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Monterrey, Mexico
February 27, 2003
Savia S.A. de C.V.
(BMV:SAVIA) (NYSE:VAI) today announced its results for fiscal 2002.
EXECUTIVE SUMMARY
- Savia improved its operating
income by 98 million dollars (174%) to 42 million dollars.
Operating expenses were reduced by 45 million dollars (14%)
when compared to the previous year.
- Savia increased its operating
cash flow, reporting 66 million dollars, 314% larger than the
same figure reported in year 2001.
- Savia's net consolidated
results improved 318 million dollars (83%) compared to fiscal
2001, reporting a net consolidated loss of 65 million dollars.
- Seminis registered sales of
456 million dollars, a similar value to that achieved in
fiscal 2001. It reduced its operating expenses by 6% and
reported an operating cash flow of 80 million dollars, a 910%
increase over the previous fiscal year.
- Seminis reported an
improvement in gross profit, increasing to 62% of sales 2002
from 49% on fiscal 2001, this had a positive impact of 59
million dollars.
- Bionova reported accumulated
sales of 134 million dollars and reduced its operating
expenses by 14 million dollars (46%) compared to fiscal 2001.
It reported an operating loss of 6 million dollars, an
improvement of 33% compared to fiscal 2001. In addition, its
operating cash flow improved by 28% compared to the previous
fiscal year.
REPORTED RESULTS
Main Business Indicators
Million of Dollars as of December 2002
Jan-Dec 2002 Jan-Dec 2001 Variation
------------ ------------ ---------
Sales 637 715 -11%
Gross Profit 318 265 20%
Gross Profit 50% 37% --
Operating Expenses 276 321 14%
Operating Income 42 (56) 174%
EBITDA 66 (31) 314%
FISCAL 2002 RESULTS Consolidated Net Sales
Consolidated net sales were 637 million dollars, a decrease of 11% compared to
fiscal 2001. The reduction is primarily the result of a decrease in sales at
Bionova due to the divestiture of Interfruver de Mexico, a non-strategic asset
of this subsidiary. Of the reported Sales, 47% were denominated in dollars, 21%
in euros, 9% in Mexican Pesos and 23% in other currencies.
Consolidated Operating Income
The consolidated operating income for fiscal 2002 reached 42 million dollars, an
improvement of 98 million dollars (174%) compared to the same period last year.
This result was mainly due to the increase in Seminis' operating income of 74
million dollars, as well as a reduction in operating expenses at Bionova and a
reduction in corporate expenses.
Consolidated Operating Cash Flow
During fiscal year 2002, Savia generated 66 million dollars, an increase of 97
million dollars (314%) compared to the negative consolidated operating cash flow
reported in fiscal 2001.
Consolidated Net Income
During the reported period Savia considered extraordinary expenses from the
booking of reserves to account receivables from related parties, the
cancellation of investment projects and the cancellation of reserves related to
previous year divestitures, in the amount of 68 million dollars. Because of
these extraordinary charges the consolidated net loss reached 65 million
dollars, an improvement of 83% or 318 million dollars compared to fiscal 2001.
FISCAL 2002 RESULTS FOR THE MAIN SUBSIDIARIES Seminis
Sales for Seminis during fiscal 2002 were 456 million dollars, a similar level
to that reported in the same period last year. Notwithstanding the foregoing,
the implementation of cost reduction programs led to a better control in the
cost of goods sold, thus the gross margin improved from 49% during fiscal 2001
to 62% in fiscal 2002. Gross profit improved 59 million dollars and operating
expenses were reduced by 15 million dollars (6%) compared to those reported in
fiscal 2001.
Operating income reported during 2002 was 65 million dollars, an increase of 74
million dollars (807%) compared to the previous fiscal year. Operating cash flow
was 80 million dollars, an increase of 72 million dollars (910%) compared to
fiscal 2001.
Bionova
Bionova reported accumulated sales of 134 million dollars, a decrease of 36%
from the same period in 2001 as a result of the divestiture of Interfruver de
Mexico, a non-strategic asset of this subsidiary. Operating expenses were 16
million dollars, a decrease of 14 million dollars (46%) compared to the previous
fiscal year.
Operating loss totaled 6 million dollars, an improvement of 3 million (33%) with
respect to the same period last year. Operating cash flow for the period
increased 28% over that reported in 2001.
CONSOLIDATED RESULTS FOR THE FOURTH QUARTER Consolidated Net Sales
Savia's consolidated net sales were 119 million dollars, a decrease of 10%
compared to the same period last year. The reduction is the result of the
divestiture of Interfruver de Mexico, a non-strategic asset of Bionova. Of the
reported sales, 47% were denominated in dollars, 20% in euros, 11% in pesos and
22% in other currencies.
Consolidated Operating Income
Consolidated operating loss for the fourth quarter of 2002 totaled 9 million
dollars, this represents an improvement of 6 million dollars (41%) over the same
period last year. This figure is the result of an 8% reduction in operating
expenses and an 18% improvement in the cost of sales for Savia and its
subsidiaries.
Consolidated Operating Cash Flow
During this quarter, the operating cash flow improved 7 million dollars or 74%
with respect to the same period last year.
Consolidated Net Income
The net consolidated loss was 95 million dollars, which represents an
improvement of 37 million dollars (28%) with respect to the same period last
year. It is important to note that this figure includes the 68 million dollars
in extraordinary charges previously mentioned.
