EANS-Adhoc: Valora Holding AG / Valora Group reports good results in a difficult market

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6-month report

25.08.2011

Valora Group reports good results in a difficult market - Adjusted
external sales and net revenues advance 9.3% and 4.8% respectively
versus H1 2010 - Adjusted operating profit margin raised by +24.0% -
Net earnings improve by +1.4% - Implementation of growth strategy
progressing successfully > Organic margin and sales growth at Retail
division > Acquisition-led expansion at Valora Trade with further
potential for H2 2011 - Outlook: previously announced objectives
confirmed

Adjusted external sales and net revenues advance 9.3% and 4.8%
respectively versus H1 2010

Valora closed the first six months of 2011 with consolidated external
sales (including franchisee revenues) totalling CHF 1,473 million, an
increase of 1.6% on the same period of last year. After adjusting for
the effects of non-recurring revenues from football picture cards and
exchange-rate fluctuations, the Group´s external sales rose an
impressive 9.3%. Valora´s published first-half net revenues came in
at CHF 1,397.6 million, -2.4% below the CHF 1,431.9 million generated
last time. After adjusting for football card and exchange-rate
factors, net revenues amounted to CHF 1,459.9 million, 4.8% up on
their level a year earlier.

The Group´s Retail division performed well in the first half of the
year, increasing its external sales by CHF 63 million, or some 8%, to
CHF 874.6 million. Tabacon Franchise GmbH, acquired in 2010, made a
positive contribution to this result. Published net revenues for the
first six months of 2011 rose 0.7% to CHF 797.4 million. When
comparing this with the division´s first-half 2010 result, it should
be remembered that the figures for the 2010 figure included sales of
football picture cards. In addition, Valora Retail´s first-half 2011
sales were significantly reduced by the rapid and substantial
appreciation of the Swiss franc during that period. Stripping out the
effect of these two factors, the division´s net revenues for the
first six months of 2011 rose 5% to CHF 822.0 million. Retail
Germany, avec. and kiosk Switzerland were the business units
principally driving the encouraging performance the division achieved
in the face of generally difficult retail market conditions.

Valora Services generated net revenues of CHF 310.3 million, down
from CHF 369.4 million in the same period of 2010. Adjusting for
football card and exchange-rate effects reduces this decline to
-5.6%. This downtrend in sales had already begun to manifest itself
in the closing months of 2010 and continued unabated throughout the
first six months of this year.

In an intensely competitive market, Valora Trade posted good results
for the first six months of 2011, raising its published net revenues
by 4% to CHF 362.8 million. In local currency terms, net revenues
advanced by 12.1% on their first-half 2010 levels. The division´s two
acquisitions, the cosmetics distributor EMH (purchased in autumn
2010) and Salty Snacks in Germany (purchased in spring 2011) were
successfully integrated and, as anticipated, are both making very
positive contributions to the division´s turnover. While sales at the
division´s units in Switzerland (-8.4%) and Austria (-7.3%) declined,
Valora Trade Denmark increased turnover by 5.6% and Valora Trade
Finland by 12.6%.

Adjusted operating profit margin raised by +24.0%

During the first six months of 2011, the Valora Group raised its
consolidated gross profit margin from 30.3% to 30.7%. This
improvement is principally due to enhancements made to product ranges
and changes in the sales channel mix as the number of franchisee
outlets increased. At the operating profit level, the Group´s
published EBIT for first-half 2011 amounted to CHF 33.4 million,
putting the consolidated EBIT margin at 2.4%. After stripping out the
adverse impact of exchange rate moves (CHF 3 million) and
non-recurring football card profits (CHF 6.3 million), Valora raised
its operating profit by +24% and its adjusted EBIT margin to 2.5%,
versus 2.1% a year earlier. This equates to a 0.4 percentage point
increase in the Group´s sustainable profitability.

At the divisional level, Valora Retail increased its published EBIT
to CHF 19.2 million and improved its EBIT margin to 2.4%. After
stripping out picture card and exchange-rate effects, the division
boosted its adjusted operating profit by some 65%, to CHF 20.6
million, which equates to an adjusted EBIT margin of 2.5%. Valora
Services generated a published operating profit of CHF 10.0 million,
versus CHF 19.5 million in the first six months of 2010. This decline
is principally the result of non-recurring football card revenues,
adverse exchange-rate effects and the sharp contraction of the
overall press market. After adjusting for football card and
exchange-rate factors, Valora Services´ EBIT margin in first-half
2011 was 3.4%. Despite the significant reduction the division
achieved in its staff costs, this result is unsatisfactory and below
the target range of 4-5%. Further increases in efficiency levels and
additional revenues from new services should enable the division to
get its operating results back on target. Valora Trade raised its
published operating profit by CHF 1.9 million, or 38.6%, to CHF 7.0
million, while improving its EBIT margin to 1.9%. After adjusting for
the adverse impact of exchange rate movements, the division´s
operating profit rose by 54.2%, thus raising its adjusted EBIT margin
to 2.0%. This improved operating profit result is particularly
gratifying, since recent acquisitions have also increased the
division´s operating costs.

