Dutch ingredients group Numico said that it would be forced to write off as much as US$350 million in goodwill and brands for its Rexall Sundown operation in the US because of a downturn in the herb and vitamin market.
The announcement came as Numico released preliminary figures for 2001 which showed a 14% rise in overall sales to €4.3 billion.
Rexall was acquired by Numico in June 2000 and gave the Dutch group a substantial 26% share of the US market for herbs and vitamins. But that market suffered badly last year, especially following the events of September 11, and the unit is now being restructured under the new leadership of CEO Ralph Denisco.
Numico said the exact amount of the write off was still being discussed with its auditors, but that it expected it to be in the region of US$310 million to $352 million.
Final quarter sales in the US were 7% lower than in 2000 at €586 million, largely as a result of the terrorist attacks in September which affected all consumer markets. Full year sales in the US were up 18% to €2.6 billion. New or improved products, especially in the weight management category, generated over US$200 million in 2001, the company said.
Numico's General Nutrition Companies (GNC) unit in the US lifted its full-year sales US$ 1,428 million, a rise of 2%, but Rexall's full-year sales of US$526 million were impacted by a 23% slide in the final quarter.
European sales were up 9% for the year to €1.4 billion with rises of 10% in northern Europe, 33% in eastern Europe and 8% in southern Europe. Total sales in Asia, the rest of the Americas and Africa were ahead 8% to €356 million. Numico's consumer diets and sports nutrition unit was the best performer for the year, lifting slaes by 30% to €1.2 billion helped by good performances from GNC and good consumer acceptance of the company's weight management products.
The clinical nutrition and diets operations lifted sales by 13% to €480 million thanks mainly to an excellent performance in Germany. Sales in the infant nutrition business rose 9% to €998 million for the year on the back of strong performances in Indonesia, Southern and eastern Europe.