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March 22, 2012

CAGE: Ebro outlines geographic, M&A expansion plans

Spanish food group Ebro Foods has said it will continue to invest in new concepts and products, making acquisitions and expanding its geographical reach.

Spanish food group Ebro Foods has said it will continue to invest in new concepts and products, making acquisitions and expanding its geographical reach.

Speaking at the Consumer Analyst Group of Europe conference in London yesterday (21 March), Ebro Foods’ chairman and CEO Antonio Hernandez Callejas explained to analysts the company had become more international over the last decade and that would continue.

“We have changed a lot in the last ten years, from a very European and Spanish firm in 2000, to now having a very different geographical split. North America accounts for 50% of our business and Spain only 10% as of last year,” Callejas said. “Europe is 38% and other regions like Asia and north Africa are going to become important parts of our geography.”

While North America accounts for the lion’s share of Ebro’s business, Callejas said the company sees an opportunity for growth in the region, through further expansion in private label and the launch of its frozen and ready meals.

“Private label is growing and we need to be ahead of our competitors. In the US we have been able to consolidate our position. When we think we are mostly present in rice and pasta, our biggest potential for growth is doing what we are currently doing, which means entering into other categories. For us, in the US it is frozen dinners, which is as big in value as rice is,” Callejas said.

He admitted: “We are innovating into a category which is dominated by large companies. But innovation, together with convenience and health, is the area where we want to gain a hold.”

In Europe, Callejas said Ebro’s focus will be different, given the continent’s commitment to fresh foods. This, he said, may include acquisitions, which he claimed the company is in a strong position to undertake.

“We still have the potential to increase the size of our company with acquisitions because we only have 1.3 x EBITDA debt, so that puts us in an ample position for targets,” he said. “We don’t see at this point an ample target but smaller ones which will help us understand the story of Ebro and convert the company into a first-class global company.

“For us, every year is a tremendous new experience where we are making our company a real good international food company, growing value for our shareholders.”

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