Corbion sales slide on Bakery performance, positive on Meat and Biochemicals

Organic net sales growth in Q4 was 0.4 percent. EBITDA excluding one-off items in 2017 decreased by 3.5 percent to €164.1 million (US$203 million). The company proposes to distribute a regular dividend of €0.56 (US$0.69) per share.

"I am pleased to see the positive sales momentum continuing in Ingredient Solutions in the second half of 2017. Our performance in 2017 was satisfactory except for the volume developments in Bakery. Growth in Meat and Biochemicals was encouraging,” said Tjerk de Ruiter, CEO.

“We accelerated our efforts in Innovation Platforms with the establishment of the Total Corbion PLA joint venture and the acquisition of an algae ingredients platform [TerraVia]. In November we presented our ‘Creating Sustainable Growth’ strategy for the 2018-2021 period.”

Key financial highlights for the full-year 2017 include net sales organic growth was -0.4 percent; volume growth was -1.9 percent, EBITDA excluding one-off items was €164.1 million (US$203 million).

Free cash flow was €24.2 million (US$30 million) compared to €72.1 million (US$89.5 million) in 2016. The decline is mostly due to the newly founded Total Corbion PLA joint venture and the acquired TerraVia assets.

Earlier this month, Corbion confirmed it is in discussions with Bunge Limited about the potential acquisition of Bunge’s stake in the SB Renewable Oils joint venture.

Net sales
According to the company, net sales in 2017 decreased by 2.2 percent mostly due to a volume decrease (-1.9 percent), partly compensated by a positive price/mix effect (1.5 percent), and a negative currency impact (-1.3 percent). Furthermore, there was a small negative impact related to the divestment of the Breddo-Likwifier activities, effective as of December 9, 2016.

Organic sales growth of -0.2 percent in the Ingredient Solutions business unit was mostly driven by a weak volume performance in Bakery, which was partly offset by growth in Meat and Biochemicals. Organic sales growth for the Biochemicals business segment was 5.8 percent, due to organic growth in all markets except for Animal Health.

The increase in Innovation Platforms volumes mostly reflects higher lactic acid volumes sold to the Total Corbion PLA joint venture. The negative price/mix is largely the result of the inception of the Total Corbion PLA joint venture, effective March 2, 2017.

From that date, lactic acid sales rather than lactide/PLA sales are reported under Innovation Platforms. The acquisition effect in Innovation Platforms is due to the acquisition of the TerraVia assets on 29 September 2017.

EBITDA
EBITDA FY 2017 excluding one-off items decreased by 3.5 percent to €164.1 million (US$203 million), mostly due to negative volume growth and the acquisition of the TerraVia assets.

EBITDA margin before one-off items was 18.4 percent (2016: 18.7 percent). Currencies positively impacted EBITDA by €0.9 million (US$1.1 million). Ingredient Solutions EBITDA excluding one-off items decreased by 2.0 percent driven by lower volumes and higher raw material costs offset by positive price/mix effects.

Depreciation, amortization, and impairment of fixed assets excluding one-off items amounted to €45.2 million (US$56 million) compared to €49.8 million (US$61.7 million) in 2016.

Operating result decreased by 3.6 percent to €122.3 million (US$151.7 million) in 2017 (2016: €126.9 million).

Dividend proposal
A proposal to distribute a regular dividend in cash of €0.56 (US$0.70) per ordinary share (2016: € 0.56) will be submitted for approval to the Annual General Meeting of Shareholders, to be held on May 25, 2018.

This represents 41 percent of Corbion’s net profit excluding one-off items. The dividend will be charged to the Corbion reserves.

 

An interview with Ruud Peerbooms, Senior Vice President (Food) at Corbion was featured in the February 2018 issue of The World of Food Ingredients. You can read the interview here.