Wessanen Results Support Wellness Strategy

AMSTELVEEN, Netherlands--(BUSINESS WIRE)--Nov. 26, 2002--
Third quarter 2002 compared to third quarter 2001:

-- EBITA current activities increased 29% to EUR 18.7 million (EUR 14.5 million in 2001)

-- Net sales from current activities decreased 3% to EUR 678.2 million (EUR 701.8 million in 2001)

-- Sales of Tree of Life Europe grew 22% to EUR 101.1 million (EUR 83.1 million in 2001), of which 4% was autonomous growth

-- Sales of natural food in the United States grew 13% to EUR 118.2 million, sales in specialty food declined 4% to EUR 261.4 million

-- Implementation structural organizational measures at Tree of Life NA, including a review of the value of the IT system

-- Balance sheet and debt position undiminished strong: EBITDA/interest ratio 6.4 (5.4 in 2001)

-- Outlook for 2002 is maintained: profit per share EUR 0.71 before amortization of goodwill and exceptional income and expenses.

-- Extraordinary income due to the sale of Leerdammer Company expected of about EUR 100 million and an exceptional charge of approximately EUR 30 million due to the partial write-off of the IT system and reorganization of Cereals in the United Kingdom.

Comments of Mac Zondervan, Chairman of the Executive Board "The development of our result in the third quarter shows the validity of our strategy while underlining those operational aspects where further improvement is necessary. Our focus on the consumer's demand for high-quality, healthy, tasty and convenient food is successful: this market continues to grow. This is reflected in growth of 22% in the third quarter at Tree of Life Europe (TOL E), including 4% autonomous growth, and the progress made by our strong brands in Europe. Although the sales and results in the United States (US) as a whole were disappointing, even here we saw our sales in natural foods rise by 13%. That the Wellness consumer cares about convenience as well as health was evident from the strong performance of the Convenience Food Group (CFG) of which the result (EBITA) increased no less than 17%.

Amidst all these positive aspects, certain activities require further improvement, particularly in the US. After sealing the partnership with Wild Oats and losing two large customers, we are faced with a major operational challenge that is vigorously taken up. Sales at Wild Oats are already surpassing expectations. Also more than two hundred jobs have been shed to reduce costs. However, in view of the difficult market conditions resulting from the price pressure that the retail is exerting on us and our suppliers, we continue to take the measures that are necessary to improve the flexibility and efficiency of the organization. Part of this is the review of the investments we made in the IT system based on our experiences in the region where the system is operational as well as the changed requirements of the organization. This will result in a still to be confirmed one-off charge of approximately EUR 20 to 25 million.

Finally, an important step in the implementation of our strategy was made in the third quarter with the announcement of the sale of Leerdammer Company to Fromageries Bel at an attractive price of EUR 190 million. "


Wessanen expects the net sales for the last quarter of 2002 to be in line with the same quarter last year for the current activities. Besides lower results at Cereals, the results of Tree of Life North America (TOL NA) will be considerably less than the same period last year. This is expected to be only partly offset by better results at TOL E, CFG and Dairy Europe.

In the past quarter Wessanen announced the sale of Leerdammer Company. This is expected to result in a book profit of approximately EUR 100 million and to be closed in December. The partial write-off of the IT system of TOL NA as well as a reorganization of our Cereals activities in the United Kingdom will lead to a one-off charge of approximately EUR 30 million before taxes.

Wessanen maintains its outlook for 2002 and 2003 as stated with the publication of the half-year results in August 2002. This means for this year earnings per share of EUR 0.71, based on a net profit of EUR 50 million before goodwill amortization and exceptional income and expenses. This assumes a dollar rate of 0.98 to the Euro for the second half of 2002. For 2003 this means EUR 0.82 earnings per share.

Important dates

February 20, 2003: Publication of annual figures 2002 April 2, 2003: General Meeting of Shareholders May 14, 2003: Publication of quarterly figures Q1-2003 August 27, 2003: Publication of half-yearly figures 2003 November 21, 2003: Publication of quarterly figures Q3-2003

Company Profile

Koninklijke Wessanen nv is a Netherlands-based multinational food group operating in the European and North American markets. We market, distribute and produce wellness products that the consumer perceives to be natural and healthy, easy to prepare or tasty & indulgent. Knowledge of consumer trends and a clear emphasis on innovation form the basis for growth and continuity in all our businesses.

Third quarter results 2002 - Koninklijke Wessanen nv

All information about future developments is subject to change.

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