Belgium: Duvel Moortgat’s consolidated turnover increased by 7.7% in the first half of 2005

Duvel Moortgat NV announced on September 20 that its consolidated turnover increased by 7.7% and income after tax by 8.2% for the first half of 2005 year-on-year. Turnover abroad represents already 33% of total turnover.

Turnover of the group’s main beer brands realises a significant increase compared to the first quarter of 2004. Duvel’s turnover rises globally by 4%. The 3 Maredsous abbey beers increase by 18%. Vedett almost doubles its turnover. Turnover of the Czech Bernard beers increases by 31% and that of the Ommegang products in the United States by 23%.

The growing sales abroad, representing already 33% of turnover, proves that Duvel Moortgat continues its internationalisation successfully.

Due to the disappearance of Freya’s turnover, the Belgian market only rises by 1%. The turnover abroad increases by 23% as a direct result of diverse initiatives in the priority export markets. In the Netherlands, following the price war in the supermarket chains, turnover only increases by 3%, not taking into account Freya. In France, turnover grows by 38% and, in the UK, by 31%. The United States also do well with a turnover increase of 23%. Both the American and the Belgian beers increased their volumes. The other countries, including Japan and Italy, grow by 26%. In the Czech Republic, turnover rises by 31%.

The operating income rises by 11% to € 33.9 million.

These consolidated half year figures apply the IAS/IFRS standards and their interpretations, in conformity with the European regulation 16/06/2002 of July 19 2002.

During the first six months of 2005, the Duvel Moortgat group realised a consolidated turnover of € 32 million, a 7.7% increase. In accordance with IAS 18, this turnover doesn’t include excises anymore. The cash discounts have also been deducted. Turnover of Freya’s fruit juices disappears following the agreement concluded with Konings NV concerning the sale of the Freya’s brand and client portfolio. On 30/06/04, Freya was still responsible for 3% of the group’s turnover.

The results of operating activities (EBIT) grow by 12% to € 7 million. Following the application of IAS/IFRS, the results of operating activities on 30/06/2004 change from € 5.8 million (Belgian Gaap) to € 6.2 million (IAS/IFRS). The most important modifications concern: cancellation of the depreciation on consolidation goodwill, the depreciation of tangible assets over the course of their useful life, the valuation of cafés and pubs at fair value and the stock valuation at full cost.

The result of operating activities after net finance costs rises by 11.6 % to € 7 million. The application of IAS/IFRS changes the net finance costs on 30/6/2004 from € -297,000 (Belgian Gaap) to € 45,000 (IAS/IFRS). The main modifications concern the reclassification of the cash discounts and the withdrawal of the write-downs of own shares in accordance with IAS/IFRS 32§33.

Profit rises by 8.2% to € 4.4 million. In accordance with IAS/IFRS, there are no exceptional results. The gross operating cash flow (EBITDA) grows by 17.7 % to € 10.5 million.

At the beginning of this year, the LFB group has opened a fourth café in Grenoble (France). This corporation has been consolidated (proportional consolidation). The DRC corporation has been fully consolidated in accordance with the application of IAS/IFRS 28 while before, the equity method was applied to this entry.

The investments of the group in tangible assets amount to € 6.7 million during the first half year of 2005. They concern mainly investments in redoubling both the hydraulic and purification capacity of the water treatment plant (€ 1.1 million), the expansion and renewal of pubs and cafés (€ 2.4 million), the renewal and expansion of the crates (€1.4 million), as well as diverse technical investments on the production level (€ 1.5 million), like a sprinkler system (fire protection), amongst others.

Despite a slower start of sales during the first quarter, Duvel Moortgat has been able to realise its predicted growth during the first half year. The company therefore estimates that it will realize its predicted turnover and profit growth for 2005 as a whole.

Since its IPO in 1999, an independent, non-executive administrator has taken on the function of Chairmain of the Board of Directors. In order to follow even more strictly the regulations of the Belgian Corporate Governance Code, Duvel Moortgat has rearranged the composition of its committees during the first half year of 2005. Right now, every committee (audit, remuneration and apppointmant), founded by the Board of Directors, is composed of a majority of non-executive, independent administrators. The functions of chairman of the Audit committee and of the Board of Directors have also been separated from one another. Finally, LP Invest, represented permanently by Philippe Moortgat, has been appointed Vice-Chairman of the Board of Directors.

Duvel Moortgat, whose history dates back to 1871, is an independent producer of authentic specialty beers. The group is regarded throughout the world as the pre-eminent benchmark in the field of high fermentation beers - a dominant position due largely to the success of its best-selling beer, Duvel.

As a pioneer in fermentation and secondary fermentation techniques, Duvel Moortgat has become not only the sixth biggest brewery group in Belgium in terms of sales, but in particular, the absolute market leader in terms of operating margin. Duvel Moortgat is quoted since the beginning of June 1999 on Euronext Brussels.

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