August 14, 2007
Provimi H1 sales up 13.9 percent on-year
Press release
Provimi's sales during the first half increased by 13.9 percent on-year to EUR976.5 million, with sales volumes and revenues showing an increase in most countries.
New acquisitions contributed EUR39.8 million to sales, while exchange rates, mainly the US dollar and the Chilean peso, had a negative impact of EUR13.0 million.
On a like-for-like basis, sales growth was 10.8 percent over the period, which was mainly caused by a significant increase in raw material costs with no positive impact on the group's operating margin.
Revenues
(in million EUR)
Jun 30, 2007 Jun 30, 2006 Change (percent)
France 93.8 76.3 +22.9
Poland 194.8 168.0 +16.0
Rest of Europe 410.8 377.0 +9.0
North America 136.8 100.1 +36.7
Rest of the world 140.3 135.7 +3.4
Total 976.5 857.1 +13.9
In France, sales increased significantly in comparison with last year, mainly thanks to strong volume growth in premixes through higher exports, a stronger position in the domestic market and integration of the pet food activities acquired in December 2006.
Sales in Poland recovered well from the difficult market conditions during last year's second half. Shortages of grains for customers contributed to the growth in complete feed sales volumes, while the continued rise in raw material prices further increased revenues.
In the rest of Europe, sales volumes remained stable. Volume growth in the specialties and pet food segments in central and eastern Europe compensated for lower premix volumes. Higher raw material costs were with some delay, passed on to customers.
Overall sales in North America benefited from last year's acquisitions in Canada and California, as well as the successful introduction of new products.
In the rest of the world, Brazil, India, Vietnam and South Africa registered increased sales volumes over the first six months compared with the same period last year, compensating for a volume decrease in China, mainly attributed to difficult conditions in the swine sector.
Provimi said that the broad based sharp rise in raw material prices already experienced in 2006 continued during the first half of 2007, notably in cereals, particularly wheat and corn, and fishmeal. Droughts in South-eastern Europe worsened market conditions even further. The increase was only partly passed on to customers, especially in pet food where contracts with customers cover longer periods.
The group continued restructuring of its complete feed activities in central and eastern Europe, where operations continued to show good growth. Provimi's Polish operation further reduced its manufacturing base by closing another two plants. A new plant in Ukraine became operational as of Jul 1, 2007. Last year's acquisitions have now been fully integrated in the group.
This year's first half saw mixed developments, with satisfactory performances in the animal nutrition and aqua feed businesses. A delay in passing on raw material price increases and a slow down in pet food activities in western Europe are seen to hold back results.
Provimi expects continued high raw material prices to create adverse market conditions in the second half of the year. Nevertheless, the group will continue restructuring activities to adapt its organisation to these changing market conditions.
The semi-annual results will be published on Sep 11 after closing of the stock market.
EUR1=US$1.3582 (Aug 14)
For further information, please contact Olivier Leduc (investor relations) at: +33-1-34-82-79-04
