· The wisely chosen corporate acquisitions, a successful divestment policy, continuation of the business and market diversification strategy and a constant commitment to innovation have been decisive in the Group¿s outstanding evolution during 2006.
· EBITDA grew by 9% to 306 million euro and EBIT by 7% to 208 million euro.
· The strong cash generation during the period was sufficient to finance the vast investment undertaken for the acquisitions of New World Pasta and Minute Rice.
· Ebro Puleva distributed dividends of more than 52 million euro among its shareholders.
Madrid, 1 March 2007. The Ebro Puleva Group performed well during 2006. It strengthened its leadership in the food sector, significantly increasing its importance on the international market and achieving major growth in both turnover and profits, even though New World Pasta was only included in its consolidated results for seven months and Minute Rice for two. The Group chalked up a net profit of 180.3 million euro, up 16%, and a turnover of 2,448 million euro, 15% up on 2005.
The indicators of operations also grew. The EBITDA, or gross operating profit, rose 9% to 306 million euro, while EBIT, or net operating profit, totalled 211 million euro, up 7% year on year.
At year-end 2006, thanks to the strong cash generation over the past twelve months, Ebro Puleva increased its debt by only 203 million euro over year-end 2005, in spite of the heavy financial investment made to purchase New World Pasta (363 million dolar) and Minute Rice (280 million dolar).
True to its promise to maintain an active policy for the remuneration of its shareholders, the Ebro Puleva Group distributed more than 52 million euro in dividends. The dividend per share (DPS) was 0.34 euro.
A new business profile for Ebro Puleva
2006 was the first year under the new Strategic Plan, which will take the Group up to 2009. During these first twelve months, the Group concluded two major corporate operations on the North America market, which have given shape to a new business profile for Ebro Puleva. Following its acquisitions of New World Pasta and Minute Rice, Ebro Puleva is now the second pasta manufacturer worldwide and among the top fifteen food enterprises in the United States.
The brand business was also consolidated and strengthened during the year, accounting for 66% of the Group¿s total sales. The Group also achieved a remarkable growth in its international business: 50% of its turnover was obtained overseas and this percentage is bound to increase in 2007 when these two businesses contribute to the consolidated results for the full year.
These two incorporations, along with the outstanding progress of our rice and pasta divisions, which have created solid business structures in new countries such as Poland, Libya, Hungary, the Czech Republic, Thailand or Egypt, a vanguard R+D+I policy, boosted during 2006 with the incorporation of Española de I+D, and a huge investment in advertising, which cost more than ¿67 million in 2006, are just a few of the strategic pillars on which Ebro Puleva will develop its new business model, aiming first and foremost at becoming a benchmark in the ¿Meal Solutions¿ segment.
Core businesses
Sugar
Thanks to the commercial and logistic strength of Azucarera Ebro, the commitment to top-of-the-range, high value-added sugars and the declassification and production cuts imposed by the European Authorities, the sugar division achieved a reasonably satisfactory development, even though this was the first year under the new regulatory framework. It posted a net turnover of 687 million euro, up 5% year on year, with an EBITDA of 97 million euro.
Rice
The high price of the raw material, pushed up by the smaller harvest, the greater demand from the new EU member states and the GMO crisis, hampered the performance of the rice division during 2006. Even so, the strong growth of the brand business and the new measures implemented in the last quarter for the new business development model partially offset these adverse effects, giving the division a turnover of 696.6 million euro, a year-on-year growth of 2%, with an EBITDA of ¿71 million. It should be noted here that in barely two months, Minute Rice contributed 13.7 million euro to the turnover and 4.9 million euro to EBITDA.
Dairy
In spite of a difficult backdrop, due to the hike in energy costs and, more recently, in raw materials and logistics, the dairy division has closed another successful year, with an outstanding performance of Peques and Max. Sales were down 7% due to the sale of the Leyma brand and the EBITDA, despite the significant cost of renewing the product portfolio and heavy investment in advertising, rose 2.4% to 55.4 million euro. This hefty outlay will build a platform for future growth in results.
Pasta
The Pasta Division is now one of the most important areas of the Group, accounting for 24% of total consolidated sales and 29% of the total EBITDA. Once the full-year¿s accounts of New World Pasta are consolidated in 2007, this will be the largest division of Ebro Puleva. In 2006 it recorded a turnover of 593 million euro and an EBITDA of 92 million euro. During its first seven months as a member of the Group, New World Pasta contributed 149 million euro to the total turnover of the division.
Other businesses
Within the area of biotechnology, Puleva Biotech increased its turnover by 13.3% to 8 million euro, boosted by the 66% growth in product sales. In this regard, the performance of the Omega-3 products was highly satisfactory, strengthening their position considerably during 2006, while new Hereditum®-based products were launched on the international market. The Omega 3 factory was enlarged in response to the strong demand for this product.
In the recently created biofuels division, the Babilafuente factory started operating just last May so its contribution to the Group is as yet limited, and as we announced recently, we have now obtained environmental authorisation for our biodiesel project in Jédula (Cádiz), so work will commence very shortly on the building of this plant.
