During the first 9 months of 2002, Wimm-Bill-Dann’s sales increased by 20.3% compared to the same period of last year. Gross margins grew by 3.2% compared to the first nine months of 2001, which has been made possible by the lower cost of raw milk and economies of scale. At the same time, there has been an anticipated growth in sales and distribution expenses. Strong growth was demonstrated on the operating income level, at 8.7% year-on-year, and net income grew by 2.6% compared to the first nine months of 2001. EBITDA also demonstrated a positive trend, going up by 11.1%.
Sergei Plastinin, CEO of Wimm-Bill-Dann Foods OJSC, said: “We have been actively pursuing growth, and plan to keep expanding in the future. At the same time, we intend to contain various cost elements by being more creative on the advertising front, further improving our approach to supply chain management, enhancing our IT infrastructure and closely monitoring our costs on an ongoing basis.”
Key Operating and Financial Indicators of 9m 2002
For the 9m 2002, Wimm-Bill-Dann sales amounted to US$592.4 million compared to US$492.5 million in the 9m 2001.
Sales in Wimm-Bill-Dann’s Dairy Segment grew by 14.0% from US$356.8 million in 9m 2001 to US$406.6 million in 9m 2002, which is primarily due to an enhanced regional presence and natural growth of the segment mostly through volume growth.
Sales in Wimm-Bill-Dann’s Juice Segment increased 36.9% from US$135.7 million in the 9m 2001 to US$185.7 million in the 9m 2002, primarily as a result of sales volume increase.
The overall gross margins showed an increase of 3.2% primarily due to the lower cost of raw milk. Other factors, such as better terms with suppliers and economies of scale, also contributed to this positive tendency.
Selling and distribution expenses increased year-on-year in 9m 2002 due to higher transportation and warehousing costs, advertising and marketing expenses and personnel expenses.
Establishing a proprietary distribution network as a result of regional expansion, accompanied by the increase in transportation tariffs, played a significant role in the overall cost increase. Furthermore, new warehousing facilities were leased to satisfy growth in volumes. Personnel costs grew both from overall wage increases in Russia and increased number of employees caused by regional expansion.
In response to a more competitive advertising environment, we deliberately increased our advertising and marketing budget as a percentage of sales, in an effort to increase our brand awareness and improve our positioning. Soaring TV advertising rates, which, according to the market statistics, rose approximately 50% year-on-year, also contributed to the growth of this expense category.
General and administrative expenses, including personnel and professional services, increased compared to the same period of last year by 17.4%, primarily as a result of higher requirements imposed upon us as a public company.
EBITDA demonstrated a positive trend of 11.1% increase as compared to the first 9 months of 2001. EBITDA margin was 12.2%.
The company’s management will discuss its nine months 2002 results in a conference call on December 4, 2002 at 5 pm Moscow time (9 am EDT in New York). Please refer to the attached list for details of the call.
WIMM-BILL-DANN FOODS
CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
AND SEPTEMBER 30, 2002 (UNAUDITED)
(Amounts in thousands of U.S. dollars)
CONSOLIDATED AND COMBINED BALANCE SHEETS
AS OF DECEMBER 31, 2001 AND SEPTEMBER 30, 2002 (UNAUDITED)
NET INVESTMENT IN DIRECT FINANCING LEASES
–long-term portion
CONSOLIDATED AND COMBINED CASH FLOW STATEMENTS
Net cash provided by operating activities associated with
continuing operations
9,871
,871
18,372
Net cash used in operating activities associated withNet cash used in operating activities associated with
discontinued operations
AND SEPTEMBER 30, 2002 (UNAUDITED) (CONTINUED)
Net cash used in investing activities associated with continuing
operations
Net cash used in investing activities associated with
Net cash provided by financing activities associated with
Net cash used in financing activities associated with
CONFERENCE CALL DETAILS
A conference call to discuss the results will be held at 09.00 New York time / 14.00 London time / 17.00 Moscow time, on Wednesday, December 4, 2002.The UK dial-in number is: +44 20 8240 8242 and US dial-in number is +1 303 713 7929 participants should quote ‘Wimm-Bill-Dann’.Please dial in 5 minutes prior to the start of the conference call to allow time for registration.A recording of the conference call will be available for one week, commencing one hour after the live call has finished, on +44 20 8288 4459 (UK) and, +1 703 736 7336.Access code for both calls:709712.
Wimm-Bill-Dann Foods OJSC16 Yauzsky Boulevard, Moscow, RussiaPhone: +7 095 733-97-26/9727Fax: +7 095 733-97-25web: http://www.wbd.comE-mail: kagan@wbd.ru
Some of the information in this press release may contain projections or other forward-looking statements regarding future events or the future financial performance of Wimm-Bill-Dann, as defined in the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. We wish to caution you that these statements are only predictions and that actual events or results may differ materially. We do not intend to update these statements to conform them to actual results. We refer you to the documents Wimm-Bill-Dann files from time to time with the U.S. Securities and Exchange Commission, including our Form F-1. These documents contain and identify important factors, including those contained in the section captioned “Risk Factors” in our Form F-1, that could cause the actual results to differ materially from those contained in our projections or forward-looking statements, including, among others, potential fluctuations in quarterly results, our competitive environment, acquisition strategy, risks associated with operating in Russia, volatility of stock price, financial risk management, and future growth subject to risks.All news