Net earnings improve by +1.4%

Valora´s net profit for the first six months of 2011 totalled CHF
26.3 million, compared to CHF 26 million in the same period of last
year. In spite of the higher dividend pay-out, equity covered
increased by 0.5 percentage points to reach 44.1% of total assets.
Due to deadline-related investments in net working capital, Valora´s
net debt at June 30, 2011 was CHF 76.9 million, CHF 62.8 million
higher than at year-end 2010.

Implementation of growth strategy progressing successfully In
November 2010, the Valora Group presented its "Valora 4 Growth"
expansion strategy. The overall objective of the strategy´s four
growth initiatives is to enhance operational excellence and to
achieve sustained organic and acquisition-led sales and margin growth
during the period to 2015.

Organic margin and sales growth despite difficult market conditions
During the first six months of 2011, the Valora Group achieved both
organic growth in its external sales and an initial and significant
improvement in margins. This improvement is mainly the result of
product range adjustments, further streamlining of the cost base,
enhanced gross profit margins and the emphasis placed on developing
agency and franchise business models. Organic growth in external
sales (excluding the effects of exchange rates, football picture
cards and acquisitions) was close to 1%.

Acquisition-led expansion at Valora Trade with further potential for
H2 2011 Valora´s purchases of Salty Snacks in Germany in March 2011
and of Scandinavian Cosmetics in Sweden in July 2011 have enabled the
Group to acquire two highly successful distribution companies. Valora
currently estimates these companies´ contribution to annual net
revenues to be of the order of CHF 85 million. This is congruent with
the Trade division´s objective of expanding its operations as largest
pan-European distributor by 2015. In Valora´s Retail/Services
business area, whose acquisition-related focus is on profitable
growth in Germany (through kiosks) and new European formats, a number
of promising negotiations are currently under way. Management is
confident of achieving the objectives it has set for 2011.

Outlook: previously announced objectives confirmed

The results achieved in 2011 to date and the progress made in
implementing the Group´s strategy provide a sound basis for achieving
the defined "Valora 4 Growth" objectives.

Despite the steep decline of the overall press market and the present
currency configuration, which has also been an adverse factor for
Valora, management remains confident that the Group will achieve the
objectives it has set for 2011, absent a further deterioration in
exchange rates or consumer sentiment or a sharper-than-expected
decline in the overall press market. Valora´s management also
reconfirms its goal, initially formulated in November 2010, of
raising the Group´s operating profit margin to 3.0% to 3.5% in 2012.
This is based on projected 2012 EBIT of CHF 110-130 million and
external sales of some CHF 3.7 billion, calculated on the basis of
the anticipated EUR/CHF exchange rate of 1.35 budgeted for at that
time. As Thomas Vollmoeller, Valora Holding AG´s CEO, puts it,
"Despite adverse market conditions we have achieved good results in
the first six months of 2011. We will remain focused on implementing
our strategy and are convinced that Valora continues to offer sound
value to its stakeholders, even in these turbulent times".

Valora Group key financial data

Income statement

in CHF million H1 2011 H1 2010

External sales 1 473.0 1 450.0
Adjusted external sales* 1 542.6 1 411.7
Net revenues 1 397.6 1 431.9
Adjusted net revenues* 1 459.9 1 393.5
Gross profit 429.6 433.7
Gross profit margin 30.7% 30.3%
Operating costs -401.3 -402.4
Operating profit (EBIT) 33.4 35.7
Adjusted operating profit (EBIT) * 36.5 29.4
EBIT margin 2.4% 2.5%
Adjusted EBIT margin* 2.5% 2.1%
Consolidated net profit 26.3 26.0

* Adjusted for exchange-rate and World Cup 2010 picture card effects

Liquidity, balance sheet

in CHF million 30.06.2011 31.12.2010
Cash and cash equivalents 82.6 130.5
Shareholders´ equity 467.3 478.1
Equity cover 44.1% 43.6%
Net debt 76.9 14.1

