Bell (SWX:BELL)

Bell is number 1 in the Swiss meat industry, supplier to the wholesale and retail trade, catering and food industry, since 1869. Owned to the tune of 66.3% by the major distributor Coop, Bell employs 6,062 people (full-time equivalents), including 3,113 in Switzerland.

In Europe, the French Polette Group and the German companies ZIMBO and Abraham are part of the Bell Group. In Switzerland, Bell is one of the most popular food brands in the country. More than 90% of the population knows the traditional Basel company. Statistically, Around fifty Bell products are sold in Switzerland every second.. Bell International has production facilities in Germany, France, Belgium, Spain and Hungary. The product portfolio includes high-quality sausage specialities from several regions of Europe. The main customers are the wholesale and retail trade. The business activities extend to several European countries, including Eastern Europe and Russia. Bell International employs just under 3,000 people; each year, the group produces more than 90,000 tonnes of delicatessen productsThe main brands are Abraham, ZIMBO, Maison de Savoie and Môssieur Polette.

Bell reported a slight decline in sales in the first half of 2011 to CHF 1.235 billion (-2.61 TP3Q). The decline in sales in the first half is attributable to changes in the scope of consolidation and the fall in the euro against the franc, which caused a decline of more than CHF 40 million. At constant exchange rates, sales would have increased by CHF 3.51 TP3Q. Net profit increased slightly to CHF 26.8 million (+2.5 TP3Q) and clearly beat analysts' expectationsThe group has a total equity ratio of 46.3% at the end of June, compared to 50.6% a year earlier.

The company has low sensitivity to market fluctuations, with a beta of 0.40. Volatility is slightly lower than that of the SMI, with 16.09%. The yield is appreciable, with 2.7% and the distribution ratio remains prudent, at 31%. The dividend has increased at an average annual rate of 5.51% over the last five years. The general liquidity ratio (current assets due within one year/current liabilities) is comfortable, at 1.28. The net profit margin is 2.56% over the last twelve rolling months and 2.76% over the last five years. The price to book ratio (PBR) stands at 1.27, while the PE confirms this attractive valuation, with 11.35. THE Return on equity (ROE) stands at 11.20% (10.70% on the average of the last five years). Earnings per share increased at a significant average annual rate of 12,84% over the past five years.

Bell has been beating the SMI in recent years and has been quite resilient to economic problems. We can see below that the stock recovered very quickly from the subprime crisis, and by anticipating the market.

We recently acquired Bell as part of our strategy Swiss Value Dividend Stocks, which protects us from currency and market fluctuations. Even though Bell is somewhat exposed in the Eurozone, it can also produce there and therefore benefit from the weakness of the single currency. Furthermore, it has also diversified into Russia and its domestic market remains its main cash cow.