EANS-Adhoc: Valora Holding AG Valora Group reports good results in a difficult
market
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ad-hoc disclosure transmitted by euro adhoc with the aim of a Europe-wide
distribution. The issuer is solely responsible for the content of this
announcement.
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6-month report
25.08.2011
Valora Group reports good results in a difficult market
- Adjusted external sales and net revenues advance 9.3% and 4.8% respectively
versus H1 2010
- Adjusted operating profit margin raised by +24.0%
- Net earnings improve by +1.4%
- Implementation of growth strategy progressing successfully
> Organic margin and sales growth at Retail division
> Acquisition-led expansion at Valora Trade
with further potential for H2 2011
- Outlook: previously announced objectives confirmed
Adjusted external sales and net revenues advance 9.3% and 4.8% respectively
versus H1 2010
Valora closed the first six months of 2011 with consolidated external sales
(including franchisee revenues) totalling CHF 1,473 million, an increase of 1.6%
on the same period of last year. After adjusting for the effects of
non-recurring revenues from football picture cards and exchange-rate
fluctuations, the Group´s external sales rose an impressive 9.3%. Valora´s
published first-half net revenues came in at CHF 1,397.6 million, -2.4% below
the CHF 1,431.9 million generated last time. After adjusting for football card
and exchange-rate factors, net revenues amounted to CHF 1,459.9 million, 4.8% up
on their level a year earlier.
The Group´s Retail division performed well in the first half of the year,
increasing its external sales by CHF 63 million, or some 8%, to CHF 874.6
million. Tabacon Franchise GmbH, acquired in 2010, made a positive contribution
to this result. Published net revenues for the first six months of 2011 rose
0.7% to CHF 797.4 million. When comparing this with the division´s first-half
2010 result, it should be remembered that the figures for the 2010 figure
included sales of football picture cards. In addition, Valora Retail´s
first-half 2011 sales were significantly reduced by the rapid and substantial
appreciation of the Swiss franc during that period. Stripping out the effect of
these two factors, the division´s net revenues for the first six months of 2011
rose 5% to CHF 822.0 million. Retail Germany, avec. and kiosk Switzerland were
the business units principally driving the encouraging performance the division
achieved in the face of generally difficult retail market conditions.
Valora Services generated net revenues of CHF 310.3 million, down from CHF 369.4
million in the same period of 2010. Adjusting for football card and
exchange-rate effects reduces this decline to -5.6%. This downtrend in sales had
already begun to manifest itself in the closing months of 2010 and continued
unabated throughout the first six months of this year.
In an intensely competitive market, Valora Trade posted good results for the
first six months of 2011, raising its published net revenues by 4% to CHF 362.8
million. In local currency terms, net revenues advanced by 12.1% on their
first-half 2010 levels. The division´s two acquisitions, the cosmetics
distributor EMH (purchased in autumn 2010) and Salty Snacks in Germany
(purchased in spring 2011) were successfully integrated and, as anticipated, are
both making very positive contributions to the division´s turnover. While sales
at the division´s units in Switzerland (-8.4%) and Austria (-7.3%) declined,
Valora Trade Denmark increased turnover by 5.6% and Valora Trade Finland by
12.6%.
Adjusted operating profit margin raised by +24.0%
During the first six months of 2011, the Valora Group raised its consolidated
gross profit margin from 30.3% to 30.7%. This improvement is principally due to
enhancements made to product ranges and changes in the sales channel mix as the
number of franchisee outlets increased. At the operating profit level, the
Group´s published EBIT for first-half 2011 amounted to CHF 33.4 million, putting
the consolidated EBIT margin at 2.4%. After stripping out the adverse impact of
exchange rate moves (CHF 3 million) and non-recurring football card profits (CHF
6.3 million), Valora raised its operating profit by +24% and its adjusted EBIT
margin to 2.5%, versus 2.1% a year earlier. This equates to a 0.4 percentage
point increase in the Group´s sustainable profitability.
At the divisional level, Valora Retail increased its published EBIT to CHF 19.2
million and improved its EBIT margin to 2.4%. After stripping out picture card
and exchange-rate effects, the division boosted its adjusted operating profit by
some 65%, to CHF 20.6 million, which equates to an adjusted EBIT margin of 2.5%.
