Lembeke / BE. (lbbv) During the first half of 2012, the consolidated turnover of the Lotus Bakeries Group grew by 4,3 percent to 139,3 million EUR. Factoring in the effect of the termination of the Ikea contract, internal growth on a like-to-like basis rises to over five percent. The growth figure for brand products is slightly higher.
Turnover
Lotus Bakeries Belgium achieved strong growth in the first half. A clear focus on consistent quality and distinctive flavour along with significant investment in consumer communication continue to bear fruit. Following a good 2011, the Lotus brand increased its market share further in the caramelized biscuits, cakes, waffles and gingerbread sectors.
The gingerbread market in the Netherlands also continued its growth in the first half, driven by new television campaigns for the Peijnenburg brand and Snelle Jelle and by successful launches like Peijnenburg Overheerlijk and Tussendoor.
In the first half a television campaign started in France on supporting Lotus caramelized biscuits by strengthening the Lotus brand and the link between Lotus and coffee time. This campaign follows the two national billboard campaigns carried out in 2011.
In the areas UK, Northern and Eastern Europe, North America and Export, the strategy is to further expand our caramelized biscuit business and to seize all development opportunities. During the first half, our caramelized biscuit sales grew compared with last year.
Income statement
The 2012 half-year results confirm the strong operating results of 2011. Recurrent operating result and recurrent operating cash flow are up slightly compared with last year. The strong commercial support of the Lotus Bakeries brands and related products was continued. During the first half of this year the investments in marketing were also continued.
The 725’000 EUR non-recurrent result reflects mainly the costs associated with the realignment of operations in the Belgian companies of the Group and the depreciation of the Wieger Ketellapper brand. The financial result for the first six months of the year was a net cost of 725’000 EUR, consisting mainly of interest charges. The tax expense is 3,5 million EUR or 21,3 percent of pre-tax profit. The net result for the first half is up 13,6 percent compared with 2011.
Investments
Investments during the first half of 2012 amounted to 13,5 million EUR. The main investments relate to the expansion of biscuit production in Lembeke and the extension of the Oostakker plant into a strategic cake factory. Both production lines in Lembeke are now fully operational.
Net financial debt
Net financial debt was influenced over the past twelve months by the investments amounting to nearly 25 million EUR, mainly in the expansion of the biscuit factory in Lembeke and the cake factory in Oostakker. Thanks to the strong cash flow of the past twelve months, net financial debt has nonetheless fallen from 26,6 million EUR to 20 million EUR.
Recasting of the legal structure of the Belgian companies
Lotus Bakeries aims to have a better operating and legal structure. Lotus Bakeries NV becomes purely a listed holding grouping all the group´s activities. The Belgian operating activities, which were previously carried out in Lotus Bakeries NV, have been placed into Lotus Bakeries Belgium NV. The corporate activities, part of which were carried out in Lotus Bakeries Group Services NV, have been brought into Lotus Bakeries Corporate NV. Following these relocations, Lotus Bakeries NV and Lotus Bakeries Group Services NV were then merged.
Conclusion and prospects
For the first half of 2012, Lotus Bakeries can once again present an attractive internal growth of 4,3 percent, rising to five percent on a like-for-like basis. This growth was achieved by significant commercial efforts in the various countries, centred on clear and consistent communication with the consumer. In this way the growth of our branded products is stronger than our overall growth. Lotus Bakeries is convinced that it needs in the long term to continue to invest significantly in marketing + sales in order to support and further develop its brands and associated specialties. The strategy of clear focus on the main specialties will also be continued.
During the first half of 2012 the group was able to maintain the strong profitability ratios of 13 percent recurrent operating result and 17 percent recurrent operating cash flow that it achieved in 2011. The strong marketing efforts are supporting this growth and profitability. The cash flow generated is available for the major investment programmes at a number of production sites. In this way, production capacity in Lembeke has been ramped up to meet the growing demand for caramelized biscuits. A clear focus on continuing to build up the international caramelized biscuit business is a major pillar in the Group´s long-term strategy. Furthermore, during the first half, major investments were already made for the expansion in Oostakker, where all cake production in Belgium will be housed. In this way, Lotus Bakeries is working on increasing production efficiencies at the different sites and achieving a consistently high quality level in its various specialties.
The Lotus Bakeries policy of passing on changes in raw materials and packaging prices and other cost elements, in combination with production efficiencies, will be consistently applied. Both the Management and the Board of Directors of Lotus Bakeries are convinced that the right strategy and a good basis exist for continuing, profitable growth.