Key financial metrics for Valora divisions

Key metrics Retail Services Trade
in CHF million H1 2011 H1 2010 +/- H1 2011 H1 2010 +/- H1 2011 H1 2010 +/-
External sales 874.6 811.6 +7.8%
Adjusted external sales*
906.5 802.3 +13.0%
Net revenues 797.4 792.0 +0.7% 310.3 369.4 -16.0% 362.8 348.8 +4.0%
Adjusted net revenues*
822.0 782.6 +5.0% 321.2 340.4 -5.6% 391.1 348.8 +12.1%
Operating profit(EBIT)
19.2 14.6 +31.4% 10.0 19.5 -48.8% 7.0 5.1 +38.6%
Adjusted operating profit (EBIT) *
20.6 12.6 +64.5% 10.8 15.3 -29.5% 7.8 5.1 +54.2%
EBIT margin 2.4% 1.8% +0.6pP 3.2% 5.3% -2.1pP 1.9% 1.5% +0.4pP

Adjusted EBIT margin* 2.5% 1.6% +0.9pP 3.4%
4.5% -1.1pP 2.0% 1.5% +0.5pP

* Adjusted for exchange-rate and World Cup 2010 picture card effects

The following documentation is available for download on
www.valora.com

Half-year report 2011 http://www.valora.com/media/documents/english/r
eports/2011/halbjahresbericht_2011_en.pdf

Media release
http://www.valora.com/en/media/newsinformation/news_00387.php

Presentation on first-half 2011 resultshttp://www.valora.com/media/do
cuments/english/presentations/2011/praes_halbjahresabschluss_2011_en.
pdf

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Valora Telephone Conference - Analysts´ and Media Conference
First-half 2011 Thursday, August 25, 2011 | 14.00 CET (German) |
15:00 CET (English)

Thomas Vollmoeller, CEO of Valora Holding AG, and Lorenzo Trezzini,
CFO, will provide information about the Valora Group´s First-half
2011 results during a telephone conference.

To participate in the conference: please call the following number
(please call 10 to 15 minutes before the stated starting time):

+41 (0) 91 610 56 00 (Europe)
+44 (0) 203 059 58 62 (UK)
+1 (1) 866 291 41 66 (USA - toll-free)

The playback will be available one hour after the conference for 24
hours till August 26th, 2011. To access the digital playback, please
dial:

+41 (0) 91 612 43 30 (Europe)
+44 (0) 207 108 62 33 (UK)
+1 (1) 866 416 25 58 (USA)

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Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO
THE UNITED STATES THIS DOCUMENT IS NOT BEING ISSUED IN THE UNITED
STATES OF AMERICA AND SHOULD NOT BE DISTRIBUTED TO U.S. PERSONS OR
PUBLICATIONS WITH A GENERAL CIRCULATION IN THE UNITED STATES. THIS
DOCUMENT DOES NOT CONSTITUTE AN OFFER OR INVITATION TO SUBSCRIBE FOR
OR PURCHASE ANY SECURITIES. IN ADDITION, THE SECURITIES OF VALORA
HOLDING AG HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES LAWS AND MAY NOT BE OFFERED, SOLD OR DELIVERED WITHIN THE
UNITED STATES OR TO U.S. PERSONS ABSENT REGISTRATION UNDER OR AN
APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE UNITED
STATES SECURITIES LAWS

This document contains forward-looking statements about Valora which
may incorporate an element of uncertainty and risk. The reader must
therefore be aware that such statements may diverge from actual
future events. These forward-looking statements are projections
relating to future possible developments. All the forward-looking
statements contained in this document are based on data available to
Valora at the time this document was prepared. Valora makes no
commitment whatsoever to update forward-looking statements in this
document at a later date, or to adapt them to reflect new
information, future events or the like.

Further inquiry note:
Investor Relations: Tel: +41 58 789 12 20
Mladen Tomic E-Mail: mladen.tomic@valora.com

Media Relations: Tel: +41 58 789 12 01
Stefania Misteli E-Mail: stefania.misteli@valora.com

end of announcement euro adhoc
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issuer: Valora Holding AG
Hofackerstrasse 40
CH-4132 Muttenz
phone: +41 61 467 20 20
FAX: +41 58 789 12 12
mail: info@valora.com
WWW: www.valora.com
sector: Retail
ISIN: CH0002088976
indexes:
stockmarkets: stock market: BX Berne eXchange, Main Standard: SIX Swiss Exchange
language: English