Sligro Food Group is performing in line with the forecasts made at the time of publication of the half-year results, despite the market and weather conditions in the third quarter.
Overall, therefore, we are still expecting a net result for the full year that is approximately 10% down on the 2004 figure. This is excluding the effect of the non-recurring income of €5.9 million after tax reported in the second half of 2004. The net result after tax in 2004, on an IFRS basis, amounted to €52.7 million excluding the non-recurring income and €58.6 million including exceptionals.
Sligro Food Group is relatively strongly represented, both directly and indirectly, in areas with a lot of tourism as regards both its food retail and foodservice activities. Sales were accordingly depressed, particularly in the months of July and August, owing to the poor weather. Turnover for the whole of the third quarter was therefore less buoyant than forecast.
The market generally continues to be characterised by pressure on prices, coupled with some decline in volume. This applies to both the food retail and the foodservice markets. Cost savings reduce the financial impact but, as previously warned, do not completely compensate for the effect.
The integration of wholesalers VEN Groothandelcentrum is going according to plan. The last two sites are due to be linked into the Sligro Food Group IT systems during November, allowing further streamlining of the organisation to take place and a start to be made with restoring the sales position. We are already seeing recovery in the cash-and-carry business at those outlets which have now been integrated for some time and where the merged features of the format are fully in place.
Considerable costs are being incurred in 2005 to complete the integration before the end of the year. This will result in impairment losses. Set against that, the change in the pension scheme, following amendment of the law, results in an incidental gain on pensions, the effects of which have been reflected in the results.
The turnover figures for 2005 will be released on 3 January 2006 and the full results for 2005 will be published on 26 January.
Sligro Food Group N.V. encompasses food service and food retail companies selling directly and indirectly to the entire Dutch food and beverage market. Sligro Food Group aims to be a dependable, high-quality company achieving managed growth in all its activities and for all its stakeholders. In 2004, the company achieved a turnover of €1,444 million. The number of employees, on a full-time equivalent basis, was almost 3,000.
Veghel, 20 October 2005
On behalf of the Executive Board of Sligro Food Group N.V.
A.J.L. Slippens
H.L. van Rozendaal
Tel: +31 413 34 35 00
www.sligrofoodgroup.com