Valora Services generated a published operating profit of CHF 10.0 million,
versus CHF 19.5 million in the first six months of 2010. This decline is
principally the result of non-recurring football card revenues, adverse
exchange-rate effects and the sharp contraction of the overall press market.
After adjusting for football card and exchange-rate factors, Valora Services´
EBIT margin in first-half 2011 was 3.4%. Despite the significant reduction the
division achieved in its staff costs, this result is unsatisfactory and below
the target range of 4-5%. Further increases in efficiency levels and additional
revenues from new services should enable the division to get its operating
results back on target. Valora Trade raised its published operating profit by
CHF 1.9 million, or 38.6%, to CHF 7.0 million, while improving its EBIT margin
to 1.9%. After adjusting for the adverse impact of exchange rate movements, the
division´s operating profit rose by 54.2%, thus raising its adjusted EBIT margin
to 2.0%. This improved operating profit result is particularly gratifying, since
recent acquisitions have also increased the division´s operating costs.
Net earnings improve by +1.4%
Valora´s net profit for the first six months of 2011 totalled CHF 26.3 million,
compared to CHF 26 million in the same period of last year. In spite of the
higher dividend pay-out, equity covered increased by 0.5 percentage points to
reach 44.1% of total assets. Due to deadline-related investments in net working
capital, Valora´s net debt at June 30, 2011 was CHF 76.9 million, CHF 62.8
million higher than at year-end 2010.
Implementation of growth strategy progressing successfully
In November 2010, the Valora Group presented its "Valora 4 Growth" expansion
strategy. The overall objective of the strategy´s four growth initiatives is to
enhance operational excellence and to achieve sustained organic and
acquisition-led sales and margin growth during the period to 2015.
Organic margin and sales growth despite difficult market conditions
During the first six months of 2011, the Valora Group achieved both organic
growth in its external sales and an initial and significant improvement in
margins. This improvement is mainly the result of product range adjustments,
further streamlining of the cost base, enhanced gross profit margins and the
emphasis placed on developing agency and franchise business models. Organic
growth in external sales (excluding the effects of exchange rates, football
picture cards and acquisitions) was close to 1%.
Acquisition-led expansion at Valora Trade with further potential for H2 2011
Valora´s purchases of Salty Snacks in Germany in March 2011 and of Scandinavian
Cosmetics in Sweden in July 2011 have enabled the Group to acquire two highly
successful distribution companies. Valora currently estimates these companies´
contribution to annual net revenues to be of the order of CHF 85 million. This
is congruent with the Trade division´s objective of expanding its operations as
largest pan-European distributor by 2015. In Valora´s Retail/Services business
area, whose acquisition-related focus is on profitable growth in Germany
(through kiosks) and new European formats, a number of promising negotiations
are currently under way. Management is confident of achieving the objectives it
has set for 2011.
Outlook: previously announced objectives confirmed
The results achieved in 2011 to date and the progress made in implementing the
Group´s strategy provide a sound basis for achieving the defined "Valora 4
Growth" objectives.
Despite the steep decline of the overall press market and the present currency
configuration, which has also been an adverse factor for Valora, management
remains confident that the Group will achieve the objectives it has set for
2011, absent a further deterioration in exchange rates or consumer sentiment or
a sharper-than-expected decline in the overall press market. Valora´s management
also reconfirms its goal, initially formulated in November 2010, of raising the
Group´s operating profit margin to 3.0% to 3.5% in 2012. This is based on
projected 2012 EBIT of CHF 110-130 million and external sales of some CHF 3.7
billion, calculated on the basis of the anticipated EUR/CHF exchange rate of
1.35 budgeted for at that time. As Thomas Vollmoeller, Valora Holding AG´s CEO,
puts it, "Despite adverse market conditions we have achieved good results in the
first six months of 2011. We will remain focused on implementing our strategy
and are convinced that Valora continues to offer sound value to its
stakeholders, even in these turbulent times".
