9 months 2012 results

Monday, 22 October 2012.

Consolidated net profit stood at 1.92 million euro compared to the negative result of 2.59 million euro in September 2011.

- The Cocoa and Chocolate business maintained its turnover at previous year’s levels and increased the profit from operations up to 10.34 M€, compared to 4.47 M€ in September 2011. Net profit reached 2.06 M€ versus the negative net result of 3.30 M€ in the first nine month of 2011.

- Natraceutical contributes to Natra’s consolidated accounts an operating income of 1.29 M € compared to the negative result of 1.54 M € in the same period last year. The company ended the third quarter with a slight negative deviation of 0.14 M € in net income, compared with a profit of 0.71 M € to September 2011, which was mainly generated by the difference in the contribution of Naturex in each of the exercises.

- On a consolidated basis, Natra completed the first nine months of 2012 with a profit from operations of 11.63 M € compared to 2.93 M € to September 2011, and a net profit of 1.92 M €, compared to the negative result of 2.59 M € in the first nine months of last year.

1.- Business performance of the Cocoa and Chocolate arm

 

 

In the third quarter, the Cocoa and Chocolate business continued to maintain a strong operational recovery, in line with the trend began in the fist half of the year.

The turnover remained flat in the first nine months, reaching 235.70 million euro, despite a sight decline in sales in the third quarter stand.

However, the Cocoa and Chocolate EBITDA progressed by 32.1% in the third quarter stand, bringing the cumulative figure for the first nine months of the year at 18.46 million euro, 37.2% higher than the figure achieved in the first nine months of 2011. Thus, the EBITDA margin rose from 5.7% in September 2011 to 7.8% in the first nine months of 2012. This boosted the business operating profit of Cocoa and Chocolate to 10.34 million euro in the first nine months of the year, compared with 4.47 million euro in the same period of 2011.

This improvement in profitability was mainly the result of the optimization of the product portfolio towards more value-added products in which the company has been working in recent quarters, together with increased efficiency in the supply of raw materials and improvements in production efficiency.

Consumer goods division

The Consumer Goods Division closed the first nine months of the year with a turnover of 172.09 million euro, a decrease of 1.0% compared to sales in the first nine months of 2011.

The company’s will to ensure sustainable growth and long-term profitable business for the consumer goods division has motivated the development along the exercise of a review policy of the product portfolio, in order to adapt it to the new markets and customers. This fact is leading to the discontinuing of some references that did not guarantee a minimum return to the business, which, together with some weak consumption in Europe, are the main reasons that the turnover of the main business in Natra did not evolve with the same strength that the operating results, especially between the months of July to September.

The linearity of the turnover in the Consumer Goods Division was the result of a reduction in the sales volumes. However, the policies implemented enabled the company to increase the quality of the turnover, with a direct positive impact on profitability.

By market, the third quarter continued to confirm the growth of the consumer goods division markets outside Europe, where sales closed the first nine months of the year with an increase of 62.0%. At the end of September, export markets increased their contribution to the total sales of the Consumer Division to 18.0%, with North America as the spearhead in Natra’s development strategy outside Europe.

Meanwhile, turnover in Europe presented a sales decline of 10.0%, mainly due to the process of replacing references in the product portfolio of the Division and to some weakness in consumption.

 

 

Industrial goods division

Industrial goods division placed its turnover in 63.61 million euro in the first nine months of the year, an increase of 2.4% compared to the end of September 2011, despite a decline in sales of 8.9% in the third quarter stand.

Contrary to what happened in the Consumer Goods Division, the Industrial Division continued to progress positively in sales volumes. However, it was the price effect which impacted the business this past quarter, due mainly to the decline in the price of cocoa as well as the appreciation of the sterling pound against the euro.

Additionally, the oversupply of cocoa butter produced last year by the industry of cocoa derivatives, following the strong demand of cocoa powder (which is produced in the same production process as butter and in similar proportions), led to a fall of prices, which resulted in some major manufacturers stopping production at the beginning of the third quarter.

This impacted negatively the turnover of the Industrial Goods Division, although the decision of the industry with regard to the supply of butter seems to have revived again the demand, as evidenced from mid-September. This makes foresee a better evolution of the Division’s turnover in the last quarter.

In the first nine months of the year, the behavior of the different markets in this Division was similar to those in the Consumer Goods Division, with significant growth in turnover in the export countries (+22.6%) and slight decline in Europe (-3.2%). Spain, the main market of the Industrial Goods Division, which traditionally brings together more than 50% of the total sales of the Division, still presented a growth of 1.6% at the end of September 2012.

 

 

2.- Contribution of Natraceutical

In the first half of the year, Natra and the board member Carafal Investment signed an agreement regarding a call option on the 3.73% stake in Natraceutical that Carafal Investment acquired from Natra in 2009 to implement a temporary cash inflow in Natra. Following this transaction, Natra consolidates the rights over such shareholding, so that the company controls a share of 50.6% in Natraceutical, consolidated by full integration into their financial statements.

Regarding Natraceutical’s performance, after a decline in turnover of 19.6% in the first quarter, the positive development of sales in the following quarters (+3.4% in 2Q and +8.8% in 3Q stand) placed Natraceutical's turnover at 23.59 M€ (-5.3% compared to September 2011). However, operational optimization policies implemented throughout the year enabled the company to bring its EBITDA to 1.78 M€ in September 2012, compared to -0.57 M€ in the third quarter of 2011 and contribute an operating income of 1.29 M€, compared to -1.54 M€ in 2011.

Despite the operational improvement of Forté Pharma, Natraceutical closed the third quarter with a net loss of 0.14 million euro compared to net income of 0.71 million euro in September 2011. The difference is due primarily to the different contribution of Naturex in the two years. Naturex's contribution in Natraceutical in the first nine months of 2011 was 6.52 million euro, though asset consolidation by the equity method as well as capital gains on the partial sale of the shareholding in company. However, from November 2011, after accounting Naturex’s stake as held for sale, the asset is valued at market price. The valuation update resulted in revenues of 1.50 billion euro in the first nine months of 2012.

At the end of the third quarter, the value of the financial investment in Naturex was 72.52 million euro, while net debt stood at 50.94 million euro, compared to 76.39 million euro on September 30, 2011.

On September 30, 2012, the shareholding in Naturex included 1,368,331 shares, representing 17.7% of the French company.

Natraceutical has disclosed today, October 22, the 9M results. This information is available on the company website:  www.natraceuticalgroup.com

3.- Net result

In the first nine months of the year, Natra’s consolidated net income stood at 1.92 million euro, compared to a loss of 2.59 million euro in the first nine months of the previous year.

The significant recovery of the Group’s business operations, which allowed closing September with an operating profit of 11.63 million euro compared to 2.93 million euros in September 2011, was the main driver of the change in sign of Natra’s net result.

These improvements even enabled the company to counteract the significant positive impacts that occurred in the previous year's financial results, whose most notable element is the contribution of 6.52 million euro by Naturex into Natra’s consolidated accounts at the end of the third quarter of 2011. By contrast, in 2012, the increase of Naturex’s market price since December 2011 meant an income of 1.50 billion euro in Natraceutical accounts up to date.

4.- Financial debt

Over the last twelve months, Natra reduced its debt by 30.82 million euro. On September 30, 2012, net financial debt of the consolidated group amounted to 218.31 million euro, compared to 248.77 million euro on September 30, 2011. Of the current group's debt, 50.94 million euro are related to Natraceutical.

5.- Consolidated Profit and Loss Account – 9 months 2012

 

 

6.- Consolidate Balance Sheet on September 30, 2012

 

 

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