Bakkavör: Operating profit down 36 percent in H1/2008

Reykjavik / IS. (bk) «The Group´s half year results are in line with our expectations with sales performance starting to improve in Q2/2008», says Ágúst Gudmundsson, Chief Executive Officer of the Islandic Bakkavör Group: «The Group´s profitability continued to be affected by ongoing increases in raw material and utility costs, compounded by the strength of the Euro against the pound, strategic business restructuring, the downturn in consumer confidence as well as unsettled summer weather in the UK». Details:

• Turnover 803 million GBP in H1, up eleven percent and 425,7 million GBP in Q2, up 14 percent
• Growth in like-for-like sales in underlying business 0,5 percent in H1 and 2,5 percent in Q2
• EBITDA 58,5 million GBP in H1, down 23 percent, and 32,2 in Q2, down 21 percent, including restructuring costs of 3,1 million GBP
• EBITDA margin 7,3 percent in H1 and 7,6 percent in Q2 (7,7 percent in H1 and 8,3 percent in Q2, excluding restructuring costs)
• Operating profit (EBIT) 36,4 million GBP in H1, down 36 percent, and 20,5 in Q2, down 35 percent
• Loss on the Group´s economic interest in 10,9 percent shareholding in Greencore Group PLC under CFD 46,2 million GBP in H1, thereof 30,4 million GBP in Q2
• Cash flow from operating activities 15,5 million GBP in H1, down 75 percent, and 19,8 million GBP, down 40 percent, in Q2
• Return on equity 7,3 percent, excluding loss on other financial assets, compared with 20,3 percent in H1 2007
• Earnings per share 0,4 pence in H1 excluding loss on other financial assets
• Strengthened global position with five acquisitions in the half year – in the United States, China, Italy and two in Hong Kong, in addition to the acquisition of the remaining 49 percent in Heli Food Fresh in the Czech Republic
• Acquisition of Fram Foods S.A, the French subsidiary of Fram Foods hf. in July

Gudmundsson: «In Q1 we announced that we had taken an economic interest in Greencore Group. In the period, Greencore Group´s share price fell sharply which affected our profits significantly. However, we remain confident in this strategic holding, which reflects our commitment to the fresh prepared foods sector. We believe Greencore Group is well-placed to build on its strong market position and deliver long-term value for its shareholders.

Looking ahead, the trading environment is expected to remain tough in the second half of the year and we will continue to focus on driving market share growth, recovering inflationary costs, improving operational efficiencies and restructuring parts of the business where necessary. This is expected to have a positive impact on sales and profit performance in 2009» (press release).