EANS-Adhoc: Valora Holding AG Valora Group reports stable results in the face
of demanding market conditions. Growth prospects favourable
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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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28.03.2012
Valora Group reports stable results in the face of demanding market conditions.
Growth prospects favourable
- External sales increased in 2011 - adjusted net revenues in line with 2010
levels
- Systematic implementation of Valora 4 Growth strategy continues
- Significant new initiatives taken to secure future growth
- Board to recommend unchanged dividend at 2012 Ordinary General Meeting
- Improvement on previous year´s results expected for 2012, despite further
acceleration of press volume decline and weak Swiss retail market
External sales increased in 2011 - adjusted net revenues in line with 2010
levels
In a year marked by major challenges for the Swiss retail sector, the Valora
Group increased its external sales (including franchisee turnover) by +0.5% to
CHF 2 961.9 million. In local currency terms and after adjusting for the
non-recurrence of 2010 football picture card sales, external sales were +6.3% up
on their 2010 levels. The Retail division turned in a positive performance,
expanding in all the national markets in which it operates. Valora Services,
conversely, was adversely affected by the sharp decline in the overall press
market. Valora Trade advanced substantially thanks to its acquisitions, though
its sales in Switzerland declined due to the strength of the Swiss franc and the
resulting increase in parallel imports by retailers.
The Valora Group´s reported operating profit for 2011 was CHF 70.5 million.
After adjusting for exchange rate fluctuations and the non-recurrence of
earnings from the distribution and sale of football picture cards from which it
benefited in 2010, Valora´s 2011 EBIT was CHF 0.4 million up on its previous
year´s level, which equates to an EBIT margin of 2.6%, slightly below the 2.7%
achieved in 2010.
The Group´s 2011 net profit was CHF 57.4 million (CHF 63.6 million in 2010).
Despite an acquisition-related financing requirement of some CHF 40 million,
Valora´s net debt remains modest, at
CHF 41.0 million. The successful completion of new syndicated loan facilities
and a new bond issue mean that the Group has the financing it will need to
support its operational business needs and its Valora 4 Growth strategy over the
next few years. With shareholders´ equity accounting for 41.9% of total assets,
Valora continues to maintain a sound balance sheet structure.
Divisions
Valora Retail further increases its profitability
Valora Retail successfully mastered the market challenges facing it in 2011,
further increasing its market share through a combination of organic and
acquisition-led growth. The division´s 2011 external sales totalled CHF 1 760.8
million, +4.9% up on their level a year earlier. Reported net revenues were CHF
1 613.2 million. Reported operating profit, at CHF 41.8 million, was CHF +0.1
million up on its 2010 level. Stripping out the effects of exchange rates and
the non-recurrence of 2010 football picture card earnings, Valora Retail´s 2011
operating profit advanced +11.1% on the year to CHF 4.4 million, which equates
to an EBIT margin of 2.7%, compared to 2.5% in 2010.
Valora Services - sharp contraction of press volumes
The Group´s Services division generated net revenues of CHF 599.7 million in
2011, -14.9% lower than a year earlier. The principal cause of this decline was
the sharp contraction of press volumes in all its country units, those in
Switzerland being the worst affected with a shortfall of -7%. Exchange rates
were an additional adverse factor, reducing the division´s revenues by CHF 19.2
million. Valora Services´ reported operating profit for 2011 was CHF 20.0
million, CHF 8.3 million lower than in 2010. After adjusting for exchange rate
and football picture card effects, Valora Services´ 2011 operating profit was
CHF 3.0 million lower than the year before. While the various cost-cutting
measures the division implemented and the new services it introduced
counteracted the effects of declining press volumes, they did not fully offset
them.
Valora Trade benefits from successful acquisitions
At CHF 744.5 million, the Trade division´s reported net revenues for 2011 were
+3.1% ahead of their 2010 levels, or +11.0% in local currency terms. Thanks to
their acquisitions of cosmetics distributors EMH and ScanCo, Trade Norway and
Trade Sweden achieved the most notable increases in local currency sales while
Trade Germany benefited from its acquisition of Salty Snacks Delicatessen. The
most demanding challenges in 2011 were those faced by the division´s Swiss
country unit, which came under increasing pressure from parallel imports by
retailers. Valora Trade´s reported operating profit for 2011 was CHF 16.3
million. In local currency terms, this equates to an improvement of CHF 0.2
million on 2010 levels.
