OREANDA-NEWS. On 28 August 2008 Wimm-Bill-Dann Foods OJSC [NYSE: WBD] announced its financial results for the second quarter and half-year ended June 30, 2008.

Highlights of the first half of 2008:

•Revenue growth in all segments

•Group revenue up 30.0% to US\\$1,492.1 million

•Gross profit increased 24.5% to US\\$470.4 million

•Operating income rose 16.3% to US\\$126.0 million

•Net income increased 19.4% to US\\$78.6 million

•EBITDA[1]increased 24.9% to US\\$183.8 million

•EPS increased to \\$1.79 from \\$1.50

“I am pleased with the results we achieved in the second quarter of 2008 and first half of the year,” said Tony Maher, Wimm-Bill-Dann’s Chief Executive Officer. “Strong performance across each of our businesses drove overall sales growth of 25.6% for the second quarter and 30.0% for the first half of the year versus the comparable periods in 2007. Despite the uncertain macroeconomic environment and the dramatic worldwide increase in food prices, our business remains very solid and our position continues to improve.”

“Our dairy business delivered 23.8% sales growth in the second quarter versus the same period in 2007. Despite the slowdown in market growth we continued to improve our market share in all of our business units”, pointed out Mr. Maher. “Due to company-wide measures undertaken by us, our gross margin in Dairy improved sequentially to 30.1% in the second quarter from 26.4% in the first quarter of 2008. Our baby food business continued its impressive growth with sales increasing 63.4% in the second quarter versus the same period in 2007, outpacing market growth and strengthening our leading market share position. Gross margin in Baby Food in the second quarter of 2008 stood at 45.9%, up from 45.6% in the second quarter of 2007. Our beverage business achieved 19.3% growth in sales in the second quarter of 2008 versus the same period in 2007. Gross margin for the beverage business remained solid at 38.0% in the second quarter.

“Group gross profit for the second quarter grew 23.0% over the same period last year driven by improved cost structure and enhanced efficiency. EBITDA for the second quarter increased 21.2% over the same period last year.

Dairy

Sales in the Dairy Segment increased 28.8% to US\\$1,105.4 million in the first six months of 2008 from US\\$858.4 million in the same period of 2007. The growth was organic, driven by pricing and offset somewhat by decline in volume. The average dollar selling price rose 37.0% to US\\$1.40 per kg in the first six months of 2008 from US\\$1.02 per kg in the same period of 2007 driven primarily by average ruble price growth. Our raw milk purchasing price grew 48.6% year-on-year in ruble terms (61.9% in US dollar terms) in the first six months of 2008. Despite such a sharp rise in raw milk prices the gross margin in the Dairy Segment decreased relatively slightly to 28.3% from 29.9% in the first six months of 2007. The gross margin in the Dairy segment improved to 30.1% the second quarter 2008 from 26.4% in the first quarter 2008.

Beverages

Sales in the Beverages Segment increased 22.1% to US\\$259.0 million in the first six months of 2008 from US\\$212.1 million in the same period last year, driven mainly by a healthy balance of price, volume and mix. The average selling price increased 19.6% to US\\$0.98 per liter in the first six months of 2008 from US\\$0.82 per liter in the first six months of 2007. The gross margin in the Beverages Segment decreased to 38.0% in the first six months of 2008 from 40.8% in the first six months of 2007, due to continued concentrate cost pressure. Apple concentrate purchasing price grew 92.2% in the first six months of 2008 compared to the same period last year. Despite such a sharp rise in raw material costs, the gross margin in Beverages remained solid at 38.0% in the second quarter of 2008, and in line with two previous quarters, due to improved product mix and efficiency.

Baby Food

Sales in the Baby Food Segment increased 65.1% to US\\$127.7 million in the first six months of 2008 from US\\$77.3 million in the same period last year. This was driven by a healthy balance of volume and pricing. The average selling price rose 31.4% to US\\$2.42 per kg in the first six months of 2008 from US\\$1.84 per kg in the first six months of 2007. The gross margin in the Baby Food Segment increased to 46.7% in the first six months of 2008 from 45.3% in the first six months of 2007.

Key Cost Elements

In the first six months of 2008, selling and distribution expenses as a percentage of sales remained flat at 16.2% compared to the same period of 2007. General and administrative expenses as a percentage of sales decreased to 6.5% in the first six months of 2008 from 7.5% in the same period of 2007.

Operating profit increased 16.3% to US\\$126.0 million in the first six months of 2008. EBITDA grew 24.9% to US\\$183.8 million.

In the first six months of 2008, net financial expenses decreased 5.9% year-over-year to US\\$11.8 million, as a result of foreign currency gains. In the first six months of 2008 foreign currency gains amounted to US\\$11.3 million compared to US\\$5.6 million for the same period of 2007.

Income tax expenses totalled US\\$32.9 million in the first six months of 2008 compared to US\\$28.5 million in the first six months of 2007. Our effective tax rate decreased to 28.8% in the first six months of 2008 from 29.7% in the same period of 2007.

Net Income

Net income increased 19.4% to US\\$78.6 million in the first six months of 2008 from US\\$65.8 million in the first six months of 2007.