United Biscuits: 2009 Half Year Statement

Hayes / UK. (ub) United Biscuits (UB) is pleased to provide an update on the company´s performance during the first half of 2009. The business continues to pursue a strategy of delivering sustainable performance on three fronts: financial, environmental and community. The company is making progress in all three areas despite the continuing economic recession, UB said in a statement.

Financial Sustainability

The first half of 2009 has presented challenging trading conditions with the struggling world economy denting consumer confidence. As a result of these external conditions, consumers are more acutely focused on seeking value. UB has sought to address this trend by offering consumers and customers an ever-broader range of snacks addressing different needs and offering different price points. In the first half of 2009, UB has been able to grow both its revenue, business profits and cash through delivering product innovation, investing behind effective promotional activity and continuing to drive cost saving programmes and working capital improvements. The company continues to deliver results in excess of its banking covenants.

Core snacking markets have for the most part remained resilient and grown steadily. Innovation has helped drive the growth of UB and the snack sector. The McVitie´s biscuits range has been a leading performer in the first half of 2009. UB achieved a technical breakthrough that allowed the company to achieve a 50 percent reduction in saturated fat across such top selling products as McVitie´s Digestives, McVitie´s Hobnobs, and McVitie´s Rich Tea whilst delivering the same great taste. Phileas Fogg was also relaunched in the UK in 2009, providing food explorers a chance to sample authentic flavours from around the globe. In Northern Europe, «Flavour of the Year» awards have been voted by a panel of consumers to new products launched under Delacre and BN brands.

UB has continued to strengthen its sales beyond the UK and Northern Europe. Selling in over 100 countries, the business has seen double-digit sales growth in its international markets, with strong performances in West Africa, Australia, and the Middle East. UB successfully acquired a manufacturing facility in India, in anticipation of a market launch. The business has brands and products with strong global appeal, and the company expects to see continued growth in international markets.

Environmental Sustainability

Reducing carbon emissions and energy use The UK has achieved a 24 percent reduction to date since 1995 and is currently tracking a further four percent reduction this year. In Northern Europe, UB has achieved a 25 percent reduction in emissions since 2000.

Reducing waste to landfill: UB is on track to reduce its waste to landfill by 40 percent this year with general waste recycling rates across all sites at their highest ever levels. Over 90 percent of all waste is currently recycled.

Reducing water use: During the first part of 2009 UB installed a water recycling plant at its Teesside factory. Teesside is by far the biggest water-using site where water is used for washing, transporting, peeling and slicing potatoes. This investment will enable UB to save approximately 400’000 cubic metres of fresh water per year, reducing UB´s water consumption by over 30 percent. This is on top of the 17 percent reduction in water consumption achieved in 2008.

Reducing packaging use: In January the business reduced the thickness of the film used for the majority of its snack bags by over 16 percent. This still maintains the high quality of the product but enables UB to reduce packaging by 200 tonnes per year.

Driving environmentally friendly transport: UB is on track to exceed the goal of a 22 percent reduction in transport emissions since 2002 by the end of 2009, three years ahead of the original target.

Increasing sustainable sourcing: UB has achieved a 40 percent reduction in palm oil use since 2005 and aims to increase this to 50 percent over the short term. UB has also committed to switching completely to fully sustainable palm oil by 2012.

Awards: As a result of its environmental progress, during the first half of 2009 UB was awarded a Big Tick Award by Business in the Community and further nominated for the Excellence award for environmental achievements. UB was also nominated in three categories of the Motor transport Awards, winning one, and was further nominated for a water saving award by the Environment Agency.