Numico to sell Rexall, close European vitamins unit
underperforming US vitamin unit Rexall Sundown in a bid to boost
profits, the company said today. The world's biggest vitamin and
supplement maker reported a 32 per cent drop in third-quarter net
profit before goodwill and extraordinary charges (of €1.443 billion
to write off goodwill). European vitamins operations are also to
close down in the new strategy.
Dutch food and nutrition group Numico is to sell its underperforming US vitamin unit Rexall Sundown in a bid to boost profits, the company said today, reporting a 32 per cent drop in third-quarter net profit before goodwill and extraordinary charges, to €53 million.
The world's biggest vitamins and food supplement maker, which has been hit by the weak US vitamins market, is also to close its European vitamins operations and centre core activities around infant nutrition and clinical nutrition, the units which have performed well and saw sales increase by 4.8 and 12.3 per cent respectively.
Sales overall however fell 6.1 per cent to €928 million, well below a forecast of €1.026 billion. Numico also faces an extraordinary charge of €1.443 billion to write off goodwill for US supplement activities.
The new strategy will see Numico try to boost performance at its other US-based food supplement division, General Nutrition Companies, which it bought in 1999. Strategic options for the direct-selling unit Unicity are also to be explored, said the company.
There will also be a focus on high growth-potential emerging markets and drives to increase efficiency and future profitability.
Numico CEO Jan Bennink said: "Today's results show a sound performance from our Infant and Clinical Nutrition businesses more than offset by a disappointing performance in the US. We will focus on high growth, high margin businesses in specialised nutrition where we can offer a competitive edge for our clients, employees and shareholders alike. These businesses will be therefore centered around Infant Nutrition and Clinical Nutrition which have strong cash flow characteristics and have significant opportunities to improve efficiencies. "
He added: "2002 can be characterised as a difficult year with a lot of turbulence and change. I am convinced that 2003 will be a year of transition and recovery, following which we will return to sustainable long-term growth and above average profitability in 2004."
Numico predicted full-year earnings before interest, tax and amortisation (EBITA) would be between €420-440 million, down from €667 million in 2001.
Numico said it had continued to operate solidly within its banking covenants in the third quarter and expected to meet its covenants in the forthcoming quarters.
