· The organic growth of the rice and pasta divisions, the continued commitment to innovation, differentiation in the product portfolio, the strength of our brands and diversification in both businesses and markets were all decisive in achieving the impressive evolution of the Group during a year hard hit by the hike in raw material prices.
· EBITDA improved on the year-end estimates announced in October, closing at 306.7 million euro.
· The excellent level of cash generation during the period enabled the Group to cut its Net Debt by 12%, from 1,134 million euro to 988 million euro, leaving it in a comfortable financial position.
· Ebro Puleva distributed more than 55 million euro among its shareholders in dividends.
Madrid, 27 February 2008. On a difficult scenario for the world food trade, shaken up by the strong hike in raw material prices, the evolution of the Ebro Puleva Group was nevertheless positive, maintaining the overall yield of the company above the estimates announced in October, achieving significant organic growth in the rice and pasta divisions and strengthening its leadership on all the markets on which it operates. In particular, EBITDA was up 0.25% to 306.7 million euro and turnover was up 9% year on year to 2,685 million euro.
EBIT, or net operating profit, stood at 207 million euro and the investment in advertising, in accordance with the strategy of building value around our brands, was stepped up by 17 million euro, 24.6% more than in 2006.
The Consolidated Profit on a Going Concern basis totalled 92.5 million euro, just 28% less than the previous year, despite the recording during the year of all the impacts of the sugar reform, and despite the fact that, as announced in the Outlook, the 2006 profit included 60 million euro from the sale of businesses in Central America.
It should be noted that by the end of 2007, thanks to the strong cash generation over the twelve-month period, Ebro Puleva had reduced its debt by ¿146.6 million year on year, down 12%.
True to its commitment to maintain an active shareholder remuneration policy, the Ebro Puleva Group distributed over 55 million euro in dividends. The earnings per share (EPS) was 0.36 euro.
The Group also continued to consolidate its already predominant international nature during 2007, its international businesses now accounting for 53.2% of the consolidated EBITDA. Apart from the important work done by the European and American companies, launching new products in the Meal Solutions segment, new offices were also opened in Romania and the Ukraine, Panzani and Riviana increased their market shares in France and the USA, respectively, and the Group¿s activities were expanded to the Baltic States following the acquisition of Birkel in Germany.
Core Businesses
Rice
Thanks to the timely strategy of diversifying supplies undertaken last year and intense marketing activity based on the launching of new products and healthy concepts, the rice division posted record results during the year. Its EBITDA was 35% up on the previous year, at 96 million euro, while its turnover rose 11% to 771 million euro.
Pasta
In a setting hard hit by the hike in durum wheat prices, the pasta division achieved a positive evolution, underpinned by the launching of new functional pastas in Europe and North America, a sound advertising policy and the integration of Birkel from October. Sales grew by 30% to 775 million euro while EBITDA, slightly dented by the impact of the higher raw material prices, slipped 4% to 88.5 million euro.
Dairy
Although the satisfactory evolution of some of the categories in the dairy division was somewhat dampened by the steep rise in raw milk prices, it also reveals the credibility and strong position on the market of the Puleva brand. As these price rises were fully passed on to the end product, the division EBITDA came down just 4%, to 53 million euro. The EBITDA/Sales margin of this division is 10% and its turnover grew 4.6% to 527 million euro.
Sugar
The business of the sugar division has been affected by the large sugar stocks, which forced prices down. We also had 130,000 tonnes less sugar than in 2006 (25,000 t corresponding to reduced quota and 105,000 t to the disappearance of Intervention and surplus sugar). Against this difficult backdrop and in a year in which the European sugar market has endured a severe decline, our sugar division has achieved a significant EBITDA of 80 million euro. With the forthcoming conclusion of the sugar reform, we anticipate a more stable, more positive scenario for this business.
Other divisions
In the area of biotechnology, the turnover of Puleva Biotech grew by 27% to 10.2 million euro, 47% of which corresponds to the sale of Eupoly Omega 3®. But the most important milestone of this division was the recent acquisition of Exxentia, marking the commencement of a new phase for the company, with increased size and commercial vision, greater independence from the Group and a better standing on the stock market.
