NEWS

Ülker Biscuit productivity and growth rate continue

On May 27, Ülker Biscuit held its General Shareholders’ Meeting to report the company’s 2007 financial results to its shareholders. At the meeting, the company’s profitability, investment activities and restructured management were some of the topics that were dealt with. Targets announced for 2008 include “investment to increase production capacity” and “new flavors”.

As the first publicly traded company and the flagship brand of the Ülker Group, Ülker Biscuit realized a gross operating profit in 2007 of 322 million TL and a net profit of 116 million TL, which was an increase of 30% compared to the previous year. The gross profit margin increased 2 points, while the EBITDA (Earnings before Interest, Taxes and Amortization) increased by 1.6 percentage points. Ülker Biscuits General Manager Cafer Fındıkoğlu emphasized after meeting that the profit increase was a result of the company’s efficiency objectives and simple management philosophy.

The growth and profitability of Ülker Biscuit which continued in 2007 was due to the company’s sound financial structure. The International Credit Rating Agency, Moody’s Investors Service, which had given Ülker Biscuit a B1 “Company Credit Evaluation Rating”, raised its assessment to a B3 (Stable Investment) rating in 2007. 

Shareholders are happy with Ülker Biscuit’s profitability
While carrying out its business operations, Ülker Biscuit is not only concerned with successful financial results, but also with the value it creates for its customers, shareholders, suppliers and employees. While the strong financial showing of the company met the expectations of shareholders, the success of ÜB’s performance in 2007 was also reflected in the happy faces of its farmers and suppliers.  Ülker Biscuit is Turkey’s largest consumer of raw materials.  In 2007 Ülker Biscuit purchased 240,000 tons of wheat and 49,000 tons of sugar.

Customer satisfaction and the ability to meet customer expectations are at the top of ÜB’s list of priorities.  In 2007, developing new products and improving existing ones were not simply done to improve profitability, but to provide the utmost in customer satisfaction. In Turkey, satisfaction with products and services is measured by the Turkish Customer Satisfaction Index (TMME). In the third quarter of 2007, these results showed that Ülker was in first place in the Biscuits and Confectionery sector.

Also in 2007, Ülker Biscuit underwent a collective bargaining process which was successfully dealt with very quickly.  Workers’ approval of the material and social benefits provided by Ülker Biscuit was illustrated by its strong performance in a subsequent worker satisfaction survey.

Ülker Biscuit Director Cafer Fındıkoğlu assessed the company’s financial and operational results, saying, “The contributions we make to the community are one of our most important considerations as we go about our daily business operations.  Our shareholders, by sharing in the value we have created, have contributed to the economy of the country, by paying nearly 112 million TL in taxes.”

Ülker Biscuit continues to lead the market and the sector with its innovation
UB, the first and only company in the biscuits market to be publicly traded, conducts its business in compliance with the principles of corporate governance and shares information with the public according to its understanding of business transparency. In this sense, Ülker Biscuit monitors the industry's most trusted research institutions in the sector, according to Nielsen data.  Acting on the principle of providing consumers with products that appeal to their tastes, in 2007 Ülker Biscuit and its affiliates realized a market share of 57.2%, based on turnover. A statement by Cafer Fındıkoğlu announced the company’s goals for the next period.  He said that, at the beginning of 2008, Hanımeller Burma and Hanımeller Negro were released to the market.  During the next few months, the R&D department will continue to meet customer expectations with innovative new products, he said. Fındıkoğlu also pointed out that some new products are being developed to take advantage of the current trend toward chocolate-biscuit combinations and that products for special occasions are being designed, such as a special Mother’s Day product from Hanımeller..

Most memorable brand name: Ülker
In 2007, Ülker Biscuit continued to meet consumer needs and expectations on a high level and to establish and maintain mutually beneficial relationships with them. A study that was conducted at the end of the year showed customer loyalty to the Ülker brand has been very high over the last few years.  According to the results of the 2007 AC Nielsen Brand Name Survey, Ülker was in first place as the most memorable brand name in the biscuits category.

Ülker Biscuit has adopted simpler, quicker, more efficient processes
At the beginning of 2006, Ülker Biscuit began to focus on its core products and as a result it changed its official company name from Ülker Food Industries Ltd. to Ülker Biscuit Industries Ltd. with the same focus, changes were made to the Ülker subsidiary companies.  The company established Rekor Food and added it to its list subsidiaries, by disposing of its shares in Atlantic Food Marketing Ltd.
Ülker Biscuit has adopted a policy of management that fosters simple processes that are practical, fast and efficient.

New Steps into the Global Arena: Godiva
With its purchase of the global brand Godiva in 2007, Ülker Biscuit parent company Yıldız Holding succeeded in adding a new dimension to its global field operations and reaching new customers throughout the world. Cafer Fındıkoğlu made his assessment of the partnership between Ülker Biscuit and Godiva by saying, “The 25.23% share that we have in Godiva has had a tremendous impact on trends in the cookie-chocolate world recently. This is an important advancement for Ülker Biscuit, which has benefited from this opportunity to share experience and develop synergy both domestically and abroad.”

Ülker Biscuit has not used trans fats in its production for a year
In anticipation of forthcoming legislation in Turkey regarding the reduction of trans fat use in production to less than 1%, in June 2007 Ülker Biscuit reduced the use of trans fats in all of its products to the specified level. The oils that it uses is obtained from Ülker Biscuit subsidiary, Besler Food, which is gradually beginning to use the term “No Trans Fats” on its products’ packaging.   

Environmentally friendly manufacturing
Throughout its production processes, Ülker Biscuit is continually aware of all environmental issues related to its activities.  Ülker Biscuit adheres closely to the Kyoto protocol and the UN Framework Convention on Climate Change, and has adopted research policies to determine risks to the environment which may occur. The research shows that greenhouse gas emissions from the factories are well within limits that have been set, and therefore pose no immediate threat to the environment.   

Ülker Biscuit focused on “higher productivity “in 2007
In 2007, Ülker Biscuit continued its activities focused on advanced technological processes and high capacity facilities to increase efficiency. Ülker Biscuit factories in Istanbul and Ankara have reached a total production capacity of 129,741 tons, and are being operated at 82% capacity.

New investments are on the agenda for 2008
Investments made to install new facilities, increase production capacity, overhaul production lines, and to increase efficiency, hygiene and warehousing in the Topkapı and Ankara factories, totaled 29 million TL in 2007. Ülker Biscuits and its partner companies expect to invest around of 56 million TL in 2008.  

Primary indicators (TL) (*)

2006

2007

Shareholder’s Equity

536.971.114

716.140.227

Gross Real Operating Profit

386.203.854

321.792.720

Net Real Operating Profit       

92.459.448

88.615.711

EBITDA

121.525.460

114.664.273

Net Profit for the Period  

89.159.093

116.054.667

Output (**)    

240.089

261.862


(*) Amounts are consolidated.
(**) Amounts are in “tons” and show total production in  Istanbul, Ankara, Gebze and Karaman factories.
 

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