New signs of confidence in Numico
nutrition, has the potential to be among the fastest growing
companies in consumer staples, say analysts at Goldman Sachs.
The bank has re-instated its rating for the firm following the divestment of its US supplement business GNC, finalised earlier this month.
Numico's management has successfully restructured the group's assets and debt, and the sale of GNC should reduce debt at year-end to €1,250 million, €1 billion lower than the previous year, say the analysts.
After a long period of loss-making, attributed to its supplement activities in both US and European markets, Numico has returned to core operations in babyfood and clinical nutrition, selling off units such as Vitamex in Sweden its UK retail business the Health & Diet Group and Rexall Sundown, Unity and GNC in the US.
The core units already reported growth in the last quarter but CEO Jan Bennink recently said that the babyfood unit, targeted for growth of 5-7 per cent, could exceed this, possibly reaching 10 per cent.
This will depend on sales success in the European market, according to Goldman Sachs, although this year's restructuring efforts could give the babyfood business some brand-boosting potential.
The company also said today that it has managed to refinance its existing bank loan facility, giving it more favourable terms and conditions.
"As a result of the divestment of GNC, Numico's operational and financial risk profile has significantly improved and the credit needs of the company are diminished. The terms and conditions of this new bank loan facility now better reflect Numico's improved risk profile. This in turn will reduce the company's financial expenses," said Jean-Marc Huët, Numico's chief financial officer.
The new loan will be used for 'general purposes' and the repayment of convertible bonds, due in 2004 and 2005, he said.
