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Ebro Foods H1 Net Profit up 5.5%

Source: Ebro Foods, S.A.
30/07/2013

29 July 2013 - Ebro posted a net profit of Euro 71 million in the first half of 2013 with a year-on-year growth of 5.5%.

The net turnover slid 1.1% over the twelve-month period to €1,001,764 million, as a result of the change in the scope of consolidation following the sale of the Nomen, La Parrilla, La Cazuela, Pavo Real and Nobleza brands in compliance with the condition imposed by the Spanish antitrust authorities for authorising the purchase of the SOS rice business.

Even after shedding Nomen and in spite of the exchange rate effect and increasing investment in advertising by 13%, the group’s EBITDA was €131.5 million, barely 2% down on the first half of last year. On like-for-like terms of consolidation scope, exchange rates and advertising, EBITDA would have chalked up a year-on-year growth of 4%, of over €5 million. The EBIT, or net operating profit, was €103.4 million.

The company’s debt at 30 June 2013 stood at €324 million, 10% less than the figure reported a year ago. This includes the amount set aside for payment of the ordinary and extraordinary dividends throughout the year and the outlay for purchasing a plant in India.

This healthy balance sheet will enable the company to make the necessary investments to achieve the objectives established in its Strategic Plan. Over the past six months, the following operations were undertaken as part of that plan:

1. Embarking on new projects for organic growth, such as our entry into several countries in Africa and South America.
2. Development of inorganic projects, such as our purchases in Italy and India.
3. Expansion of our operations in countries in which we already had a platform, such as the introduction of a new line of sauces in Canada through the brand Ronzoni®.
4. Major R+D+I activity designed to differentiate our product portfolio, resulting in the launching of new brands and new product ranges, especially in Spain.
5. Intense marketing activities to underpin the leadership of our brands.

Core businesses

RICE

As far as our brands are concerned, business development was satisfactory during the period with increased market shares in Spain, United States and Portugal. However, from an industrial point of view, the division was hampered by massive default of contracts for basmati rice supplies in India and the severe drought persisting in Texas.

Against this backdrop, the division posted a turnover of €553.7 million and EBITDA of €68.2 million.


PASTA

As durum wheat prices remain stable, the development of the pasta division has been positive and the change of strategy implemented in the USA in the second half of 2012 is now starting to produce benefits.

Our branded products achieved a 2.6% growth in volume in Europe, and in the USA the consumption of New World Pasta brands grew by 2.9% while the category on the whole dropped 0.3% over the period.

This division posted a turnover of €471.4 million and EBITDA of €67 million.



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