additional options as well as ongoing innovation are decisive. Based on estimates, the entire group will register more than half a billion of coffee units dispensed in the current financial year.

The LLI group is expected to record sales which will again surpass the one-billion-euro threshold in the financial year 2008/2009. The result of the year is expected to correspond to that of the year 2007/2008 (lli).