Net profit 2007 : 5 M€ (+ 28,2 %)

Strong increase in revenue linked to raw materials prices

Group revenue for 2007 amounts to €759 M, an increase of 19.1%.

The contribution of acquisitions on revenue is €26.5 M : Bernaqua in Belgium and Zoofort In Brazil have reinforced the feed activity, whereas Rossovit In Russia and the business bought from Nutreco in France have consolidated the Group’s position in Premix-specialties.
 
On a like-for-like basis, revenue totals €738 M, an increase of 15.9%. This progression reflects the significant price rises in raw materials, and especially concerning cereals, but also the 15% increase in volumes generated by the « Nutrition International » division.

Foreign exchange losses, mainly relating to South Africa and Vietnam set this revenue figure back by some €5.6M.

Increase in gross profit over the 2nd half-year

Gross profit is €208 M, representing a growth of 7% and €202.3 M on a like-for-like basis. This progression came from the second half of the year, during which the repercussion of high prices was felt across all links in the food production chain, which justified price increases in the Nutrition France division, partly compensating for the first six-month period.

Increase in operating profit from ordinary operations of 12.3% on a like-for like basis

Operating profit from ordinary operations comes to €8.2M and €9.5 M on a like-for-like basis, which is an increase of 12.3 % over 2006. Over and above the impact of raw materials on gross profit, this performance reflects the following :

• the fruits of hard work carried out by the French teams to improve productivity ; the gradual reduction of brand names, a project which became operational during the second half of the year, the closing of two factories, and a simplification of legal structures. These factors contributed to lessen the negative impact coming from the price rises in raw materials ;
• the continuing good progression in volumes in Vietnam as well as the permanent turn-around of the Brazilian subsidiary ;
• one-off charges linked to the industrial integration of Nutreco’s French activities within the Group’s Premix division. This consolidating operation has proved to be successful from a commercial point of view. The enhanced volume that has come from this integration has made this division market leader in France ;
• The increase in the R&D budget which went ahead in spite of recessional market conditions.  The development has mainly been at an international level, notably in Vietnam, with the inauguration of the largest private aquaculture research center in the country.

Operating profit for 2007 comes out at €6.5 M, compared with €7.9M for the previous year. It takes into account the cost of the progressive amortization of brand names and their repositioning under the EVIALIS banner, which is partly compensated for by profits from asset disposals.

Consolidated net profit up to 28%

After a financial cost of €3.5 M, current profit before tax amounts to €.3M. Above all, it is helped by an exceptional tax gain of €2 M, resulting from the legal simplification of the Nutrition France division and the continuing turn-around of several foreign subsidiaries. 
In progression by 28% over the 2006 reporting period, consolidated net profit for 2007  amounts to 5M€.

Borrowings under control

Working capital requirements remains under control in terms of number of days of revenue (21). On the other hand, its value has increased due to increase in stock value, industrial investments notably in China and Romania as well as external growth operations (Belgium, Brazil, Russia, Premix France), even if this has been partly compensated for by the disposals of non-utilized assets, bringing net borrowings to €71.3M.

With gearing of 71%, EVIALIS has the necessary financial means to proceed with its strategic project centered on international development.

Outlook

As far as raw materials are concerned, market prices remain high, confirming the structural, lasting and worldwide aspects of this phenomenon. All the same, the current developments in the financial markets and world economies are contributing to the high volatility of rates, necessitating a prudent approach on our position taking.

This new context confirms the pertinence and market edge of the Group’s technological expertise which has been reinforced by a number of achievements made within R&D and formulation developments in compound feed and premix.

Moreover, in spite of the technical rebound that the French market has witnessed in 2007, the acceleration of the development of the world market is being confirmed in developing countries ; for the long-standing future of the Group’s activities, a rebalancing of the spread needs to be biased towards the international markets.

All of these current structural developments (rise in raw materials prices, health and safety regulations…) or future ones (accelerated reforms of the CAP, WTO agreements…) comfort and confirm the strategic orientations that the Group has chosen, based on : 

• Innovation, offering the stockbreeders optimal nutritional and economical solutions.
• Internationalization through organic or external growth, to capture growth where the markets are making strong progress.
• Optimization of the French base to capitalize on a market demanding excellence.

EVIALIS WILL ANNOUNCE ITS REVENUE FOR Q1 2008 ON
6 MAY 2008