Erik Højsholt Direct line: +45 8730 6102 Fax: +45 8730 6002 erik.hojsholt@aarhusunited.com 2004-05-24 1st Quarter Report 2004 Aarhus United A/S CVR no. 45 95 49 19 Stock exchange announcement no. 12/2004 Contact persons: Erik Højsholt, Group CEO Esben Vibe, Group CFO Telephone: +45 8730 6102 Telephone: +45 8730 6215 Mobile phone: +45 2010 6580 Mobile phone: +45 4010 4103 The announcement can be found at Aarhus United s website: www.aarhusunited.com Requests for a copy can be directed to investor@aarhusunited.com Visit Aarhus United s Investor Relations section at the address: www.aarhusunited.com/investors This is a translation into English in case of variations, the original version in Danish will apply. Aarhus United A/S M. P. Bruuns Gade 27 DK-8000 Aarhus C Denmark Tel.: +45 8730 6000 Fax: +45 8730 6012 Telex: 64341 palmf dk dk.info@aarhusunited.com www.aarhusunited.com CVR no. 4595 4919
Aarhus United A/S 1 st quarter report 2004 2004-05-24 1 st quarter report 2004 On Monday 24 May 2004, the Board of Directors of Aarhus United A/S considered and approved the report for the first quarter of 2004. Highlights Consolidated profits of DKK 27 million improved significantly over the profits for the first quarter of 2003, which amounted to DKK 19 million. The improvement was primarily due to significantly higher contributions from Aarhus United Mexico and Aarhus United UK, which more than compensated for the marginally lower profits achieved by Aarhus United USA and Aarhus United Denmark, compared with last year. The lower exchange rates applied in converting the results in foreign currencies into Danish kroner exerted a negative effect of DKK 3 million on the profit. Ignoring the exchange rate effect, the improvement thus totalled marginally more than DKK 10 million relative to the first quarter of last year. All the four production companies achieved better than expected results for the first quarter of 2004. Other subsidiaries and associates performed largely as anticipated. Total net margin amounted to DKK 230 million for the first quarter of 2004, compared with DKK 229 million in the same period last year. The lower exchange rates applied in converting the profits of the foreign subsidiaries into Danish kroner exerted a negative effect on the total net margin of DKK 14 million. Operating income amounted to DKK 45 million for the first quarter of 2004, compared with DKK 39 million for the same period in 2003 an improvement of DKK 6 million. In particular, the subsidiaries in Mexico and the United Kingdom made good progress. In the strategic focus area chocolate and other confectionery vegetable fats volume sales continued to improve, but due to declining margins per kg, net margin remained at last year s level. Bulk vegetable oil net margins continued to be under pressure by severe price competition. Despite larger volume sales, Danish kroner net margins declined, relative to the same period last year. Compared with budgets, bulk vegetable oil net margins were marginally higher than anticipated. Return on invested capital was 8.5% for the first quarter of 2004, compared with 7.2% for the same period in 2003. Side 2 af 4
Aarhus United A/S 1 st quarter report 2004 2004-05-24 Capital and reserves were adjusted upwards by DKK 36 million due to higher exchange rates. In the Danish company Aarhus United Denmark the improvement relative to budgets was mainly due to reduced expenditure, whereas Aarhus United Mexico has improved its competitive power due to optimised raw material purchasing and enhanced efficiency in production and thus increased its volume sales. The work of BSP Pharma is progressing according to schedule. As regards the arthritis or eczema products, an agreement is expected to be made with a partner before the end of 2004. The results of the clinical studies on the psoriasis and herpes simplex products are expected to be available by the end of the third quarter of 2004. Own shareholdings numbered 133,973 on 24 May 2004 equivalent to 3.3% of the share capital. As at 31 March 2004, the market value of the shares was DKK 19 million above cost. Outlook for the full year Based on their first quarter results, Aarhus United Mexico, Aarhus United UK and Aarhus United Denmark have revised their profit forecasts upwards, whereas Aarhus United USA have provided unchanged full year profit forecasts. The latest forecast profit for the full year includes a higher contribution from the associate United Plantations Berhad due to the high palm oil price level. Only to a limited degree, income from the BSP Pharma segment is included in the expectations for the full year of 2004. As the total result of the four production companies in Denmark, the UK, the USA and Mexico is likely to improve, consolidated profits are expected to amount to DKK 180-200 million, before tax, and DKK 120-140 million, after tax, for the full year. Compared with the previous stock exchange announcement (no. 5/2004 dated 8 March), this is an upward revision of DKK 20 million. Consolidated operating income for the full year is now expected to amount to DKK 190-210 million, compared with the previously announced DKK 170-190 million. The upward revision of Aarhus United UK s profit forecast includes a DKK 7 million profit on the sale of the Rowallan factory in Scotland, which was closed down. Production has been moved to new facilities in Hull. Side 3 af 4
