Wimm-Bill-Dann Foods OJSC Announces 3 Months 2003 Financial Results; Steady Growth in the Dairy Segment, Juice on Track towards Recovery.
Business Editors
UK REGULATORY NEWS
MOSCOW, Russia--(BUSINESS WIRE)--June 23, 2003--
Wimm-Bill-Dann Foods OJSC (NYSE: WBD) today announced its financial
results for the first quarter of 2003.
During the first quarter of 2003, Wimm-Bill-Dann's sales increased by
13.4% compared to the first quarter of 2002. Gross profit increased by
16.3%, with gross margins rising to 29.3% compared to 28.6% last year.
Net income decreased by 26%, primarily due to the combined effect of a
temporary slowdown in juice sales growth as well as costs associated
with expansion in the dairy segment. EBITDA showed a slight decrease
year-on-year.
Commenting on the announcement, Sergei Plastinin, CEO of
Wimm-Bill-Dann Foods OJSC, said; "The first three months of this year
saw continued growth in sales and improvement in gross margins. Over
recent months, we have developed and launched a number of programmes
such as better supply chain management, newly designed IT
infrastructure and investment in technology and new equipment to
enhance operational cycle and improve our cost structure. We are also
in the process of improving our brand and product portfolio, launching
new products and increasing the efficiency of our distribution and
sales channels."
Key Operating and Financial Indicators of Q1 2003
Q1 Q1 Change
2003 2002
-------------------
Sales volumes, thousand tons 374.1 338.0 10.7%
US$ US$
'mln 'mln
Sales 223.9 197.4 13.4%
Dairy 159.0 136.2 16.7%
Juice 64.9 61.2 6.0%
Gross Profit 65.7 56.5 16.3%
Selling and distribution expenses (32.2)(21.8) 47.7%
General and administrative expenses (17.7)(14.9) 18.8%
Operating income 14.6 18.4 (20.7)%
Financial income and expenses, net (4.7) (4.6) 2.2%
Net income 7.1 9.6 (26)%
EBITDA 21.6 21.8 (0.9)%
CAPEX including acquisitions 27.4 15.5 77%
In the first three months of 2003, Wimm-Bill-Dann's sales amounted to
US$223.9 million, compared to US$197.4 million during the same period
last year.
Sales in Wimm-Bill-Dann's dairy segment in the first quarter increased
by 16.7% from US$136.2 million in 2002 to US$159 million in 2003.
Gross margins in the dairy sector grew to 26.7% from 25.4% last year
due to a 5% drop in the cost of raw milk compared to last year,
favorable price increases for sterilized milk and a higher share of
value-added products in the product portfolio.
Sales in Wimm-Bill-Dann's juice segment increased by 6% from US$61.2
million in the first quarter of 2002 to US$64.9 million in the first
quarter of 2003. Although sales slowed down in the first quarter
following an exceptionally strong fourth quarter, we were able to
improve our average price by 4.4% compared to the previous quarter.
Pricing and volume growth were partially offset by increases in the
cost of raw materials and the increased share of lower priced brands
in the overall product portfolio. Gross margins in the juice division
remained flat at 36%, the same as last year.
The company's increased geographical coverage and investments in brand
promotion continued to be the main cost drivers. Selling and
distribution costs increased substantially, from US$21.8 million
during the first quarter of 2002 to US$32.2 million this year. During
the first three months of 2003, US$9.5 million was spent on the
personnel portion of selling and distribution expenses, and US$10
million on marketing and advertising, US$6.8 million on transportation
costs and US$1.2 million on warehousing.
During the first three months of 2003, general and administrative
expenses were US$17.7 million. Net income decreased from last year and
was US$7.1 million. EBITDA decreased slightly to US$21.6 compared to
US$21.8 million during the first three months of 2002.
