Bakkavör Group hf. - Financial Statement Release

Bakkavör Group's Results for Q2 and H1 2009

IMPROVED PROFITS, RETURN TO ROBUST CASH GENERATION AND POSITIVE OUTLOOK 

Highlights:

•  Q2 EBITDA* up 5.7% to £37.3 million (Q2 2008: £35.3 million)
•  Improved EBITDA* margin in Q2 at 8.7% compared to 8.3% in Q2 2008
•  Q2 Net Profit of £26.4 million compared with a loss of £23.5 million in Q2
   2008, a significant turnaround of £50 million 

•  Q2 earnings per share were 1.2p compared with a loss per share of 1.1p in Q2
   2008 

•  UK fresh prepared foods sales continue to accelerate with 7%** growth in the
   quarter, supported by a strong performance in ready meals 

•  Cash inflow from operations, excluding one-off restructuring costs of £46.4
   million in Q2 2009, up 76% on Q2 2008 

•  Q3 trading expected to remain strong. Management forecasting a 25% increase
   in EBITDA* in the quarter and raising the forecast for the full year 20% to
   £130 million 

Ágúst Gudmundsson, Chief Executive Officer:

As anticipated when we reported our first quarter results in May, Bakkavor has
now returned to EBITDA growth following the successful implementation of our
restructuring plan at the start of the year. Furthermore, our cash position has
improved considerably reflecting greater operational efficiencies, a marked
improvement in profitability and greater control of working capital. As the
benefits of these actions become more pronounced, we expect our cash generation
to continue to grow throughout the second half of the year. 

Group sales in our UK fresh prepared foods business are accelerating, with
strong sales growth of 10% in ready meals, one of our core drive markets. This
demonstrates the inherent strength of our market positions, our operational
flexibility and ability to adapt to a fast-changing marketplace. 

We now have a stable platform from which to grow the business going forward and
our revised EBITDA guidance for the full year reflects our renewed confidence. 

At the holding company level, we are in the advanced stages of refinancing of
all indebtedness. Our discussions with our Icelandic institutional creditors
are constructive and we hope to announce a conclusion shortly. These
discussions follow the successful renegotiation in March of facilities for our
operating business providing fully secured financing for the next three years. 



Key Contacts:

Ágúst Gudmundsson,
CEO
Tel: +354 550 9700
Richard Howes
CFO 
Tel: +354 550 9700

Charlie Armitstead/Hazel Stevenson 
Financial Dynamics
Tel: +44 207 269 7275



*EBITDA excluding restructuring costs
** Adjusted to reflect sales resigned in restructuring process

Attachments:

bakk q2 2009 press release.pdf