AMSTERDAM – Loss of sales volume in frozen dough had a negative effect in bakery results for Corbion nv in the first half of the fiscal year. The declines in bakery affected Corbion’s Food business, which saw sales slip to €336.4 million ($395 million) from €336.8 million in the first half of the previous year.
|Tjerk de Ruiter, c.e.o. of Corbion|
“Top-line development in the first half of the year fell short of our ambition level, mainly due to a shortfall in bakery,” said Tjerk de Ruiter, chief executive officer of Corbion, when financial results were given Aug. 9. “The first results of our actions to recover sales in bakery became visible in the course of the second quarter. Based on this, and positive developments in other parts of the business, we are optimistic about our top-line performance in the second half of the year.”
Corbion’s companywide first-half net sales of €461.9 million ($542.3 million) were up 1.4% from €455.7 million in the first of the previous year. Organic net sales were down 0.9%, and volume was down 1.6%. EBITDA excluding one-off items was €88.3 million ($103.7 million), down 1.7% from €89.8 million in the first half of the previous year.
Within the Biobased Ingredients segment, which includes Food and Biochemicals, net sales grew 1.2% to €449.9 million from €444.5 million. EBITDA excluding one-off items was €91.2 million, down 1% from €92.1 million.
Within the Food business, EBITDA excluding one-off items fell 1.2% to €71.7 million from €72.6 million.
“A decrease in sales was expected for the first quarter as we lost some volumes in more commoditized parts of the U.S. meat market and optimized the customer and s.k.u. (stock-keeping unit) portfolio in bakery in Q2 2016,” Corbion said of its Food business. “However, the sales reduction was more pronounced than anticipated due to losses at frozen dough and challenges in executing our bakery channel strategy. We are working to recover the lost business, with the first results of this recovery process seen in Q2.”
In meat, Corbion in the United States regained some of the volume lost last year. The portfolio mix shift towards natural preservation systems continued to support margin improvements. Latin America drove meat sales growth outside the United States. Corbion saw good sales growth in confectionery while overall sales increased in beverages and dairy, too.
Within the Biochemicals business, net sales grew 5.4% to €113.5 million from €107.7 million while EBITDA excluding one-off items was €29.1 million, up 2.5% from €28.4 million. All markets had sales volume growth except for animal health.
Corbion’s Biobased Innovations segment in the first half recorded net sales of €12 million, up 7.1% from €11.2 million. Losses before interest, tax, depreciation and amortization were €2.9 million, which compared to losses of €2.3 million in the previous year’s first half. A polylactic acid joint venture with Total, a French oil company, became operational in March.
One-off items for Amsterdam-based Corbion in the first half included a one-off gain of €6.4 million related to the sale of the subsidiary Total Corbion PLA (Thailand) Ltd. to the joint venture Total Corbion PLA; a one-off loss of €600,000 related to additional impairment of a powder blending plant in Kansas; a book loss of €400,000 related to the sale of machinery at the powder blending plant; and positive tax effects of €500,000.Corbion’s outlook for 2017 remained unchanged from the outlook given in its first-quarter interim management statement on April 25. Corbion expects organic net sales growth in Biobased Ingredients to end up below the multi-year guidance bandwidth of 2-4%. Corbion EBITDA, excluding one-off items, in 2017 is expected to be slightly lower than the €170.1 million recorded in 2016.