Belgium meat-to-ready meals group Ter Beke has booked a decline in earnings for 2011, as increased raw materials costs hit margins.
In an announcement this morning (29 February), Ter Beke said that full-year EBITDA dropped 11.4% to EUR33.2m (US$44.7m), down from EUR37.5m in 2010. Net profit fell 13.1% to EUR9m.
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The company said that higher input costs had dented profitability, as the nature of contracts that the group enters into with retailers meant that it was unable to pass these expenses on.
The company said that sales remained relatively flat, increasing 0.4% to EUR40.37bn as a 3.9% increase in ready meals sales offset a 1.1% fall in processed meats sales.
The decline in its meat business was a reflection of changes to the product mix. Sales volumes of cheaper products increased throughout the year, to the detriment of higher priced items, Ter Beke said. Nevertheless, the company emphasised that it was actually able to grow market share in the UK, Belgium and Germany.
Looking to 2012, Ter Beke predicted “improved” results. The group said that it will invest in innovation, product-mix improvements and supply chain efficiency. The company added that it will look to increase prices to pass higher costs on.
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By GlobalData
