- Meeting the challenges of a volatile market

Financial year 2008/09
   Net sales €623.7 million
   EBITDA €54.6 million 

Highlights

•	Net sales €623.7 million for 2008/09 financial year, down 3.7% and €131.0
million for the fourth quarter, down 0.8% 
•	EBITDA €54.6 million for the twelve month period, down 12.7% and €7.0 million
for the fourth quarter, down 17.5%.  EBITDA margin of 8.8% for the full year
and 5.4% for the fourth quarter 
•	Net income €19.1 million for the twelve month period, down 33.4% and €2.0
million for the fourth quarter, down 44.8% 
•	Group trading impacted by economic crisis, challenging consumer environment,
adverse movements in currencies and high salmon prices 
•	Net cash flow from operating activities €53.0 million over the twelve month
period 
•	Continuing strong financial position with ongoing committed facilities in
place; net debt of €141.6 million and debt/equity ratio of 42.0% at end of the
fourth quarter 



Xavier Govare, CEO:

“The 2008/09 financial year has been a challenging year for Alfesca during
which we have experienced a substantially more difficult trading, economic and
credit environment. 

“During the 2008/09 financial year we have seen the economic conditions in
Europe deteriorate dramatically with our key markets in UK, France and Spain
entering into recession; experiencing rapidly rising unemployment, pushing
consumer confidence to its lowest levels and prompting retailers to introduce
promotions and discounts to entice consumers to shop. 

“The first and second halves of the 2008/09 financial year showed marked
differences in the economic environment and also the trading patterns of
Alfesca. 

“The first half of the year was dominated by a strong drop of the markets in
which Alfesca operates due to the collapse of consumer confidence.  In the
second half of the year we saw rapid changes in consumer behaviour favouring
more value products impacting our sales and margins, as well as a sharp
increase in salmon raw material prices, which is the single largest raw
material component of the Group's input costs. 

“In these very challenging economic circumstances, Alfesca's net sales for
2008/09 financial year was €623.7 million, down 3.7%, and EBITDA was €54.6
million, down 12.6%. 

“The fall in the Group's EBITDA was as a result of a number of key factors
which included the development of an adverse sales mix as consumers “traded
down” by favouring private labels over national brands thereby accelerating the
trend towards less expensive and lower margin value products. 

“In addition, our results were also adversely impacted by sharp increases
during the year in raw material prices for salmon, which saw prices rising
close to the historically high levels last seen in 2006.  The price increases
were primarily due to shortage of salmon supply experienced as result of the
Chilean salmon industry being hit by the infectious salmon anaemia (ISA) virus
which significantly reduced production levels in Chile (estimated to be over
50% for 2009) and placed exceptional demand on Norwegian salmon supplies, from
which Alfesca sources the majority of its salmon. 

“The Group's results were also negatively impacted by adverse currency
fluctuations, such as due to the falling value of the pound.  This devaluation
not only raised the cost of prawn raw materials that needed to be imported,
such as into the UK where the market prices are set in dollars but it also had
a negative influence when the results of our UK operations were translated into
euros.  The adverse euro:pound exchange rate volatility negatively impacted our
Group EBITDA by over €3.0 million if constant year on year exchange rates are
assumed. 

“During 2008/09 we took decisive action to manage the business through the
recession and to compensate for rising salmon prices.  To manage our margins,
we partly obtained necessary price increases but this was difficult to do fully
in the poor economic environment.  Instead, we invested in price to support our
customers and consumers; a situation that we expect to continue into 2009/10. 

“As the economy worsened and our results deteriorated, we also took a series of
action to reduce our costs in 2008/09 and to help support profitability going
forward.  We did this by completing a key stage of our rationalisation
programme involving the merger of certain central functions, implementing a
common IT platform and putting in place a more optimal organisational structure
in France.  In addition, we completed the integration of the production
facilities of Blini and LTG, as well as closing one of our duck slaughtering
factories and consolidating the operations into one site in south west France. 
In addition, we continued with our focus to increase our industrial efficiency. 

“The economic conditions and outlook for 2009/10 remain uncertain and we expect
that high salmon prices will continue to have an impact on the Group's results
going forward.  Although demand for our food products should remain broadly
stable, the trend for “trading down” looks set to continue and our ability to
meet the demands of the changing market conditions will be critical.”