Corbion EBITDA rises despite volume declines

by Jeff Gelski
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Corbion sign
EBITDA excluding one-off items jumped 15% in the first nine months of the year for Corbion.

AMSTERDAM, THE NETHERLANDS — EBITDA excluding one-off items jumped 15% to 134.8 million ($146.6 million) in the first nine months of the year for Corbion nv even though net sales slipped 0.4% to 685.2 million ($745.3 million) and volume dropped 0.8%.

Tjerk De Ruiter, Corbion
Tjerk de Ruiter, c.e.o. of Corbion

“Our profitability increased substantially driven by a combination of business mix improvements, cost savings and lower input costs,” said Tjerk de Ruiter, chief executive officer of Amsterdam-based Corbion, when results were given Oct. 21. “However our top-line growth in Q3 was clearly below our ambition level.”

In bakery, sales decreased in a stable U.S. bread market. Closing a Kansas plant in the second quarter decreased the number of stock-keeping units and moved smaller customers to an indirect delivery model, which negatively impacted Corbion volumes.

Companywide, EBITDA excluding one-off items of 134.8 million over the first nine months marked an organic increase of 16% from 117.1 million in the same time period of the previous year. Net sales of 685.2 million marked an organic decrease of 0.2% from 687.9 million.

Corbion Kansas facility
Closing a Kansas plant negatively impacted Corbion's bakery volumes.

Improving the portfolio profitability and the adverse effects of customer consolidation negatively affected growth, Mr. de Ruiter said.

“We anticipate these effects to be of a temporary nature and remain confident that we will achieve our multi-year guidance,” he said.

In Corbion’s Biobased Ingredients, EBITDA excluding one-off items was 137.6 million, which was up 15% from 119.8 million. Net sales of 667.7 million were down 1% from 674.6 million. Food, biochemicals and central costs decreased organically by 0.8% over the nine-month period. Corbion expects full-year growth in the food business segment to end up below the multi-year (2015-18 compound annual growth rate) guidance range of 1% to 3%.

Within Biobased Ingredients, the food business segment, which includes bakery, saw net sales drop 2.2% to 507.1 million from 518.3 million while EBITDA excluding one-off items was 110.3 million, up 11% from 99.4 million. The egg situation in 2016, as compared to 2015, had a negative effect on the bakery segment.

“Mid-2015 we were able to accommodate a surge in demand for higher priced egg-containing products due to an outbreak of avian flu in the U.S.,” Corbion said. “A reversal of these effects has put additional pressure on both volumes and price/mix, particularly in Q3.”

Corbion meat
Corbion's meat sales decreased.

In meat, sales decreased as customer consolidation in the United States put pressure on volumes and prices for more commoditized parts of the market.

Also within Biobased Ingredients, the biochemical business segment turned in EBITDA excluding one-off items of 41.5 million, up 18%, and net sales of 160.6 million, up 2.8%. Volume growth related to lactide/polylactic acid (PLA) drove the sales increase.

Corbion’s Biobased Innovations reported a loss before interest, taxes, depreciation and amortization, excluding one-off items, of 2.8 million, which compared to a loss of 2.7 million in the first nine months of the previous year. Net sales of 17.5 million were up 32% from 13.3 million.

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