Corbion Reports Increased Sales, Buoyed by Currencies
12 Aug 2015 --- Dutch group Corbion has reported Q2 2015 sales of €232.3m, an increase of 23.4% compared to Q2 2014. Organic sales growth was 4.5%, mostly driven by volume growth. Net sales in HY 2015 increased by 21.9% to €452.3 million (2014: € 371.0 million) driven by currencies (16.5%), acquisition (0.7%), and organic growth (4.7%).
The currency impact was mainly driven by a stronger US dollar against the euro. Organic sales growth in Biobased Ingredients was 3.5%, comprising volume growth 3.7%, and price/mix effects -0.2%. Volume growth in Food was driven by Bakery and Meat. Sales growth in Biochemicals was notably in Electronics and Pharma. Organic growth in Biobased Innovations was driven by Bioplastics.
Net sales in HY 2015 increased by 21.9% to € 452.3 million (2014: € 371.0 million) driven by currencies (16.5%), acquisition (0.7%), and organic growth (4.7%). Exchange rate movements impacted the sales figures positively by € 61.2 million mainly driven by a stronger US dollar. The acquisition impact is related to the acquisition of the Archer Daniels Midland (ADM) lactic acid business effective as of 31 March 2015.
Organic growth in the Biobased Ingredients business unit of 3.9% was driven by both business segments. In business segment Food, volume growth (4.0%) was driving organic growth (3.4%). Price/mix in Food was slightly negative (-0.6%). In the Biochemicals business segment, price/mix increased by 4.5% driven by strong Medical Biomaterial sale and the lower contribution of Feed acidifiers. The growth in Biobased Innovations was driven by Bioplastics.
For 2015, in our business segment Food, Corbion anticipates growth at the upper half of its guidance range. In the business segment Biochemicals, due to the more difficult comparison it expects to grow near the lower end of the guidance range in 2015. The majority of the targeted €20 million savings from the Streamline program will be achieved in 2015 rather than in 2016. In Biobased Innovations, the company anticipates in H2 a higher R&D expense level. Overall it expects for H2 a slightly lower EBITDA excluding one-off items, compared to H1 2015.
In Q2, the Biobased Ingredients business unit showed sales growth of 22.3% driven by organic growth of 3.5% and a currency impact of 17.3 %. The organic growth of 3.5% was towards the top end of the guidance range (2015-2018 CAGR) of 2-4%. At the end of Q1, Corbion acquired the lactic acid business of ADM. The transaction included the sales and delivery of lactic acid, sodium lactate, and potassium lactate products. No production facilities or personnel were acquired.
Q2 was another strong quarter for the Food segment with organic growth of 3.4%, slightly above the guidance range (2015-2018 CAGR) of 1-3%. This performance was mainly driven by the Bakery and Meat results.
In the US, bakery activities benefited from the general consumer recovery in addition to good results with innovative products in bread and sweet products. This was despite a temporary production disruption created by the Grandview incident. Meat net sales grew across all regions. In the US, the Meat business grew for the third quarter in a row. Although the company is experiencing lower than anticipated switching activity by customers to low-cost-in-use alternatives, many customers continue to seek cost advantages for their preservative solutions, and the company stays focused on protecting Corbion’s positions in this market. There was good growth in premium label-friendly products in the US. Growth in Meat in the rest of the world was driven by progress in Latin America and Asia. In Beverages, Confectionery, and Dairy, it struggled to grow mainly as a result of difficult market conditions and the adverse impact of the Grandview incident.
