Corbion Results Strong, On Course to Hit FY Targets

30 Oct 2015

30 Oct 2015 --- Ingredients producer Corbion has reported Q3 2015 sales of €235.6m, an increase of 18.6% compared to Q3 2014. Organic sales growth was 4.6%, mostly driven by price/mix improvements. EBITDA excluding one-off items in Q3 2015 increased by 44.2% to €39.8m.

“Q3 was yet another strong quarter for Corbion from both a sales and profit perspective. This performance was driven by continuous product mix improvements, currencies, and the successful implementation of our Streamline productivity improvement program. Organic growth was particularly strong in Food, whereas Biochemicals showed a small decline. EBITDA progress was visible in both segments," commented Tjerk de Ruiter, CEO.

In terms of outlook For 2015, in the business unit Biobased Ingredients, the company expects full year growth to be near the upper end of the guidance range of 2-4%. In Biobased Innovations it continues to expect higher R&D activity levels in Q4, causing increased costs in the quarter. As the fourth quarter is usually the slowest quarter in the year, EBITDA before one-off items in H2 slightly below that of H1 2015 (€ 77.1 million) is expected.

In Q3, the Biobased Ingredients business unit showed sales growth of 17.5% driven by price/mix improvements of 3.3% and a currency effect of 12.6%. Organic growth was in the upper half of the guidance range of 2-4% (2014-2018 CAGR).

The Food segment grew organically by 5.0%, significantly above the guidance range of 1-3%. Growth was mostly driven by a positive price/mix development of 4.3%, whereas volume growth was modest with 0.7%.

Bakery sales grew, driven by a positive price/mix effect rather than volume increases. A significant part of the price/mix effect was attributable to higher egg and folic acid prices, as well as the continuing shift of the North American bakery industry to higher value-add enzyme blends. Meat sales grew only slightly in North America but continued to expand rapidly in Latin America and Asia where our customer base keeps growing. Switching activity to low-cost-in-use alternatives was once again limited. In Beverages, Confectionery, and Dairy, sales decreased slightly due to competitive market conditions.

In Q3, the Biochemicals business segment showed an organic sales decrease of 2.1%, below the guidance range of 5-8%, mainly due to a significant drop in lower cost/lower price feed acidifiers volumes compared to last year. Chemicals was one of the weaker markets as polymer additives and oil-related products experienced lower demand. Although these adverse factors are expected to last throughout 2015, the 5-8% CAGR growth guidance range over the 2014-2018 period is expected to remain in place. Electronics and Medical Biomaterials continued to perform well. The EBITDA margin increased significantly due to our Streamline program and a higher contribution of Medical Biomaterials.