Stock Exchange News 13.10.10 PRF: Consolidated sales turn-over of AS Premia Foods, III quarter 2010 and 9 months 2010 *** 3rd quarter *** The sales turn-over of AS Premia Foods in the third quarter 2010 was 363.5 million kroons, having grown by 58.9 million kroons, i.e. 19.3%, per year. Compared to the last year, the greatest growth, i.e. 98%, has been achieved in the sales of ice cream. The sales of ice cream formed 52% of the turn-over of the third quarter, whereas year ago the proportion of ice cream was 33%. Growth of sales volumes in this segment has been supported by favorable weather conditions in July and August and expansion of activities to the Russian market. Premia Foods continues as a market leader in the Baltic states, whereas in addition to the long-term leading position in the Estonian market, the company has according to the summer report by AC Nielsen, reached a leading position in the Lithuanian ice cream market for the first time. Market shares in the mentioned markets are respectively 40% and 21%. Second position is held in the Latvian and St. Petersburg's market. Ice cream market in the third quarter of 2010 may be characterized by evident preference of cream ice cream. The above-mentioned is evidenced by the non-competing first position of the cone ice cream „Eriti Rammus“ with the record-making 5.7% market share. The sales of frozen food products decreased in the third quarter by 10.3 million kroons compared to the last year's same period; however, the fall-behind of the frozen food products segment is, in comparison with the last year, decreasing for the second quarter in a row. The main reason for the fall-behind of the sales of frozen food products in the third quarter is the decreased purchase power and the access to fresh vegetables growing during summer season, due to which the consumption of frozen vegetables has decreased in all target markets. Continuously, the most of difficulties in this situation occur in Latvia where low purchase power and stable high unemployment rate continue having significant impact on internal food consumption. Additionally, as a contra-weight to retail chains the proportion of open markets has started to increase and in respect of vegetables garden-cultivation has been re‑discovered. At the same time, the decrease of price sensitivity and certain reviving in HoReCa segment in Estonian and Latvian frozen food markets, especially in meat products markets, may be noticed. The main reason for the drop in sales of fish products is the fire accident occurred in the company's Uusikaupunki's fish production unit in Finland, which mainly had impact on the sales of smoked fish products and compared to the last year's same period the sales of the product group in question decreased by 27 million kroons in the third quarter. In order to indemnify the damage caused by the fire, the Finnish subsidiary of AS Premia Foods Heimon Kala Oy and insurance company Fennia concluded an agreement, according to which the insurance company Fennia indemnified the occurred damage in the amount of 2.9 million euros. As from September the production of smoked fish products has been partially restored in Hämeenlinna, Finland, and the schedule of investments sets out reaching the full production capacity by the end of this year. The high price of raw fish has also had an impact on the sales of fresh fish in Estonia. Sales turn-over of Premia Foods in the third quarter of 2010 by business segments (in million kroons): -------------------------------------------------------------------------------- | | 2010 3rd quarter | 2009 3rd quarter | Change | -------------------------------------------------------------------------------- | Ice cream | 188.4 | 99.6 | +89.2% | -------------------------------------------------------------------------------- | Frozen products | 75.4 | 85.7 | -12.0% | -------------------------------------------------------------------------------- | Fish and fish | 93.5 | 113.4 | -17.5% | | products | | | | -------------------------------------------------------------------------------- | Other | 6.2 | 5.9 | +5.1% | -------------------------------------------------------------------------------- | Total | 363.5 | 304.6 | +19.3% | -------------------------------------------------------------------------------- Division of Premia Foods' business segments in percentages in the 3rd quarter 2010: -------------------------------------------------------------------------------- | | 2010 3rd quarter | 2009 3rd quarter | -------------------------------------------------------------------------------- | Ice cream | 51.8% | 32.7% | -------------------------------------------------------------------------------- | Frozen products | 20.8% | 28.2% | -------------------------------------------------------------------------------- | Fish and fish products | 25.7% | 37.2% | -------------------------------------------------------------------------------- | Other | 1.7% | 1.9% | -------------------------------------------------------------------------------- By geographic markets, compared to the last year's same period, positive growth tendency has been indicated in all three Baltic markets, whereas we are especially proud of 2.3% sales growth achieved in Latvia, which has mainly been brought about by sales of ice cream. The positive impact is reflected also in the sales numbers of Estonia and Lithuania. New products and brands brought to the market helped to stand against expansion of private labels. Successful marketing campaigns and new products helped Premia Foods in the third quarter to raise to the leading position in the highly competitive market of Lithuania where the closest competitor was left behind by 6%. The Finnish market turn-over was most influenced by the above-mentioned fire accident in the fish production unit producing smoked fish products. Innovative group of products “ISO-grilli” was successfully launched by the summer season, which received a warm welcome and was sold altogether for 13 million kroons. Premia Foods is continuously in the second position in the retail market of chilled packed fish products distributed under trademark “Heimon Gourmet”, holding 25% market share. The sales of ice cream in St. Petersburg market in Russia were successful in the third quarter and added additional turn-over of 66.8 million kroons to the company. Premia Foods continues to hold strong second position in the St. Petersburg market with its 22% market share, whereas all ice creams of OOO Khladkombinat No. 1 are cream ice creams and are produced following the GOST standard. Division of Premia Food's sales turn-over per geographical markets in the 3rd quarter 2010 (in million kroons): -------------------------------------------------------------------------------- | | 3rd | Proportio | 3rd quarter | Proportion | Change | | | quarter | n | 2009 | | | | | 2010 | | | | | -------------------------------------------------------------------------------- | Finland | 73.5 | 20.2% | 97.8 | 32.1% | -24.8% | -------------------------------------------------------------------------------- | Estonia | 113.3 | 31.2% | 100.1 | 32.9% | +13.2% | -------------------------------------------------------------------------------- | Latvia | 53.7 | 14.8% | 52.5 | 17.2% | +2.3% | -------------------------------------------------------------------------------- | Lithuania | 55.1 | 15.1% | 52.8 | 17.3% | +4.4% | -------------------------------------------------------------------------------- | Russia | 66.8 | 18.4% | 0 | 0 | N/A | -------------------------------------------------------------------------------- | Other | 1.1 | 0.3% | 1.4 | 0.5% | -21.4% | -------------------------------------------------------------------------------- *** 9 months 2010 *** The turn-over of AS Premia Foods in the first nine months was 930.9 million kroons, growing by 103.6 million kroons per year, i.e. by 12.5%. By segments, the ice cream segment has grown the most, which was influenced by favorable weather conditions lasting from the end of the second quarter until the midpoint of the third quarter and sales of ice cream of OOO Hladokombinat in the St. Petersburg market reflected in the financial results of Premia Foods as from May. Fall-behind in the sales volumes of frozen food products during the 9 months 2010 is occurred due to low purchase power and seasonality influencing the sales in the third quarter when the sales volumes of frozen vegetables decrease. The fish products segment does not indicate material fall-behind irrespectively to the high prices of raw fish and fire accident occurred in the Uusikaupunki production unit in May. Despite to the simultaneous influence of adverse factors, the result of the 9 months of 2010 is merely 0.9% lower than the same of the same period of 2009. Therefore, the fire accident in the Uusikaupunki production unit has not had material impact on Premia Foods and additionally it enabled to thoroughly analyze the effectiveness of all the fish segment's production units. As also referred in the company's stock exchange news, dated 28 September 2010, after thorough analysis ways for saving 3.1 million kroons rental fees by rearranging production were discovered. Sales turn-over of Premia Foods for January - September 2010 by business segments (in million kroons): -------------------------------------------------------------------------------- | | 9 months 2010 | 9 months 2009 | Change | -------------------------------------------------------------------------------- | Ice cream | 362.0 | 224.2 | +61.5% | -------------------------------------------------------------------------------- | Frozen products | 234.2 | 271.5 | -13.7% | -------------------------------------------------------------------------------- | Fish and fish | 319.9 | 322.9 | -0.9% | | products | | | | -------------------------------------------------------------------------------- | Other | 14.8 | 8.7 | +70.1% | -------------------------------------------------------------------------------- | Total | 930.9 | 827.3 | +12.5% | -------------------------------------------------------------------------------- Division of Premia Food's business segments in percentages for January - September 2010: -------------------------------------------------------------------------------- | | 9 months 2010 | 9 months 2009 | -------------------------------------------------------------------------------- | Ice cream | 38.9% | 27.1% | -------------------------------------------------------------------------------- | Frozen products | 25.1% | 32.8% | -------------------------------------------------------------------------------- | Fish and fish products | 34.4% | 39.0% | -------------------------------------------------------------------------------- | Other | 1.6% | 1.1% | -------------------------------------------------------------------------------- By geographic markets, very good results have been achieved in the Finnish market where despite to the simultaneous influence of many adverse factors the turn-over has, compared to the same period of last year, grown. This has greatly been influenced by the launching of “ISO-grilli” group of products, which being new and high additional value creating group of products added remarkable additional sales volume and helped to reduce the influence of the fire accident and large pressure to the prices of fish products creating low additional value. The best results of 9 months have been achieved in the Lithuanian market where active sales of ice cream and courageous actions taken in the frozen food segment have had an expected effect on growth of turn-over. The fall-behind of the Latvian market has occurred due to general poor situation and the achieved 10% fall-behind compared to the turn-over results of the 9 months of 2009 could be, bearing in mind the circumstances in that market, considered successful. The fall-behind of the Estonian market has occurred due to the low point of the market and also high prices of raw fish, which has had adverse effect on the sales of fish in the Estonian retail market. Russian results are reflected in the turn-over figures of the 9 months as from May and the period from May to September 2010 could be considered satisfying as the St. Petersburg's subsidiary OOO Khladokombinat complied with the ambitious targets set for this period. Division of Premia Food's sales turn-over per geographical markets for January - September 2010 (in million kroons): -------------------------------------------------------------------------------- | | 9 months | Proportio | 9 months | Proportion | Change | | | 2010 | n | 2009 | | | -------------------------------------------------------------------------------- | Finland | 285.4 | 30.7% | 273.3 | 33.1% | +4.4% | -------------------------------------------------------------------------------- | Estonia | 262.6 | 28.2% | 280.5 | 33.9% | -6.4% | -------------------------------------------------------------------------------- | Latvia | 135.1 | 14.5% | 149.9 | 18.1% | -9.9% | -------------------------------------------------------------------------------- | Lithuania | 124.6 | 13.4% | 117.8 | 14.2% | +5.8% | -------------------------------------------------------------------------------- | Russia | 121.1 | 13.0% | 0 | 0 | N/A | -------------------------------------------------------------------------------- | Other | 2.1 | 0.2% | 5.8 | 0.7% | -63.8% | -------------------------------------------------------------------------------- Additional information: Kuldar Leis Chairman of the Management Board +372 603 3800 kuldar.leis@premia.ee
PRF: Consolidated sales turn-over of AS Premia Foods, III quarter 2010 and 9 months 2010
| Source: PRFoods