Reconciliation of EBITDA to US GAAP Income before provision for
income taxes and minority interest
Q1 2003 Q1 2002
Income before provision for income taxes
and minority interest 9,861 13,800
Interest expense 5,223 4,752
Depreciation and Amortization 6,537 3,199
------- --------
EBITDA $21,621 $ 21,751
======= ========
WIMM-BILL-DANN FOODS
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE
THREE MONTHS ENDED MARCH 31, 2003 AND 2002
(Amounts in thousands of U.S. dollars,
except share and per share data)
Three Three
months months
ended ended
March 31, March 31,
2003 2002
----------- -----------
(unaudited) (unaudited)
----------- -----------
SALES $ 223,866 $ 197,427
COST OF SALES (158,177) (140,955)
----------- -----------
Gross profit 65,689 56,472
SELLING AND DISTRIBUTION EXPENSES (32,248) (21,755)
GENERAL AND ADMINISTRATIVE EXPENSES (17,706) (14,905)
OTHER OPERATING EXPENSES (1,147) (1,376)
----------- -----------
Operating income 14,588 18,436
FINANCIAL INCOME AND EXPENSES, NET (4,727) (4,636)
----------- -----------
Income before provision for income taxes
and minority interest 9,861 13,800
PROVISION FOR INCOME TAXES (2,589) (3,404)
MINORITY INTEREST (215) (832)
----------- -----------
----------- -----------
NET INCOME $ 7,057 $ 9,564
----------- -----------
Earnings per share - basic and diluted: $ 0.16 $ 0.24
Weighted average number of shares outstanding 44,000,000 39,500,000
WIMM-BILL-DANN FOODS
CONSOLIDATED BALANCE SHEETS AS OF
MARCH 31, 2003 AND DECEMBER 31, 2002
(Amounts in thousands of U.S. dollars)
March 31, December
2003 31, 2002
----------- ---------
CURRENT ASSETS: (unaudited) (audited)
----------- ---------
Cash and cash equivalents $ 18,603 $ 29,340
Trade receivables, net 63,539 60,146
Inventory, net 82,085 86,063
Taxes receivable 77,370 68,352
Advances paid 23,883 10,811
Net investment in direct financing leases 1,254 1,338
Deferred tax asset 2,040 1,850
Other current assets 5,356 5,810
----------- ---------
Total current assets 274,130 263,710
PROPERTY, PLANT AND EQUIPMENT, net 315,804 293,580
INTANGIBLE ASSETS 2,764 2,736
GOODWILL 21,516 19,885
NET INVESTMENT IN DIRECT FINANCING LEASES
- long-term portion 4,023 4,381
INVESTMENTS 2,152 1,989
OTHER LONG-TERM ASSETS 1,248 2,812
----------- ---------
Total long-term assets 347,507 325,383
----------- ---------
Total assets $ 621,637 $ 589,093
=========== =========
CURRENT LIABILITIES:
Trade accounts payable $ 51,078 $ 40,144
Advances received 4,133 3,905
Short-term loans 94,684 94,050
Long-term loans, current portion 2,012 2,483
Bonds payable 16,303 16,096
Taxes payable 18,982 15,551
Accrued liabilities 8,606 8,346
Government grants - current portion 2,059 2,033
Other payables 33,027 25,770
----------- ---------
Total current liabilities 230,884 208,378
LONG-TERM LIABILITIES:
Long-term loans 4,163 4,546
Other long-term payable 54,383 55,047
Government grants - long-term portion 8,184 8,568
Deferred taxes 11,212 8,121
----------- ---------
Total long-term liabilities 77,942 76,282
----------- ---------
Total liabilities 308,826 284,660
----------- ---------
MINORITY INTEREST 22,042 21,549
----------- ---------
SHAREHOLDERS' EQUITY:
Common stock 29,908 29,908
Share premium account 164,132 164,132
Currency translation adjustment 828 -
Retained earnings 95,901 88,844
----------- ---------
Total shareholders' equity $ 290,769 $ 282,884
----------- ---------
Total liabilities and shareholders' equity $ 621,637 $ 589,093
=========== =========
WIMM-BILL-DANN FOODS
CONSOLIDATED CASH FLOW STATEMENT FOR THE
THREE MONTHS ENDED
MARCH 31, 2003 AND 2002
(Amounts in thousands of U.S. dollars)
Three Three
Months Months
ended ended
March 31, March 31,
2003 2002
----------- -----------
(unaudited) (unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 7,057 $ 9,564
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortisation 6,537 3,199
Bad debt and inventories provisions 1,572 109
Other adjustments (916) 1,050
Changes in operating assets and liabilities:
Decrease in inventories 4,780 17,173
Increase in trade accounts receivable (3,903) (2,303)
Increase in advances paid (12,822) (10,206)
Increase in taxes receivable (8,301) (1,653)
Decrease in other current assets 595 1,370
Increase in trade accounts payable 10,328 4,066
Increase in advances received 176 1,402
Increase in taxes payable 3,488 3,028
Increase (decrease) in accrued liabilities 152 (657)
