Sligro Food Group half-year prospects
Like-for-like growth in turnover at Sligro Food Group was better than expected in the first quarter.
Food retail activities saw modest growth. The trend in turnover at both EM-TÉ and the Golff and MeerMarkt formats was positive, which is a clear improvement compared with the second half of 2004. We expect a similar trend in the second quarter.
The food service activities saw higher like-for-like growth, supported to some extent by investment in the branch network. This growth will decline in the second quarter, however, because of the unexpected loss of a major customer. We expect to be able to offset the effects of this during the second half of the year through cost savings and increased turnover from new and existing customers.
Sales performance and the result at VEN Groothandelcentrum (acquired in October 2004) were less favourable than we had earlier assumed. This will have an adverse effect on the group result for the first half year.
Market conditions for all of our activities are still challenging. The price war in the supermarket channel and volume reductions in the food service channel have put margins under pressure.
In summary, as a result of the above, we expect a fall in net profit of some 10% in the first half of the year compared with the same period in 2004. The net profit for the first half of 2004 was €20.4 million under IFRS compared with €18.9 million under Dutch GAAP.
The half-year figures will be published on 21 July 2005 when, as usual, the prospects for the second half of 2005 will also be addressed.
Veghel, 21 April 2005
On behalf of the Executive Board of Sligro Food Group N.V.
A.J.L. Slippens
H.L. van Rozendaal
Tel. +31 413 34350
www.sligrofoodgroup.com
