Q1 2012 highlights
- Autonomous growth driven by Grocery and ABC
- Clipper, UK market leader in organic and fair-trade teas, strengthening brand portfolio
CEO Statement
Piet Hein Merckens (CEO) comments: "In the first quarter we have continued to set further steps on our transformational journey to build our European organic business. We witnessed comparable trends as seen last year. While European consumer confidence remains low and the economy subdued, the market for organic food continued to develop relatively favourably. Grocery, ABC and Frozen Foods all showed a good performance growing sales. This contrasts to HFS for which we are implementing multiple improvements. These will gradually translate in improvements in top-line and earnings. Central sourcing initiatives and pricing discipline both contributed to an improving gross margin.

Our operating result decreased due to higher operating costs. We continue to invest in ICT by rolling out SAP and in marketing to strengthen and grow our brands. We worked on filling the innovations pipeline and building our brands for example by airing a new Bjorg commercial and the Zonnatura follow-up activation campaign. Step-by-step we are becoming a stronger more focussed company building its organic brands in Europe."

Q1 2012 highlights
• Autonomous revenue growth of 1.3%, supported by increased marketing investments
• Gross margin increased due to central sourcing, pricing discipline and improved business mix
• Lower operating result of €3.0 million, mainly due to planned step up in costs
• Acquisition Clipper (as of 1 March), UK market leader in organic and fair trade tea
• Ivonne Rietjens and Marjet van Zuijlen appointed as members of the Supervisory Board
Consolidated key figures Q1 2012
in € million, unless stated otherwise Q1 2012 Q1 2011
Revenue ¹ 170.6 178.8
Autonomous revenue development ¹ ² 1.3%
EBITDAE 1
6.3 10.4
Normalised operating result (EBITE) ¹ 3.0 7.0
as % of revenue 1.8% 3.9%
Operating result (EBIT) 1 3.0 8.1
Net result, attributable to equity holders 1.5 4.5
Net debt 57.3 36.7
Earnings per share (in euro) (total Wessanen) 0.02 0.06
Average nr. of outstanding shares (x 1,000) 75,665 74,819
1)
From continuing operations;
2)
Including adjustments for currency effects and acquisitions/divestments

CEO Statement
Piet Hein Merckens (CEO) comments: “In the first quarter we have continued to set further steps on our transformational journey to build our European organic business. We witnessed comparable trends as seen last year. While European consumer confidence remains low and the economy subdued, the market for organic food continued to develop relatively favourably. Grocery, ABC and Frozen Foods all showed a good performance growing sales. This contrasts to HFS for which we are implementing multiple improvements. These will gradually translate in improvements in top-line and earnings. Central sourcing initiatives and pricing discipline both contributed to an improving gross margin.
Our operating result decreased due to higher operating costs. We continue to invest in ICT by rolling out SAP and in marketing to strengthen and grow our brands. We worked on filling the innovations pipeline and building our brands for example by airing a new Bjorg commercial and the Zonnatura follow-up activation campaign. Step-by-step we are becoming a stronger more focussed company building its organic brands in Europe.“

Financial summary Q1 2012
Revenue amounted to €170.6 million as a result of 1.3% autonomous growth, 0.7% positive currency exchange effects (British pound and US dollar) and a (6.6)% combined acquisition and divestment effect. Autonomous revenue growth consists of 2.3% price/mix effect and (1.0)% volume and was realised at Grocery, ABC and Frozen Foods, partly being offset by HFS.
Operating profit decreased to €3.0 million. While central sourcing initiatives and pricing discipline contributed to an increased gross margin, operational costs also increased. A smaller part of these increases has a structural basis such as increased ICT costs related to the implementation of SAP.
The rest is either due to phasing or temporarily effects. Marketing investments were up mainly due to increased spending at ABC and further investments in brand building at especially Grocery.
Warehouse and transportation expenses have temporarily increased to safeguard a seamless distribution of our products during a limited period of time. We also incurred costs for acquiring Clipper.
No exceptional items were reported in the current
quarter versus €1.1 million of net exceptional benefits
in Q1 2011 (mainly including the release of a legal
provision at Grocery and HFS). Net financing costs
were €(0.9) million, in line with the previous quarter
and slightly up versus Q1 2011 (€(0.6) million). Income
tax expenses were €(0.8) million (Q1 2011: €(3.0)
million) as a result of lower taxable profits in the
quarter. The net result, attributable to Wessanen equity
holders, amounted to €1.5 million, resulting in earnings
per share of €0.02 (Q1 2011: €0.06).

The operating cash flow of €(5.8) million was in line with last year’s €(5.2) million. A lower EBITDA contribution was compensated for by a reduced working capital outflow in the quarter. Capital expenditures were €(2.0) million (Q1 2011: €2.5 million) mainly consisting of various smaller projects
regarding production enhancements and expansions in our various segments.
Net debt increased to €57.3 million per 31 March versus €32.2 million at year end 2011. The increase is mainly a result of the acquisition of Clipper (€(21.3) million) and a seasonal working capital outflow
of €(8.2) million in part due to increased inventories at ABC in anticipation of the important summer selling season. We also received the final payment for the divestment of Tree of Life UK (€3.9 million).
Consequently, the net debt / EBITDAE ratio moved up to 1.6x as of 31 March (year end 2011: 0.8x).
On 17 April, the Annual General Meeting of Shareholders has appointed both Ivonne Rietjens and Marjet van Zuijlen to the Supervisory Board for a term of four years and re-appointed Jo Hautvast for a term of one year.

Financial guidance FY 2012
• Net financing costs expected to be €3-4 million
• Effective tax rate expected to be 30-40%
• Capital expenditures expected to be €12-14 million
• Depreciation and amortisation (excl. impairments) expected to be about €15 million
• Non-allocated expenses (including corporate expenses) expected to be €12-13 million