Ebro Foods: Net profit up 4.3 percent in H1-2021

Madrid / ES. (epg) Spain’s Ebro Foods S.A. announced its interim results for the first half 2021 on July 28. The Group’s net turnover reached EUR 1,379.7 million. Although comparison with last year is distorted by the compulsive buying at the beginning of the pandemic in 2020, in terms of CAGR 2021/2019 the turnover rose by 6.4 percent, which shows the strength and leadership of our brands in this new competitive environment. Ebitda-A is down 6 percent to EUR 177.2 million year on year and the Ebitda-A margin has grown by 10 basis points to 12.8 percent, in spite of the increased costs during the period. At the same time, Net Profit is up 4.3 percent to EUR 107 million. Net debt stands at EUR 947.7 million, EUR 3.2 million less than at year-end 2020. This includes the dividend payments in April and June and the accrued dividend to be paid in October in a sum of EUR 29.2 million, EUR 49 million in CAPEX investments, an increase of EUR 115 million in working capital since year-end owing to the positions taken in raw materials during the period, EUR 77 million in corporate income tax payments and the proceeds of EUR 195 million obtained in the sale of the North American dry pasta business.

Core businesses

Rice: The Division is still dealing with major inflation in logistics, commodities, energy, fuels, etc. Just in the transport of aromatic rice varieties from Asia, which are essential for our subsidiaries Riviana and Tilda, the cost has more than tripled since last year. Sourcing diversification and the increased working capital are providing very strong defence against the expected 15 percent reduction in the North American harvest and 50 percent reduction of crop area in Andalusia (Spain). Against this complicated backdrop, another of our crucial strengths is our investment in convenience products, which have achieved double-digit growth in La Rinconada is due to come on stream in October. The rice division has posted sales of EUR 865.9 million and an Ebitda-A of EUR 116.,2 million.

Pasta: This Division has also had to deal with high commodity prices during the period and a high cost of transport to the USA, which is a very important market for the Bertagni and Garofalo businesses. One milestone worth mentioning during the period was the conclusion of the Group’s divestment of its dry pasta business in North America, with the sale of the Ronzoni brand and the Winchester and Fresno plants. From a business point of view, we highlight the double-digit growth of sauces sales and the increased sales of fresh pasta, by over 8 percent. The pasta division has posted sales of EUR 540 million and an Ebitda-A of EUR 68.8 million.

Strong sales and firm progress in our Strategic Plan 2019-2021

One of the most noteworthy aspects of the period was the strengthened leadership of our brands in all the markets in which we are present and the outstanding sales performance of our premium, convenience and fresh products, which are still achieving double-digit growth. The company has efficiently dealt with extraordinary inflation in costs, minimising its impact on our profit and loss account while forging ahead with our three-year strategic plan, successfully completing our divestment of the dry pasta business in North America and entering into exclusive negotiations with CVC Capital Partners for divestment of the dry pasta, sauces, semolina and couscous businesses of Panzani, with a view to focusing our efforts and resources on our strategic investment in the fresh pasta, premium and convenience segments.

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