Bell Food Group publishes definitive terms of issue of the planned capital increase with subscription rights and results for the first quarter of 2018

At the proposal of the Board of Directors, the Annual General Meeting of the shareholders of Bell Food Group decided on April 10, 2018 to increase the company's current share capital of CHF 2'000'000 divided into 4'000'000 registered shares with a par value of CHF 0.50 each by issuing a maximum of 4'000'000 registered shares with a par value of CHF 0.50 each by means of a rights offering to existing shareholders. Of these 4'000'000 registered shares, 2,285,712 new registered shares will be offered to existing shareholders of Bell Food Group at a subscription price of CHF 268.00 each as part of the planned ordinary capital increase. Existing shareholders will receive one subscription right for each registered share they hold as of May 28, 2018 after the close of trading to subscribe for new shares from the capital increase. For every 7 subscription rights held, 4 new shares can be subscribed at a subscription price of CHF 268.00 per share.

The issue and listing prospectus will be published today. The subscription period for the new shares begins on May 29, 2018 and ends on June 6, 2018, 12:00 noon (CEST). The subscription rights will be tradable on the SIX Swiss Exchange ("SIX") from May 29, 2018 to June 4, 2018. The first trading day of the new registered shares on SIX is scheduled for June 8, 2018.
The Coop Group Cooperative in Basel, which holds a 66.3% stake in the Bell Food Group, has undertaken to fully exercise the subscription rights to which it is entitled and to acquire the corresponding number of new Bell Food Group shares.
Expected timetable for the capital increase with subscription rights

Results for the first quarter of 2018

In connection with the planned capital increase by means of a rights issue, Bell Food Group is also publishing its results for the first quarter of 2018 today.

The first quarter of 2018 was significantly influenced by the acquisition of Hügli, which has been consolidated since January 1, 2018. Net sales rose by CHF 171.6 million, or 20.9%, from CHF 822.1 million in the first quarter of 2017 to CHF 993.7 million in the first quarter of 2018. Adjusted for currency effects, growth amounted to CHF 150 million or 18.4%. Of the currency-adjusted increase in net sales, CHF 105 million is attributable to the integration of Hügli and CHF 45 million (+5.6%) to the growth of the existing business units, which all contributed to this positive development.

Because of Hügli's higher gross profit margin, the Bell Food Group's margin increased by 1.3% . However, Hügli's more labor-intensive business model reduces this margin increase. Adjusted for currency effects, the contribution margin after deduction of these personnel costs rose by CHF 34 million or 0.6%.
Transport costs increased as a result of the volume growth. As a result of the significant increase in quality requirements and the advanced useful life of individual plants in Switzerland, the intensity of maintenance work remained high. Other operating costs were in line with the budget.
EBITDA increased by CHF 11.4 million or 22.7% from CHF 50.2 million in the first quarter of 2017 to CHF 61.6 million in the first quarter of 2018.

The net assets of Hügli are fully integrated in the Bell Food Group's balance sheet as at March 31, 2018, which led to an increase in total assets of CHF 541.5 million or 25.9% from CHF 2,093.0 million as at December 31, 2017 to CHF 2,634.5 million as at March 31, 2018. The acquisition of Hügli is also the reason for the increase in minority interests from CHF 0.2 million as at 31 December 2017 to CHF 81.9 million as at 31 March 2018. The payment of the second purchase price tranche for the complete takeover of Hilcona and the issue of bonds in the amount of CHF 350 million also had a significant impact on the balance sheet. Net financial liabilities increased by CHF 452.2 million or 70.9% from CHF 637.4 million as at December 31, 2017 to CHF 1,089.6 million as at March 31, 2018, while the equity ratio fell from 37.5% to 32.9%. We remain committed to our strategic goal of an equity ratio of more than 40%.With the repayment of the CHF 175 million bond maturing in May and the planned capital increase of around CHF 612.6 million, we will once again approach the targeted equity ratio. We also plan to acquire the remaining minority interests in Hügli during the course of the financial year, which will be reflected in equity. We are aiming for a ratio of net financial liabilities to EBITDA of 2.5x.

Management Report Divisions

The market intensity and the associated pressure on margins continued to increase in Switzerland. The Bell Switzerland division increased sales by 2% in the first quarter of 2018. Sales in the retail channel were stable. Growth was achieved primarily in the lower-margin wholesale trade and the food processing industry. Easter business was lower than expected due to the weather, while the barbecue season got off to a good start.

In the Bell Germany division, sales increased further thanks to targeted activities. However, the price reductions due to lower raw material prices reduced the net revenue of the Bell Germany division.
The volume growth also continued in the Bell International division. The business units in France, Poland and Hungary recorded positive growth rates in the first quarter of 2018. The competitive pressure on Hubers, our poultry specialist, has intensified. Sales are stable, but the increased demands on quality levels are leading to higher maintenance and personnel costs.
In the Convenience division, consisting of Hilcona/Eisberg and Hügli, we recorded significant sales growth compared to the first quarter of 2017 due to the Hügli acquisition. We are on track with the integration of Hügli: synergy potential has been identified and the first concrete steps have been initiated. Hilcona/Eisberg is developing in line with our expectations.

