06 de November de 2012

Presentation of the results of the third quarter of 2012

Deoleo raised its EBITDA by 31%, thus consolidating the improvement in the company’s profitability

  • In the third quarter of the year, its BDI was positive at 2.9 million euros, even though the result of the nine months as a whole is still being affected by the extraordinary expenditures.
  • The financial debt dropped to 599 million euros, which entails a 63 million euro decrease compared to 2011..
  • Sales stood at 627 million euros, 12.9% less than in the same period the previous year due to the drop in the cost of raw materials and the absence of volumes of brand and bulk distribution.
  • • For financial year 2012, Deoleo estimates total sales of 866 million euros and an EBITDA of 88 million euros.

Madrid, 6 November 2012.– In the third quarter of the year, Deoleo, the world olive oil leader, earned an after-tax profit of 2.9 million euros, although the results of the year as a whole are still being affected by the extraordinary expenditures in the first quarter and stands at -1.26 million euros in the first nine months of 2012. This figure is substantially under the -4.8 million euros from the same period in 2011

In the first nine months of this year, sales stood at 627 million euros, 12.9% less than in the same period the previous year due to the drop in the cost of raw materials and the absence of volumes of brand and bulk distribution.

In turn, it is worth noting that the EBITDA reached 62.4 million euros, compared to 47.7 million the previous year, a 31% rise, thus consolidating the improvement in margins and efficiency measures undertaken throughout 2011. Thus, Deoleo’s profitability has risen substantially from an EBITDA/sales ratio of 6.6% in 2011 to 10.0% so far this year, and all of this in the wake of a 54.4% rise in advertising investment.

Forecast for financial year 2012

The group estimates that the EBITDA for 2012 as a whole will reach 89 million euros and will land at above 10% over sales, with notable rises in advertising spending compared to the previous year. Likewise, the net financial debt is expected to stand at 620 million euros by the end of the financial year..

Evolution in the sector

In Spain, the market in the first nine months of the year is still complicated, although in the last quarter the evolution has been positive and the downswing experienced in the first part of the year has been halted.

The price of lampante olive oil has risen 48% during the third quarter of 2012. The average price for lampante oil was 6.7% higher than in the first nine months of 2011, while the annual average price of extra virgin oil is 2.5% higher in 2012.

The source of this rise is the expectations for the new harvest, which is expected to be smaller than the previous year’s due to the drought.

Starting in August, there has been a major increase in the price of olive oil at origin which will set the tone for the evolution during the fourth quarter of 2012.

In the domestic market, the prices of sunflower oil have risen by 5.6% during the first nine months of the year, although compared to the same period in 2011 the average price has been 0.8% lower.

Financial situation

On the 30th of September of this year, the group’s net financial debt was 599 million euros, which entails a 63 million euro decrease compared to 2011. The positive evolution in the debt is largely due to a reduction in working capital. However, this figure is seasonal since the working capital is predicted to rise in the fourth quarter due to the rise in the prices of olive oil at origin in the past few months.

In addition to this agreement, Deoleo has taken the decision to submit a buy-back offer of the 1,312 preference shares issued by the subsidiary Deoleo Preferentes SAU that did not participate in the exchange in December 2010. This means that the company will offer the preference shareholders interested in it the possibility of purchasing their shares and turning them into stock in the group. To do this, it will undertake a capital expansion excluding pre-emptive subscription rights. For the preference shareholders, this exchange entails attaining total liquidity for their investment.

Likewise, Deoleo is moving forward in its adjustment plans aimed at improving the efficiency of the business and boosting its profitability. To this end, the group has decreased its staff by 61% in the past two years, moving from 2,149 employees in 2010 to 840 in September of this year.

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