French dairy co-operative Sodiaal aims to double its earnings by 2020 as it looks to take advantage of opportunities in the "new world" following the end of EU dairy quotas.
The company unveiled a six-year EUR600m (US$678m) investment programme at its general assembly yesterday (19 June). Sodiaal plans to increase its focus on value-added products such as cheese, yoghurt and infant formula while improving the margin structure at its ingredients unit.
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CEO Frederic Rostand said the company's "diversification strategy" to grow internationally and expand its product offering is paying off. He insisted Sodiaal has achieved "significant commercial success" in its export business. "That is why we set ourselves the realistic objective to double our EBITDA and the share of our turnover from exports by 2020," he said.
In 2014, the Russian embargo weighed on the group's earnings performance, with a detrimental impact in particular on its nutrition and dairy ingredients interests. As a result, and due to the volatility in prices of dairy commodities, Sodiaal recorded EBITDA of EUR93m, down from EUR106m.
The company nevertheless was upbeat on its ability to double EBITDA in the next five years. Sodiaal said earnings would be lifted by adjustments to its sales mix as well as improvements to its cost base.
In 2014, Sodiaal's sales totalled EUR5.4bn, with 25% generated overseas and 10% generated by the French group's export business, which suppliers markets in Asia, the Middle East, Africa and North America.
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By GlobalDataSodiaal president Damien Lacombe added the company also intends to look at opportunities to expand globally and will "take [its] place internationally" as a leader in the global dairy sector.
