Vion Food Takes a New Direction Following 2014 Repositioning
19 Jun 2015 --- Dutch company Vion Food has reported higher gross operating result in 2014 for ongoing activities which it attributes to the steps it took in 2014 ‘towards a healthy future’. Normalised gross operating result (EBITDA) from ongoing operations increased from €22 million to € 58 million.
Tom Heidman, interim CEO Vion Food: “This has been a year of intensive activity for the business. After the sale of Vion Ingredients, 2014 was all about re-positioning and integrating our activities, our ambition being to improve our profitability. Thanks to the improved results, the operational changes which were implemented, adjustments to the footprint and a robust financial position, we have a sound foundation for the future. In combination with our access to worldwide markets, this gives us the opportunity to deploy our expertise effectively in order to further improve value creation from our livestock. We expect to appoint a new CEO by the end of summer, who will give further shape to the future of Vion.”
In order to further improve the focus, in 2014 the country structure was transformed into a business unit structure with three business units: Pork, Beef and Foodservice. In addition, some business interests were sold, including Oerlemans Foods (May 2014) and the German convenience retail activities (July 2014), and the headquarters were slimmed down and moved from Eindhoven to Boxtel.
Steps were also taken in the optimisation of the network of production locations (the operational footprint). This included the closure of a number of small sites and the sale of some (smaller) locations, such as the recently announced closure of production locations in Anklam and Frankfurt am Main (both in Germany) on the one hand, and on the other hand the commitment to investments. For example, in August 2014 a significant investment of €25m was announced in production locations in Southern Germany, and in the Groenlo (the Netherlands) operation there is a €4 million investment in production, storage, logistics and staff facilities.
For 2014 Vion has realised a net result of € 21 million negative compared with a result of € 516 million in 2013. However, the net results for 2013 contains a non-recurring positive effect of € 781 million from the sale of group companies.
The company says that with the improved results in 2014, the operational improvements, improved footprint and the robust financial position, a healthy start has been made to deliver continued improvement of the results. The current course and focus on optimising margins by means of valorisation and cost efficiencies make us confident about the future. The work capital financing agreed in April 2015 gives the financial flexibility to implement the plans for the future.
