Martin Braun-Group: Pandemic causes sales to drop significantly

Hannover / DE. (oe) During the 2020 financial year Germany’s Martin Braun-Group, a subsidiary of Oetker-Group, was unable to continue the growth process that had taken place over many years and had to report a significant decline in sales of 13.1 percent. In addition, local business development was burdened in part by negative currency effects, above all the devaluation of the Turkish Lira. Adjusted for foreign exchange, the organic change in sales amounted to -11.4 percent.

As a result of the drop in demand during the corona virus crisis, sales did not develop as originally planned. In the first three months of the crisis in 2020, bakeries and food service companies were severely affected worldwide, with many customers in numerous countries closed for months. The second corona virus wave in fall brought with it further numerous local and national Lockdowns in the target markets.

In Germany, too, artisan bakeries suffered for several weeks, as many end consumers switched to so-called one-stop shopping in retail and also preferred packaged baked goods at times. The situation was equally difficult for the high-turnover outlets of the bakery chain stores in high-frequency locations, which generally generate a great deal of to-go/out-of-home sales. These stores, as well as the numerous food service customers of the Martin Braun-Group, recorded significant declines.

One very pleasing exception was the area of organic yeast. The need of end consumers to bake more at home has had an impact here, as has the continuing rise in the organic trend. With the aid of a comprehensive package of measures, the group responded to the difficult market conditions and was thus able to mitigate part of the decline in sales.

Outlook

The Martin Braun Group expects the market environment to remain challenging in 2021 and to continue to be negatively impacted by the effects of the Covid -19 pandemic. The greatest risk is the uncertainty about the speed at which individual country markets will recover from the Covid -19 pandemic. For 2021, the group is issuing a positive sales fore- cast for all regions and expects a slight increase in sales overall. The foreign regions in particular are likely to increase their sales again. According to our forecast, this growth will be made possible by numerous operational measures such as the expansion of product ranges for the food service market, both in the ingredients and frozen segments, the ever-greater focus of projects in food retailing throughout Europe and the expansion of new target groups. At the same time, however, risks are increasing due to the ongoing consolidation in the European bakery market.