Valora Group key financial data
Income statement
in CHF million H1 2011 H1 2010
External sales 1 473.0 1 450.0
Adjusted external sales* 1 542.6 1 411.7
Net revenues 1 397.6 1 431.9
Adjusted net revenues* 1 459.9 1 393.5
Gross profit 429.6 433.7
Gross profit margin 30.7% 30.3%
Operating costs -401.3 -402.4
Operating profit (EBIT) 33.4 35.7
Adjusted operating profit (EBIT) * 36.5 29.4
EBIT margin 2.4% 2.5%
Adjusted EBIT margin* 2.5% 2.1%
Consolidated net profit 26.3 26.0
* Adjusted for exchange-rate and World Cup 2010 picture card effects
Liquidity, balance sheet
in CHF million 30.06.2011 31.12.2010
Cash and cash equivalents 82.6 130.5
Shareholders´ equity 467.3 478.1
Equity cover 44.1% 43.6%
Net debt 76.9 14.1
Key financial metrics for Valora divisions
Key metrics Retail Services Trade
in CHF million H1 2011 H1 2010 +/- H1 2011 H1 2010 +/- H1 2011 H1 2010 +/-
External sales 874.6 811.6 +7.8%
Adjusted external sales*
906.5 802.3 +13.0%
Net revenues 797.4 792.0 +0.7% 310.3 369.4 -16.0% 362.8 348.8 +4.0%
Adjusted net revenues*
822.0 782.6 +5.0% 321.2 340.4 -5.6% 391.1 348.8 +12.1%
Operating profit(EBIT)
19.2 14.6 +31.4% 10.0 19.5 -48.8% 7.0 5.1 +38.6%
Adjusted operating profit (EBIT) *
20.6 12.6 +64.5% 10.8 15.3 -29.5% 7.8 5.1 +54.2%
EBIT margin 2.4% 1.8% +0.6pP 3.2% 5.3% -2.1pP 1.9% 1.5% +0.4pP
Adjusted EBIT margin*
2.5% 1.6% +0.9pP 3.4% 4.5% -1.1pP 2.0% 1.5% +0.5pP
* Adjusted for exchange-rate and World Cup 2010 picture card effects
The following documentation is available for download on www.valora.com
Half-year report 2011
http://www.valora.com/media/documents/english/reports/2011/halbjahresbericht_2011_en.pdf
Media release
http://www.valora.com/en/media/newsinformation/news_00387.php
Presentation on first-half 2011
resultshttp://www.valora.com/media/documents/english/presentations/2011/praes_halbjahresabschluss_2011_en.pdf
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Valora Telephone Conference - Analysts´ and Media Conference First-half 2011
Thursday, August 25, 2011 | 14.00 CET (German) | 15:00 CET (English)
Thomas Vollmoeller, CEO of Valora Holding AG, and Lorenzo Trezzini, CFO, will
provide information about the Valora Group´s First-half 2011 results during a
telephone conference.
To participate in the conference: please call the following number (please call
10 to 15 minutes before the stated starting time):
+41 (0) 91 610 56 00 (Europe)
+44 (0) 203 059 58 62 (UK)
+1 (1) 866 291 41 66 (USA - toll-free)
The playback will be available one hour after the conference for 24 hours till
August 26th, 2011. To access the digital playback, please dial:
+41 (0) 91 612 43 30 (Europe)
+44 (0) 207 108 62 33 (UK)
+1 (1) 866 416 25 58 (USA)
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SUBSCRIBE FOR OR PURCHASE ANY SECURITIES. IN ADDITION, THE SECURITIES OF VALORA
HOLDING AG HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES LAWS AND
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This document contains forward-looking statements about Valora which may
incorporate an element of uncertainty and risk. The reader must therefore be
aware that such statements may diverge from actual future events. These
forward-looking statements are projections relating to future possible
developments. All the forward-looking statements contained in this document are
based on data available to Valora at the time this document was prepared. Valora
makes no commitment whatsoever to update forward-looking statements in this
document at a later date, or to adapt them to reflect new information, future
events or the like.
Further inquiry note:
Investor Relations: Tel: +41 58 789 12 20
Mladen Tomic E-Mail: mladen.tomic@valora.com
Media Relations: Tel: +41 58 789 12 01
Stefania Misteli E-Mail: stefania.misteli@valora.com
end of announcement euro adhoc
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issuer: Valora Holding AG
Hofackerstrasse 40
CH-4132 Muttenz
phone: +41 61 467 20 20
FAX: +41 58 789 12 12
mail: info@valora.com
WWW: www.valora.com
sector: Retail
ISIN: CH0002088976
indexes:
stockmarkets: stock market: BX Berne eXchange, Main Standard: SIX Swiss Exchange
language: English