Systematic implementation of Valora 4 Growth strategy continues
The Group made significant progress in the implementation of its Valora 4 Growth
(V4G) expansion strategy, paving the way for achievement of its objectives.
- The G1 (organic margin growth) initiatives have seen adoption of the agency
business model progress faster than originally planned, with 180 k kiosks now
operating as agencies. Profitability at these outlets has improved, with sales
growing an average of 3% while costs have declined by an average of 6%.
Implementation of centralised purchasing procedures has made it possible to
upgrade the contract and terms management system and increase professionalism in
this area of Valora´s operations.
- The G2 (organic revenue growth) initiatives are also achieving positive
results, particularly as far as enhancement of the Retail divison´s product mix
is concerned. Initial test results at the pilot site for the new k kiosk format,
for example, have seen food sales advance 15%. During 2012, the new k kiosk
format will be refined further and rolled out to additional sites. Valora´s
extension of the range of logistics services it offers, principally based on
exploiting its competitive advantages in start-of-day logistics, got off to a
good start with a major mandate for small package distribution and now already
has eleven mail order houses under contract. This service is meeting with
substantial customer demand and should prove effective in offsetting the effects
of declining press volumes over the next few years. Equally strong performance
is being achieved by Valora´s avec. convenience format, which is benefiting from
enhancements to store layout and the stores´ fresh produce and food product
ranges.
- On the G3 (acquisition-led growth at Retail/Services) front, transformation of
the tabacon outlets purchased in 2010 to Valora´s k kiosk format is progressing
well. Valora Retail´s 2012 acquisition of the outlets operated by Schmelzer
Bettenhausen, Austria´s leading railway station bookseller, marks the division´s
entry into the Austrian market. These stores, sited at major Austrian railway
stations and Vienna airport, will shortly be transformed to Valora´s successful
Press&Books (P&B) format.
- Implementation of the G4 (acquisition-led growth at Trade) initiatives saw
Valora Trade add cosmetics to its category porftolio through its acquisition of
cosmetics distributors EMH in Norway and ScanCo in Sweden, both attractive
companies. In Germany, Valora Trade´s acquisition of niche distributor Salty
Snacks Delicatessen enabled it to add the profitable savoury baked goods
category to its portfolio.
Significant new initiatives taken to secure future growth
2011 demonstrated that Valora is on the right track with its V4G strategy. The
initiatives defined in the plan are the right ones for achieving the growth and
sustained improvement in profitability Valora is targeting. The acquisition of
the Lekkerland subsidiary Convenience Concept with its 1 300 German outlets
represents a major milestone in this regard. The transaction significantly
strengthens Valora´s status as a micro-retailer not only in Germany itself but
throughout Europe´s German-speaking region as well. It also means that the
Group´s objective of operating more than 1 000 kiosks in Germany by 2015 has
already been reached in early 2012. Acquisitions of additional travel retail
formats remain a strategic focus. Valora Trade has purchased three excellent
companies and will continue to pursue a strategy of adding further profitable
categories to its portfolio in future. Regional expansion of the division´s
classical trade business, conversely, will be ascribed a lower priority in the
short term, given the weakness of consumer confidence, and initiatives here
will, for the time being, be pursued on an opportunistic basis only. In
aggregate, Valora expects its strategic initiatives to increase consolidated
external sales to some CHF 3.9 billion by 2015, with operating profit projected
in the CHF 110 million to CHF 130 million range.
Board to recommend unchanged dividend at 2012 Ordinary General Meeting
At the Ordinary General Meeting to be held on April 19, 2012, Valora´s Board of
Directors will recommend a dividend of CHF 11.50 per share. Once again,
shareholders will also be given the opportunity of casting a consultative vote
on the remuneration report for the most recent financial year. All Board members
will stand for re-election.
Improvement on previous year´s results expected for 2012, despite further
acceleration of press volume decline and weak Swiss retail market
Across European markets, but particularly in Switzerland, business conditions
affecting Valora´s core business will remain very challenging in 2012. The
further acceleration in the decline of the press market is impacting both the
Services and the Retail divisions. This is a factor over which Valora can
exercise little influence, as indeed is the weakness of retail spending in
Switzerland, itself exacerbated by the strength of the Swiss franc and the
ongoing shopping tourism in which Swiss consumers are engaging. Despite the
adverse effects which these conditions will continue to exert, it is Valora´s
objective to increase its operating profit above 2011 levels this year. In the
words of Thomas Vollmoeller, Valora´s CEO, "We are on the right trajectory with
our V4G strategy, and this has enabled us to secure a basis from which to
achieve our medium-term growth objectives."
