Campofrio earnings slide on flat sales

Campofrio earnings slide on flat sales

Spanish processed meats group Campofrio emphasised it has seen a progressive improvement in returns throughout the year as it booked a decline in nine-month earnings today (11 November).

Year-to-date EBITDA totalled EUR100m, down 3.7% on the comparable period of last year. Campofrio said the decline was "mostly" due to higher raw materials costs in the third quarter. However, the group added efforts to boost profitability meant EBITDA margins demonstrated a "gradual improvement in returns throughout 2013".

The company revealed net profit was down EUR2.9m in the period, falling to EUR1.8m "in line with the decrease in EBITDA".

Net sales were flat, totalling EUR1.39bn. The company said a strong performance from its brands and a focus on growth segments - health, heritage and snacking - enabled it to maintain sales levels despite weak economic conditions.

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Campofrío Food Group posts revenue of €1,391 million in the first nine months of the year 

The Health, Heritage and Snacking platforms drive revenues, with combined growth of 20%, confirming the food company’s success in terms of product innovation 

The group’s power brands maintain their share across all markets, in a complex economic environment and a highly competitive processed meat sector 

The company strengthens its cash flow position and reduces net financial debt by €17 million compared to end of June 2013 

Madrid, 11 November 2013. Campofrío Food Group (CFG), Europe´s processed meats sector leader, registered net sales of 1,390.9 million Euros in the first nine months of the year, holding sales flat year on year. The performance of the group’s power brands’ products was particularly positive, increasing branded retail sales and overcoming the negative trend affecting this product segment across Europe. 

In the last nine months, CFG's commitment to product and format innovation has continued to deliver strong results, as shown by the development of the three growth platforms through which the company is adapting to new consumer demands. Sales in the Health segment grew by 25%, with remarkable success enjoyed by the "Cuida-t+" range in Spain. The Heritage segment saw a 13% increase in sales. 

Revenues from the Snacking segment grew 18%, driven in particular by rapid growth in France, Spain and the United States. The sales performance of the “affordable product line” was also significant, recording a 24% increase in sales in Spain in the first nine months of the year. 

The market shares of CFG's power brands remained stable in the period; Aoste has a 16.8% market share in France, Marcassou has 21.8% in Belgium and the two leading brands in Spain, Campofrío and Navidul have a combined share of 18.1%. This underlines the effectiveness of CFG's brand strategy which, in a very competitive market characterised by an increase in private label products and their aggressive price strategies, is generating considerable returns, thanks to the positive combined effect of new product launches, commercial efforts and high impact marketing campaigns. 

In the first nine months of the year, CFG’s EBITDA reached 100.0 million Euros, reflecting a drop of 3.7% year on year, mostly due to the exceptional impact of the cost of raw materials in Q3. However, despite this inflationary effect, EBITDA margin as a percentage of sales in the third quarter of the year (7.8%) highlights a gradual improvement in returns throughout 2013, mostly thanks to the measures the group is taking to boost profitability. The figure reported for other operating costs fell by 3% in the first nine months of the year as a result of initiatives to increase efficiency and reduce costs. 

Net profit in the first nine months of 2013 stood at 1.8 million Euros, a reduction of 2.9 million Euros in line with the decrease in EBITDA for the period. 

Original source: Campofrio Food Group