Aarhus United A/S 1 st quarter report 2004 2004-05-24 The forecast also includes a profit of approximately DKK 20 million on Aarhus United Denmark s sale of silos. Up to now, the silos have been leased out, but the lease-holder would like to take over the facilities. It should be noted that this profit was included in the forecast stated in announcement no. 5/2004 and has had no effect on the upward revision stated in this announcement. Based on unchanged raw material prices and higher volume sales, we expect the revenue to become marginally higher in 2004 than in 2003 when the revenue, expressed in Danish kroner, amounted to DKK 4.5 billion. Kjeld Ranum Chairman Erik Højsholt Group CEO Appendices: 1. Consolidated key figures and ratios 2. Income statement 3. Balance sheet 4. Cash flow statement 5. Key figures and ratios for the production companies Side 4 af 4
Consolidated key figures and ratios App 1 January-March Full year DKK million 2004 2003 2003 Revenue 1,121.7 1,225.5 4,485.1 Net margin 230.0 228.9 922.7 Operating income before depreciation (EBITDA) 77.6 72.4 287.1 Operating income (EBIT) 45.5 39.2 153.1 Profits from investments in associates, before tax 9.8 12.7 53.9 Net interest expenses -12.9-20.7-64.6 Profit on ordinary activities, before tax and minority interests 42.4 31.2 142.4 Profit for the period 26.6 19.4 87.8 Total assets 3,439.5 3,319.1 3,257.9 Capital and reserves, end of period 1,329.2 1,379.3 1,274.2 Capital investments 35.9 21.5 117.0 Depreciation 32.1 33.1 134.0 Profit margin ratio 4.1% 3.2% 3.4% Equity ratio 38.6% 41.6% 39.1% Return on invested capital 8.5% 7.2% 7.2% Average no. of shares (1,000 shares) 4,000 4,000 4,000 End-of-period market price 321 269 313 Equity value per share 332 345 319 Earnings per share 6.66 4.86 21.94 Movements in capital and reserves: Capital and reserves as at 1 January 1,274.2 1,423.9 1,423.9 Change in accounting policies 0.8 Profit for the period 26.6 19.4 87.8 Dividends paid -48.0 Exchange adjustments in subsidaries and associates 35.7-61.5-180.1 Adjustment of capital and reserves in subsidiaries and associates -15.2 Dividend on treasury shares and acquisition/allocation of employee shares 5.3 Adjustment of financial instruments -7.3-2.5-0.3 Total movements 55.0-44.6-149.7 Capital and reserves, end of period 1,329.2 1,379.3 1,274.2
Group income statement App 2 1 January-31 March 1 Jan-31 Dec DKK million 2004 2003 2003 2002 Revenue 1,121.7 1,225.5 4,485.1 4,885.5 Raw materials 805.0 918.7 3,200.3 3,491.5 Value added 316.7 306.8 1,284.8 1,394.0 Direct production overheads 86.7 78.0 362.1 358.6 Net margin 230.0 228.8 922.7 1,035.4 Indirect production overheads 120.7 123.6 494.5 523.9 Distribution costs 29.3 33.2 126.6 135.3 Administrative expenses 34.2 33.2 133.5 149.9 Other operating income -0.3 0.4-15.0 4.8 Operating income 45.5 39.2 153.1 231.1 Pre-tax profits from investments in subsidiaries and associates 9.8 12.7 53.9 37.4 Net interest expenses 12.9 20.7 64.6 78.9 Pre-tax profit on ordinary activities 42.4 31.2 142.4 189.6 Tax on profit for the year 10.8 7.6 33.8 28.4 Tax on profits from investments in subsidiaries and associates 2.9 3.7 17.4 13.9 Profit on ordinary activities 28.7 19.9 91.2 147.3 Minority shareholders' proportion of the profit 2.1 0.5 3.4 2.9 Profit for the period 26.6 19.4 87.8 144.4 Percentage distribution for the 1st quarter of 2004 The groups' strategic companies and business segments Total Net margin AUDK AUUK AUUS AUMX DKKm Speciality fats 77% 10% 62% 38% 105 Bulk oils 20% 37% 31% 62% 67 Foodservice 50% 33 Cosmetics and dietary supplements 3% 2 Others 3% 7% 4 Total 100% 100% 100% 100% Total DKKm 97 67 22 25 211
