Corbion Savory Sales Impacted by Difficult North America Meat Market
25 Apr 2014 --- Corbion reported positive net sales and EBITDA growth in Q1 2014 despite significant negative exchange rate effects. Organic sales growth was 3.0% due to strong growth in the Biochemicals segment. EBITDA before one-off costs at constant currencies increased by € 3.2 million or 13.6% compared to Q1 2013. Expenditure on R&D rose significantly.
"I am pleased with our EBITDA growth versus the first quarter of last year, despite significant adverse currency effects and an increase of € 2.4 million to € 7.3 million in R&D costs in Q1 versus Q1 2013. Trading performance was mixed across our different markets: Biobased Food Ingredients volumes declined slightly, below our expectations, particularly in North America. On the other hand, Biochemicals continued its very good and broad-based performance, growing organically by 17%", commented Gerard Hoetmer, CEO.
Q1 2014 was a challenging quarter for Biobased Food Ingredients as the largest market unit, Bakery, was negatively impacted by severe adverse weather conditions in North America in the first part of the quarter. The latter part of Q1 showed a significant improvement, but this was not sufficient to achieve positive volume growth for the quarter.
Also market unit Meat & Culinary showed a slight volume decline especially in the North American market. Whilst maintaining our market position our sales volume was impacted by a difficult meat market in North America. New clean label solutions are continuing to gain ground. Market unit Foods grew its volumes satisfactorily in Q1 2014.
Net sales of Biobased Food Ingredients declined from € 137.4 million to € 133.6 million; sales were down 1.4% year-on-year on an organic basis. The EBITDA margin before one-off costs decreased from 18.2% to 17.4%. However, if we adjust for the reclassification of intercompany sales following the disposal of Bakery Supplies, the margin would only have declined by 20 bps to 18.0%. EBITDA before one-off costs declined by € 1.7 million to € 23.3 million. Adjusting for the negative currency impact, EBITDA would actually have increased, despite the higher R&D costs.
The Biochemicals segment turned in another very good set of results in Q1 2014, with organic growth across all market units. The growth rate was supported by strong sales in agrochemicals, which has an irregular delivery pattern between the different quarters. Similarly, there was another significant rise in sales volumes of lower cost/lower price acidifiers for the animal feed industry, which had a limited negative impact on overall price/mix levels for the segment. Lactides for PLA sales increased albeit from a relatively low level.
Net sales of Biochemicals improved from € 43.1 million to € 49.1 million, up by 17.0% year-on-year on an organic basis. The EBITDA margin before one-off costs increased from 10.7% to 13.2%, mostly because of higher volumes and better fixed costs coverage, despite the higher R&D expenses.
