Operating profit from ordinary operations up 21,5% for 2005
IMPACT OF CHANGES IN SCOPE ON PROFIT FOR THE PERIOD
The rise in profits for 2005 is partly due to the proportional consolidation of DFP (a French company in which the group has 50% ownership) and the full consolidation of Monti Food (a South African company the group acquired in the last quarter). Together, these businesses provided turnover of €14.1 million, and operating profit from ordinary operations of €0.4 million.
NUTRITION BUSINESS IN FRANCE RETURNS TO NORMAL
Thanks to a diverse product mix and the promising start made by Nutréa (a joint venture with Unicopa that currently leads the regional market in the west of France), the group was able to withstand the general decline in the French domestic market last year.Raw material price terms and conditions returned to normal in 2005, helping the group to rebuild its margins.The group also pursued its strategy of optimising the operating cost structure last year, closing a production plant that was running at a loss. In 2006, the group will complete efforts to rationalise administrative functions.
ANIMAL HEALTH BUSINESSES SHOW RESILIANCE
In a highly competitive market, the Group’s animal health businesses resisted relatively well.
ENCOURAGING PERFORMANCES AT THE INTERNATIONAL LEVEL
At the international level, the group once again posted satisfactory performance levels:
- Brazil: The turnaround in operations continues. Brazil’s contribution to operating profit from ordinary operations was €1.3 million in 2005, versus €0.3 million in 2004.
- Eastern Europe: The discontinuation of unprofitable outsourcing activities in Poland led to a decline in turnover, which fell to €19.8 million. However, the development of premix and specialty lines throughout the region offset this decrease, boosting operating profit from the region’s ordinary operations to €1.3 million (up from €0.3 million in 2004).
- Asia: Thanks to the strong performance from its porcine and aquaculture business lines in Vietnam, the group reported turnover of €37.3 million and operating profit from ordinary operations of €2.7 million (+14% and +25%, respectively), despite the adverse impact of bird flu on operations in Indonesia.
- Other regions: The group’s performance was satisfactory elsewhere, attesting to its ability to achieve profitable growth abroad.
DIVIDEND
In light of these results and the significant rise in the Evialis stock price over the period, the Board of Directors will recommend that shareholders approve a dividend payout of €1 per share at their annual meeting on 30 May 2006.
OUTLOOK FOR 2006
The bird flu epidemic, whose magnitude and ultimate impact remain difficult to assess at this time, will have an effect on Group turnover and profit. However, as a specialist in animal health and nutrition that is not involved in related downstream activities, combined with the diversity of the species for which it manufactures feed, EVIALIS’s exposure to this risk is real but limited.
Despite the difficult backdrop, EVIALIS expects the turnaround that began in 2005 to continue this year as it pursues efforts to optimise its French business lines and further develop abroad through a balanced blend of organic and external growth.
SHAREHOLDERS
The BNP Paribas group reminded the Board that its 63.2% equity interest in EVIALIS is a purely financial investment, and stated its intention to gradually reduce its shareholding to below the 50% threshold, market conditions permitting.
NEXT PRESS RELEASE FOR EVIALIS: 2006 first quarter turnover (9 May 2006)