Other events

In April 2018, the assets of Service Gastronomie Molard in Geneva were acquired. The Bell Food Group is thus expanding its position in supplying the catering/hotel industry.
On April 25, 2018, the Bell Food Group announced that Eisberg, a subsidiary of the Bell Food Group, had acquired Sylvain & CO SA, a family business based in Essert-sous-Champvent in the canton of Vaud. Sylvain & CO SA is a leading supplier of ultra-fresh convenience products in Switzerland. With 180 employees, the company, which specializes in the production of fresh and ready-prepared salads, vegetables and fruit, generated sales of around CHF 40 million in 2017.
Outlook

Commodity prices for pork are developing in line with our expectations. Due to the acquisition of Hügli, the Bell Food Group will generate more than a quarter of its total sales in the high-margin convenience segment. The integration of Hügli is progressing according to plan.
Key figures (PDF)
The Bell Food Group's public tender offer for all publicly held Hügli bearer shares will also be completed today. All publications of the Bell Food Group in connection with the offer are available at www.bellfoodgroup.com/publictenderoffer.

About Bell Food Group

The Bell Food Group is one of the leading meat and convenience producers in Europe with over 50 production plants. The product range includes a complete assortment of meat products as well as fresh and long-life convenience products. With the Bell, Hilcona, Eisberg and Hügli brands, the Group covers a wide range of customer needs. Its customers include the retail and food service sectors as well as the food industry. More than 10,000 employees generated sales of around CHF 3.6 billion in 2017. The Bell Food Group is listed on the Swiss stock exchange.

This announcement constitutes neither an offer to sell nor a solicitation to buy securities. It is neither an offering prospectus within the meaning of Article 652a of the Swiss Code of Obligations nor a listing prospectus within the meaning of the listing rules of the SIX Swiss Exchange. Copies of this communication may not be sent or otherwise distributed in or from jurisdictions where this is restricted or prohibited by law. The information contained in this announcement does not constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction in which such offer or solicitation would be unlawful prior to registration (or the granting of an exemption therefrom) or any other act in violation of securities laws. Any decision to purchase or subscribe for shares in Bell Food Group Ltd (""Bell Group"") should be made solely on the basis of an offering and listing prospectus published by the company for that purpose. Copies of the relevant offering and listing prospectus (including the supplement to the offering and listing prospectus) may be obtained free of charge in Switzerland from Bell Food Group, Media Relations, Email: media@bellfoodgroup.com / telephone +41 58 326 30 30.
This document is not for publication or distribution in the United States of America, Canada, Australia or Japan and it does not constitute an offer or invitation to subscribe for or purchase any securities in such countries or in any other jurisdiction. In particular, the document and the information contained herein should not be distributed or otherwise transmitted into the United States of America or to U.S. persons (as defined in the U.S. Securities Act of 1933, as amended (the ""Securities Act"")) or to publications with a general circulation in the United States. This document does not constitute an offer or invitation to subscribe for or to purchase any securities in the United States of America. The securities referred to herein have not been and will not be registered under the Securities Act, or the laws of any state, and may not be offered or sold in the United States of America absent registration under or an exemption from registration under the Securities Act. There will be no public offering of the securities in the United States of America.

The information contained herein does not constitute an offer of securities to the public in the United Kingdom. No prospectus offering securities to the public will be published in the United Kingdom. This document is only being distributed to and is only directed at (i) persons who are outside the United Kingdom or (ii) to investment professionals falling within article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the ""Order"") or (iii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within article 49(2)(a) to (d) of the Order (all such persons together being referred to as ""relevant persons""). The securities are only available to, and any invitation, offer or agreement to subscribe, purchase or otherwise acquire such securities will be engaged in only with, relevant persons. Any person who is not a relevant person should not act or rely on this document or any of its contents.

Any offer of securities to the public that may be deemed to be made pursuant to this communication in any member state of the European Economic Area (each an ""EEA Member State"") that has implemented Directive 2003/71/EC (together with the 2010 PD Amending Directive 2010/73/EU, including any applicable implementing measures in any Member State, the ""Prospectus Directive"") is only addressed to qualified investors in that Member State within the meaning of the Prospectus Directive.

This document contains certain forward-looking statements. Such forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, financial condition, development or performance of the Company to be materially different from any future results, financial condition, development or performance expressed or implied by such statements. Such factors may include, in particular: (1) the completion and consummation of the acquisition of Hügli Holding Aktiengesellschaft and the capital increase of Bell Group, and (2) other known and unknown risks relating to the business activities of Bell Group and Hügli Holding Aktiengesellschaft. In view of these uncertainties, no reliance should be placed on such forward-looking statements. The Bell Group assumes no obligation to update such forward-looking statements or to conform them to future events or developments.