Balance sheet App 3 ASSETS March December March December DKK million 2004 2003 2003 2002 Intangible assets 24.3 22.4 18.6 11.0 Property, plant and equipment 1,180.7 1,150.6 1,212.4 1,264.7 Investments in associates 406.1 398.6 453.0 470.7 Loans guaranteed by related parties 53.7 54.8 Other securities 22.5 21.7 4.3 7.4 Tax asset 48.7 45.6 27.1 27.7 Investments and other assets 477.3 465.9 538.1 560.6 TOTAL NONCURRENT ASSETS 1,682.3 1,638.9 1,769.1 1,836.3 Total inventories 765.0 723.6 656.6 641.5 Trade receivables and other receivables 866.0 740.2 772.5 795.4 Listed securities 13.3 9.6 4.8 8.4 Cash at bank and in hand 112.9 145.6 116.1 102.3 TOTAL CURRENT ASSETS 1,757.2 1,619.0 1,550.0 1,547.6 TOTAL ASSETS 3,439.5 3,257.9 3,319.1 3,383.9 LIABILITIES March December March December DKK million 2004 2003 2003 2002 Capital and reserves 1,329.2 1,274.2 1,379.3 1,424.7 Minority shareholders 41.3 38.7 42.0 51.5 Deferred tax and pension obligations 71.8 62.8 69.2 73.3 Long-term bank loans and mortgage debt 925.0 798.4 882.8 868.3 Short-term bank loans and mortgage debt 584.4 607.8 565.8 566.5 Trade payables 487.8 476.0 380.0 399.6 Total current liabilities 1,072.2 1,083.8 945.8 966.1 TOTAL LIABILITIES 3,439.5 3,257.9 3,319.1 3,383.9
Cash flow statement App 4 1 jan-31 Mar Full year DKK million 2004 2003 Cash flows from operating activities Operating income 45 153 Depreciation 32 134 Decrease (Increase) in inventories -41-82 Decrease (Increase) in receivables -126 37 Increase (Decrease) in payables 12 76 Increase (Decrease) in hedging instruments value -7 Interest income (expenses), net -13-65 Dividends received 8 16 Tax paid -5-41 Net cash from operating activities -95 228 Cash flow from investing activities Investments in intangible assets -2-12 Investments in property, plant and equipment -36-105 Investments in subsidiaries, associates and other financial assets 40 Net cash used in investing activities -38-77 Net cash flows from operating and investing activities -133 151 Cash flows from financing activities etc. Increase (Decrease) in minority shareholders' share 3-13 Increase (Decrease) in long-term loans 127-70 Dividends to shareholders in parent company -48 Treasury shares 5 Minority shareholders' share of losses (profits) -2-3 Exchange adjustments -19 Net cash provided by financing activities etc. 128-148 Net increase (decrease) in cash -5 3 Net cash and cash equivalents at year-start -453-456 Net cash and cash equivalents at year-end -458-453 Net cash and cash equivalents comprise listed securities and cash at bank and in hand less short- term bank loans and mortgage debt.
Key figures and ratios for the production companies App 5 Aarhus United Denmark January-March Full year DKK million 2004 2003 2003 Revenue 374.1 356.9 1,394.0 Net margin 97.0 99.8 370.2 Operating income before depreciation (EBITDA) 28.4 32.0 110.1 Operating income (EBIT) 13.6 18.9 58.6 Pre-tax profit on ordinary activities 8.5 13.9 41.5 Profit for the period 6.1 9.7 29.1 Capital investments 14.4 8.2 71.9 Capital and reserves at year-end 462.6 505.1 527.6 Total assets at year-end 1,234.8 1,051.9 1,106.7 Profit margin ratio 3.6% 5.3% 4.2% Return on invested capital 5.8% 8.7% 6.7% Total business volume (tonnes) 46,303 45,124 176,852 Aarhus United UK January-March Full year DKK million 2004 2003 2003 Revenue 424.2 426.1 1,825.8 Net margin 66.6 63.6 291.3 Operating income before depreciation (EBITDA) 25.4 21.8 119.3 Operating income (EBIT) 14.5 9.2 68.0 Pre-tax profit on ordinary activities 12.0 6.6 55.8 Profit for the period 8.5 4.7 38.3 Capital investments 4.8 7.3 18.6 Capital and reserves at year-end 404.7 397.2 375.2 Total assets at year-end 828.1 815.9 780.4 Profit margin ratio 3.4% 2.2% 3.7% Return on invested capital (ROIC) 8.8% 5.3% 10.7% Total business volume (tonnes) 76,647 75,491 351,101
Aarhus United USA January-March Full year DKK million 2004 2003 2003 Revenue 119.1 143.4 529.2 Net margin 22.5 27.9 106.7 Operating income before depreciation (EBITDA) 7.7 10.6 36.2 Operating income (EBIT) 5.5 7.2 25.3 Pre-tax profit on ordinary activities 5.1 6.8 23.8 Profit for the period 3.0 4.1 12.2 Capital investments 14.4 4.3 11.3 Capital and reserves at year-end 200.8 213.0 193.3 Total assets at year-end 284.5 321.0 281.5 Profit margin ratio 4.6% 5.0% 4.8% Return on invested capital 9.7% 10.7% 10.1% Total business volume (tonnes) 28,515 29,435 113,051 Aarhus United Mexico January-March Full year DKK million 2004 2003 2003 Revenue 159.0 123.5 551.0 Net margin 24.7 17.0 74.1 Operating income before depreciation (EBITDA) 15.1 6.9 34.9 Operating income (EBIT) 12.5 3.8 23.8 Pre-tax profit on ordinary activities 9.5-0.7 9.7 Profit for the period 5.7-0.4 5.8 Aarhus United's proportion of profit 5.0-0.4 5.1 Capital investments 1.8 1.6 3.4 Capital and reserves at year-end 127.0 134.8 118.7 Aarhus United's proportion of capital and reserves at year-end 111.7 118.3 104.4 Total assets at year-end 339.9 331.6 326.6 Profit margin ratio 7.9% 3.1% 4.3% Return on invested capital 19.3% 5.4% 8.4% Total business volume (tonnes) 36,871 27,862 123,824