Ebro Foods: Net profit rises to 87.6 million EUR

Madrid / ES. (epg) Spanish Ebro Foods chalked up a net profit of 87.6 million EUR in the first half of 2016, up 46.6 percent year on year, boosted by the positive evolution of its core businesses and the extraordinary income generated on the sale of the Puerto Rico rice business and a property in Madrid. A year-on-year growth of 2 percent was recorded in net turnover, to 1’216.8 million EUR. After increasing investment in advertising by 12 percent, the group posted an Ebitda of 164.4 million EUR, up 16.4 percent on the same period of 2015, and an Ebit of 127.7 million EUR, 17.5 percent more than in the first half of last year. Our net debt is 9.5 percent smaller than in the first six months of 2015, standing at 461.9 million EUR, which includes the strategic acquisitions of RiceSelect, Roland Monterrat and Celnat.

Core businesses

Rice: Against a backdrop of stable raw material prices, except for Japonica rice and special rice varieties for risotto and paella in Europe, the division had a highly satisfactory half year, underpinned by the good performance of our businesses, which have grown in the categories with greatest value added (Sabroz, special rice varieties, aromatic rice, Ready to Serve (RTS) and instant rice. RTS achieved an outstanding performance both in the USA and in Spain, with 15 percent and 30 percent growth, respectively. Within the Ancient Grains category, SOS Quinoa and Brillante Quinoa have been successfully launched in Spain. The division posted a turnover of 637.4 million EUR and Ebitda of 97.4 million EUR.

Pasta: Raw material prices remained more or less at the levels to which they fell in the second half of 2015, although the quality of the crop in southern Europe is not as good as in previous years. In France, the strong growth of the brand business can be put down to the success of the gnocchi for frying, sales of which rose by 45 percent, the sturdy development of smaller businesses, such as couscous, with a 20 percent growth in sales, and ready meals, up 30 percent. Garofalo maintains its excellent performance in all the countries in which the group distributes the brand, with especially good results in Spain and France, where it has doubled its sales and market share. Meanwhile, there are signs of an upturn in sales of the North American business, thanks to the important work done to boost the Health+Wellness category. The division posted a turnover of 609.2 million EUR and an Ebitda of 72.2 million EUR.

An intense period with a very positive balance

The intense business activity of the Group during the first half of this year has strengthened its leadership and competitive position and produced satisfactory consolidated results.

1. The Company has achieved inorganic growth, opening up a new branch of business in the field of ecological food through our acquisition of the French company Celnat, a major player in this segment, which will share its expertise with all the group companies.
2. The Company has also worked hard on organic growth in the following areas:
   • United Kingdom, purchasing a plant in Berkley and setting up EbroFrost UK, which will focus on the categories of frozen food and fresh food not requiring pasteurisation.
   • India, Thailand and France (specifically in Vitrolles), approving investments to increase our industrial capacity, in view of the good business results obtained in those countries.
3. The Company has expanded our portfolio with:
   • The launching of organic rice
   • Concepts based on Ancient Grains in our leading markets
   • Extension of the Gluten Free range
   • Penetration of the fresh pizza market in France, a segment in which we hope to become a benchmark.
4. The Company has gone one step further in the concentration of our resources by selling our rice business in Puerto Rico, a market which was not strategic for the group, and a property asset in Madrid not related to the group’s business activities.