Valora Group key financial data
Income statement
in CHF million 2011 2010
External sales 2`961.9 2`946.5
Adjusted* external sales 3`093.4 2`909.2
Net revenues 2`817.9 2`877.7
Adjusted* net revenues 2`936.4 2`840.4
Gross profit 876.4 875.2
Gross profit margin 31.1% 30.4%
Operating costs, net -805.9 -793.9
Operating profit (EBIT) 70.5 81.3
EBIT margin 2.5% 2.8%
Adjusted* operating profit (EBIT) 75.8 75.4
Adjusted* EBIT margin 2.6% 2.7%
Group net profit 57.4 63.6
* Adjusted for currency fluctuations and World Cup 2010 picture cards
Liquidity, balance sheet
in CHF million 31.12.2011 31.12.2010
Cash and cash equivalents 109.6 130.5
Shareholders´ equity 462.3 478.1
Equity cover 41.9% 43.6%
Net debt 41.0 14.1
Valora divisions´ key financial data
Key metrics Retail Services Trade
in CHF million 2011 2010 +/- 2011 2010 +/- 2011 2010 +/-
External sales1 1,760.8 1`678.8+4.9%
Adjusted* external
sales1 1,819.0 1`669.1+9.0%
Net revenues1 1,613.2 1`606.5+0.4% 599.7 705.1-14.9% 744.5 721.8 3.1%
Adjusted* net
revenues1 1,658.3 1´596.9+3.8% 618.9 677.5-8.6% 801.2 721.8+11.0%
Operating profit
(EBIT) 41.8 41.7+0.2% 20.0 28.3-29.6% 16.3 17.7 -7.9%
Adjusted* operating
profit (EBIT) 44.1 39.7+11.1% 21.4 24.5-12.4% 17.9 17.7 +1.1%
EBIT margin 2.6% 2.6%+0.0pP 3.3% 4.0%-0.7pP 2.2% 2.5%-0.3pP
Adjusted* EBIT
margin 2.7% 2.5%+0.2pP 3.5% 3.6%-0.1pP 2.2% 2.5%-0.3pP
* Adjusted for currency fluctuations and World Cup 2010 picture cards |
1) before inter-company eliminations
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The following documents are available on www.valora.com
Annual Report 2011
http://www.valora.com/media/documents/english/reports/2011/valora_gb2011_en_gesamt.pdf
Press release
http://www.valora.com/en/media/newsinformation/news_00437.php
2011 results presentation
http://www.valora.com/media/documents/english/presentations/2011/valora_gb2011_en_praesentation.pdf
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Valora Telephone Conference - Analysts´ and Media Conference 2012
Wednesday, March 28, 2012 | 15:00 CET
Thomas Vollmoeller, CEO of Valora Holding AG, and Lorenzo Trezzini, CFO, will
provide information about the Group´s 2011 results during a telephone
conference. This dial-in conference call will be held in English.
To participate in the conference: call the following number
(please call 10 to 15 minutes before the hour):
+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 and will remain
accessible for 24 hours thereafter (till the same time on March 29th, 2012).
Participants wishing to listen to the digital playback should dial:
+41 (0) 91 612 43 30 (Europe)
+44 (0) 207 108 62 33 (UK)
+ 1 (1) 866 416 25 58 (USA)
and should enter the code 13443 followed by the # sign when prompted.
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Disclaimer
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES
THIS DOCUMENT IS NOT BEING ISSUED IN THE UNITED STATES OF AMERICA AND SHOULD NOT
BE DISTRIBUTED TO U.S. PERSONS OR PUBLICATIONS WITH A GENERAL CIRCULATION IN THE
UNITED STATES. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO
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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PERSONS ABSENT REGISTRATION UNDER OR AN APPLICABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE UNITED STATES SECURITIES LAWS
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: Main Standard: SIX Swiss Exchange, stock market: BX Berne eXchange
language: English