Reporting its first results since a package of divestments were announced in November, Dutch food and nutrition group Royal Numico said turnover for the full year was down by 4.8 per cent to €3.97 billion. Sales dropped 7.2 per cent in the fourth quarter.
The company also reported a 19 per cent drop in 2002 cash earnings to €315 million, mainly due to further weakness in food supplement operations. Operating profit fell by 14 per cent over the year to €561 million. Fourth quarter results were impacted by cash proceeds related to the vitamin claim and an impairment charge of €385 million.
The company, which recently announced the sale of its wholesale business Unicity in the US, said that all divestments of non-core activities are expected to be announced before the end of June 2003. It is still hoping to sell vitamins unit Rexall Sundown.
CEO Jan Bennink said that the company, the world's biggest vitamin maker, is currently making changes to the divisional structure to allow for the focus on high growth, high margin businesses announced in November.
"Baby Food and Clinical Nutrition are - together with Research & Development - developing and executing several strategic initiatives that will bolster both growth and operating margins of which the first tangible results are expected to come to fruition in the second half of 2003," said Bennink.
He added that changes are also being made at US-based GNC to improve sales growth and margins, although it seems that this business too could be open to bidders.
"Notwithstanding the first positive signs we see from these various initiatives, we are not fully confident that GNC will return to acceptable sales growth and margin levels within 18 months. Therefore, we keep all possible options open for GNC," commented Bennink.