Ebro Foods: closes the best year in its history

Madrid / ES. (epg) Spain’s Ebro Foods S.A. closes the best year in its history after spending EUR 21 million on covid measures. In a year of outstanding results, Ebro distributes a historic dividend of EUR 386 million to support its shareholders in the present complicated economic situation. Net turnover grew by 15.1 percent in 2020 to EUR 3,237 million, pushed up by the positive evolution of our businesses during the pandemic and efficient organisation of production to meet demand peaks. Our Ebitda-A reached EUR 435 million, 27 percent more than in 2019, while net profit rose by 35.7 percent year on year to EUR 192.4 million. After distributing abundant dividends (an ordinary dividend of EUR 87 million and an extraordinary dividend of EUR 298.5 million) we reduced our net debt by EUR 49 million to EUR 951 million. This included CAPEX investments of EUR 119 million and shedding part of our dry pasta business in the USA, bringing in EUR 195 million. After year-end, in January 2021, we sold our dry pasta business in Canada for CAD 160 million.

Core businesses

Rice: In raw materials, we incurred additional costs of EUR 30 million due to the effects of hurricane Laura in the North American market and forecasts of a smaller harvest in Europe owing to the storms and flooding in Italy and salinity issues in Spain. Lockdowns and fears of shortages in the successive waves of Covid have had a positive effects on the performance of our brands, which increased sales by almost 18 percent. Tilda especially, in its first full year in the Group, surpassed all expectations. Division sales totalled EUR 1,817.6 million, with an Ebitda-A of EUR 235.8 million.

Pasta: This division also suffered raw material price rises of around EUR 29 million, mainly affecting our European business. Just as in rice, sales reflected the increased demand deriving from the pandemic, which we were able to meet comfortably by optimising our production capacity to focus on the products in greatest demand, at the expense of those with a higher value added. The present price war scenario in Europe is forcing us to step up investment to restore these niche categories to their place on the shelves. Division sales totalled EUR 1,502 million, with an Ebitda-A of EUR 213.5 million.

Extraordinary results shared with stakeholders

Although last year was extremely complicated owing to the appearance of Covid-19, our Group can take a clearly positive reading of it, having proved able to react immediately to the impact of the pandemic and continue developing our business strategy, obtaining excellent results that we have been able to share with our stakeholders. We highlight the following achievements during the year:

1. Preservation of all jobs without requesting any governmental aid.
2. Large outlay in social responsibility, investing EUR 21 million in protection measures against Covid and compensation for our employees’ efforts and to mitigate the health and social emergency situations in all the countries in which we operate.
3. A historic distribution of dividends, between ordinary and extraordinary, in a sum of EUR 386 million, with a view to supporting our shareholders in an extremely difficult economic context.
4. The excellent revenue levels in spite of a EUR 60 million increase in raw material costs.
5. Keeping shelves fully stocked to guarantee consumers’ peace of mind at the times of greatest uncertainty.
6. The strong positioning of our brands, which managed to increase their market shares.
7. Ratification of our venture in Tilda, which has proved to be an important strategic investment with excellent returns.
8. Progress in the development of our strategic lines, culminating in the successful divestment of our dry pasta businesses in the USA and Canada to continue concentrating our resources and efforts in businesses with high value added.

We are braced for a foreseeably complicated 2021, owing to uncertainty regarding the evolution of the pandemic, high inflation in freight and commodities, impoverished consumers fatigued by the seemingly unending health crisis, pressure from distribution, the return of promotions and reactivation of competition. In the face of this complex scenario, we place our trust in the strength and soundness that our business model has already shown in other adverse circumstances.