Bakkavör: sales growth despite tough climate in Q1/2009

Reykjavik / IS. (bkg) Icelandic Bakkavör Group, the United Kingdom´s largest producer of fresh prepared food and ready meals, published its Financial Statement Release for the results in the first quarter 2009. Sales grew nine percent despite tough climate. EBITDA expected to grow around 15 percent on 2008 to 125 million GBP. Cash benefits from restructuring start in Q2/2009 and grow significantly in the year. Summary:

• Turnover 410 million GBP in Q1, up nine percent.
• Like-for-like (constant currency) sales growth up one percent on Q1/2008.
• EBITDA 18,7 million GBP in Q1/2009, down 29 percent. EBITDA margin 4,6 percent, compared to 7,0 percent in Q1 2008.
• Loss for the period amounted to £8.1 million GBP in 2009 compared with a loss of £12.8 million GBP in Q1/2008.
• Cash inflow from operations, excluding one-off cash outflows relating to restructuring costs, 1,3 million GBP in Q1/2009, compared to a cash inflow of 6,4 million GBP in Q1/2008.
• Trading in Q2 started strongly with management forecasting an increase in EBITDA of around 15 percent for the full year 2009.

Chief Executive Ágúst Gudmundsson: «We have achieved good sales growth in the quarter relative to the economic situation, underpinned by our operational flexibility, market share gains in the UK, and strong performance in our European, Asia and US operations. This positive growth demonstrates the defensive nature and sustainability of our business in times of global recession and we anticipate sales growth will remain positive despite the economic downturn.

We expect Q1/2009 to mark the last period of year-on-year decline in EBITDA with the impact of disruption from restructuring coming to an end and our actions to mitigate inflationary costs, improve operational efficiencies and capacity utilisation now starting to deliver improved profits to the business. By the end of 2009 we expect our EBITDA to grow by around 15 percent to 125 million GBP. We will start to see cash benefits in Q2/2009 deriving from the extensive restructuring activities we initiated in 2008 and expect cash generation to grow significantly in the year».