Increase in other current payables 1,156 2,058
Decrease in other long-term payables (96) (90)
----------- -----------
Total cash provided by operating activities 9,803 28,110
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for acquisitions of subsidiaries,
net of cash acquired $ (492)$ (192)
Cash paid for property, plant and equipment (16,497) (15,545)
Cash paid for net investments in direct
financing leases (48) (84)
Cash paid for acquisitions of investments - (416)
Proceeds from disposal of investments and
property, plant and
equipment 697 -
Cash paid for other long-term assets - (5,687)
Total cash used in investing activities (16,340) (21,924)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of capital stock,
net of direct expenses - 162,048
Government grants received - 786
Repayment in short-term loans (574) (34,389)
Repayment of long term payables (2,970) -
Proceeds from long-term loans - 7,000
Repayment of long-term loans (936) (6,086)
----------- -----------
Total cash (used in) provided by financing
activities (4,480) 129,359
----------- -----------
Total cash (used in) provided by operating,
investing and financing activities (11,017) 135,545
Impact of exchange rate differences on cash
and cash equivalents 280 (309)
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH
EQUIVALENTS (10,737) 135,236
CASH AND CASH EQUIVALENTS, at beginning of
period 29,340 6,919
----------- -----------
CASH AND CASH EQUIVALENTS, at end of period $ 18,603 $ 142,155
=========== ===========
Some of the information contained in this press release may contain
projections or other forward-looking statements regarding future
events or the future financial performance of Wimm-Bill-Dann Foods
OJSC, as defined in the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. We wish to caution you that
these statements are only predictions and that actual events or
results may differ materially. We do not intend to update these
statements to conform them to actual results. We refer you to the
documents Wimm-Bill-Dann Foods OJSC files from time to time with the
U.S. Securities and Exchange Commission, specifically, the Company's
most recent Form 20-F. These documents contain and identify important
factors, including those contained in the section captioned "Risk
Factors" in our Form 20-F, that could cause the actual results to
differ materially from those contained in our projections or
forward-looking statements, including, among others, potential
fluctuations in quarterly results, and risks associated with our
competitive environment, acquisition strategy, ability to develop new
products or maintain market share, brand and company image, operating
in Russia, volatility of stock price, financial risk management, and
future growth.
NOTES TO EDITORS
Wimm-Bill-Dann Foods OJSC is a leading manufacturer of dairy and juice
products in Russia. The company was founded in 1992.
The company currently owns 23 manufacturing facilities in 19 locations
in Russia and the Commonwealth of Independent States (CIS), as well as
affiliates in 26 cities in Russia and the CIS. The company also
distributes its products in Canada, Germany, Israel, the Netherlands,
the UK and the United States, through both its own distribution
network and independent distributors. Wimm-Bill-Dann has a strong and
diversified branded portfolio with over 1,100 types of dairy products
and over 170 types of juice, nectars and still drinks. The company
currently employs over 18,000 people.
Wimm-Bill-Dann was rated second best out of 42 firms in terms of
transparency in the S&P survey of leading Russian companies, and was
rated fourth best in the latest Brunswick UBS Warburg survey of
corporate governance in Russia.
Wimm-Bill-Dann was awarded best European Equity Deal of 2002 by
Euroweek and Institutional Investor magazines.
Short Name: Wimm-Bill-Dann Foods OJSC
Category Code: QRF
Sequence Number: XXXXXXXX
Time of Receipt (offset from UTC): 20030623T115556+0100
--30--SM/uk*
CONTACT: Wimm-Bill-Dann
Kira Kiryuhina,
Public Relations Department
Tel: +7 095 733 9726
Email: kira@wbd.ru
or
Shared Value Ltd
Edward Baumgartner
Tel: +44 207 321 5037
Mobile: +44 781 579 6506
Email: ebaumgartner@sharedvalue.net
KEYWORD: RUSSIA INTERNATIONAL EUROPE
INDUSTRY KEYWORD: SUPERMARKETS RESTAURANTS RETAIL FOODS/BEVERAGES
EARNINGS
SOURCE: Wimm-Bill-Dann Foods
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