CONSOLIDATED RESULTS FOR THE FOURTH QUARTER OF 2002 FOR THE MAIN SUBSIDIARIES
Seminis
Sales for Seminis during the fourth quarter of 2002 were 81 million dollars, 2%
lower than sales reported for the same period in 2001. The company reported a
gross margin of 62%. Operating expenses were reduced by 5%, a decrease of 3
million dollars for the fourth quarter of 2002. The operating loss declined by 2
million dollars, a 39% improvement compared to the same period last year.
Operating cash flow for the fourth quarter of 2002 improved by 2 million dollars
(108%) over the same period in 2001. These results show the effect of the
initiatives implemented in September of 2000 that continue to strengthen the
business results.
Bionova
Sales for Bionova in the fourth quarter of 2002 were 26 million dollars,
representing a decrease of 30% with respect to the fourth quarter of 2001. The
operating loss improved by 1 million dollars (60%) with respect to the same
period last year. In addition, operating cash flow reported an improvement of
87% compared to the fourth quarter of 2001.
RELEVANT EVENTS
On Dec. 13, 2002, Savia S.A. de C.V. announced the signing of a letter of intent
with Fox Paine & Company, a San Francisco-based private equity fund. Under the
terms of the agreement Fox Paine and parties related to Savia will acquire the
outstanding shares of Seminis (Nasdaq:SMNS). This transaction is subject to
conditions established by the agreement and is expected to be closed during the
first semester of 2003.
As announced on Dec. 17, 2002, Savia continues its negotiations for the payment
of its bank debt. These negotiations are directly related with the signing of
the letter of intent above mentioned.
Savia participates in industries that offer high growth potential in Mexico and
internationally. Its principal subsidiaries include Seminis, a global leader in
the production and marketing of fruit and vegetable seeds; Bionova, a company
focused on the production, distribution and commercialization of fruits and
vegetables; and Desarrollo Inmobiliario Omega, a company dedicated to the
development of real estate in Northern Mexico.
Savia's financial statements are prepared in compliance with generally accepted
accounting principles in Mexico. For the consolidation of domestic subsidiaries,
Savia follows the guidelines set forth in bulletin B-10 and for foreign
companies follows the guidelines set forth in bulletin B-15. Seminis and Bionova
report following the generally accepted accounting principles of the United
States (GAAP) that differ from the generally accepted accounting principles of
Mexico. These results are adjusted to reflect the above-mentioned guidelines. In
addition, Seminis reports its fiscal year the first quarter of October through
the last of September. Savia reports its fiscal year on a calendar basis,
including in its consolidated results the operations of Seminis according to
calendar year.
Savia S.A. de C.V. and Subsidiaries
Statement of Consolidated Results
Results for the quarter October to December 2002
Million of Mexican Pesos and Dollars, except per share
and per ADR data
As of Dec. 31, 2002, Purchasing Power
Oct-Dec '02 Oct-Dec '01
Pesos Dollars Pesos Dollars
Net Sales 1,230 119 1,362 131
Cost of Sales 597 58 726 70
------ ------- ------- -------
Gross Profit 633 61 636 61
Operating Expenses 724 70 791 76
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Operating Income (91) (9) (155) (15)
EBITDA (24) (2) (94) (9)
Comprehensive Financing Income
Financial Expenses (87) (8) (96) (9)
Financial Income 15 1 14 1
Exchange Income (loss) 20 2 (73) (7)
Monetary Result (35) (3) (79) (8)
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(87) (8) (234) (23)
Other Income (expenses) (806) (78) (533) (51)
Income before Tax and Profit Sharing (984) (95) (922) (89)
Provision for Income Tax and Profit
Sharing (4) 0 (28) (3)
Net Income before Discontinued
Operations (980) (95) (894) (86)
Discontinued Operations 0 0 (465) (45)
Extraordinary Items 0 0 (1) 0
Net Income (980) (95) (1,360) (131)
Net Majority Income (912) (88) (727) (70)
Average Shares Outstanding (million
dollars) 467 462
Net Income per Share (pesos) (1.95) (1.57)
Net Income per ADR (dollars) (0.75) (0.61)
Savia S.A. de C.V. and Subsidiaries
Statement of Consolidated Results
Results for the period January to December 2002
Million of Mexican Pesos and Dollars, except per share
and per ADR data
As of Dec. 31, 2002, Purchasing Power
Jan-Dec '02 Jan-Dec '01
Pesos Dollars Pesos Dollars
Net Sales 6,605 637 7,405 715
Cost of Sales 3,312 319 4,657 450
------- ------- ------- -------
Gross Profit 3,293 318 2,748 265
Operating Expenses 2,862 276 3,331 321
------- ------- ------- -------
Operating Income 431 42 (583) (56)
EBITDA 683 66 (319) (31)
Comprehensive Financing Income
Financial Expenses (361) (35) (805) (78)
Financial Income 104 10 170 16
Exchange Income 194 19 (111) (11)
Monetary Result 9 1 131 13
------- ------- ------- -------
(53) (5) (615) (60)
Other Income (Expenses) (1,022) (99) (983) (95)
Income before Tax and Profit Sharing (644) (62) (2,181) (211)
Provision for Income Tax and Profit
Sharing 34 3 636 61
Net Income before Discontinued
Operations (678) (65) (2,817) (272)
Discontinued Operations 0 0 (767) (74)
Extraordinary Items 0 0 (388) (37)
Net Income (678) (65) (3,972) (383)
Net Majority Income (747) (72) (2,968) (286)
Average Shares Outstanding (million
dollars) 464 463
Net Income per Share (pesos) (1.61) (6.41)
Net Income per ADR (dollars) (0.62) (2.48)
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