Corbion Q3 Underlying Sales Growth Affected by Exchange Rates
23 Oct 2013 --- Corbion has reported 0.8% organic sales growth in Q3 2013, with net sales of €188.5 million. Volume growth of 3.3% was offset by a negative currency effect of 6.3%. EBITDA before one - off costs at constant currencies in creased by €1. 8 million vs Q3 2012, the effect of exchange rate movements on EBITDA was €3.0 million negative.
In Q3 Corbion started a share buy-back program of €200 million, and distributed €50 million through a cash dividend of €0.70 per ordinary share. "With the divestment of our Bakery Supplies businesses completed early July, this has been the first quarter in which our organization fully operated as a biobased products company. We are in the process of finalizing the readjustment of our organization, in line with our strategy. I am therefore pleased to see that the positive underlying v olume and EBITDA trend of our bio-based activities continued. The full year 2013 will show the anticipated progress towards the strategic objectives for 2016 as stated during the Capital Markets Day in June. And with the recent announcement of the tender offer for t he buy - back of €145 Million, we are delivering the final part of the promised capital return of €250 Million to our shareholders from the proceeds of the divestment ", commented Gerard Hoetmer, CEO.
Key financial highlights Q3 2013:
• Net Sales organic growth was 0.8% vs Q3 2012. Volume growth was 3.3%.
• EBITDA before one - off costs at constant currency was €29.1 million, an increase of 6.6% vs Q3 2012. Reported EBITDA was €26.1 million.
• EBITDA margin before one - off costs was 13.8 % (Q3 2012: 14.0%). Excluding intercompany sales reclassification, Q3 2013 margin was 14.1%.
• One - off costs of €2.8 million were related to refocus the new organization upon the divestment of the Bakery Supplies businesses.
The company now expect volumes sold to continue to grow in Q4 , albeit at somewhat lower prices than in 2012. “As our raw material cover positions will continue to be replaced by new contracts, our competitive position will improve further. We expect a continuation of the currency effects in Q4, as seen in Q3. Ongoing investments in R&D have increased our cost base to strengthen prospects for our future growth,” the company reported.
Net sales for the Biobased Food Ingredients segment in Q3 2013 decreased by 3.1% to €145 million, mainly due to weaker exchange rates. The organic growth was slightly positive (0.2%) mainly on stronger volumes (0.6%). The average net sales price reduced by 0.4 % due to mix effects and price reductions in selective market segments to strengthen our market position. The EBITDA margin decrease d from 19. 2 % to 18.7%. Higher volumes were negated by negative currency impact. Next to the impact of the weaker US dollar (mostly a translation effect), a negative transaction effect was caused by Japanese Yen denominated exports. Excluding the intercompany sales reclassification to 3rd party sales, the EBITDA margin would have increased from 19.2% to 19.3%. In our Bakery market unit , volumes decrease d slightly , in line with the market . However, the most recent information points to a slight pick-up in market volumes. The Meat and Food market units continued the improved trend s in volumes sold evident in Q2. In the Meat market unit an expanded Verdad portfolio was commercially launched. These products can be categorised as clean label solutions being “fermented sugar” without compromising taste or shelf life.
Volume growth in Biochemicals was 14.6%. Volumes were supported by an increase in lower cost/lower price acidifier s for the animal feed industry. These are derived from by - products which help balance out and improve the profitability of our supply chain. The good geographical balance of our portfolio supported our growth as well. The EBITDA was impacted by higher innovation costs, mainly in PLA/Bioplastics and new molecules. Margin as a % of sales was also impacted by the growth in lower priced animal feed products. Aloapur, our high value-added product for animal health, was introduced in Q3 to a positive reception from customers. Sales of lactides, the source material for bioplastics/PLA, increased substantially, albeit from a low base. We continue to progress the discussion s with our partners about bioplastics/PLA opportunities.
