In an unprecedented move, Lactalis has disclosed details of its recent financial performance and revealed the French dairy giant aims to boost sales by around 8% in two years, with the majority expected to be generated from assets outside of its home market.
Group president Emmanuel Besnier addressed journalists this week and revealed the full extent of the tainted baby milk scandal on its earnings during the back half of 2017 and beyond, with net profits falling that year by almost 5% to EUR387m (US$438.5m) based on sales of EUR18.4bn.
After completing a spate of acquisitions of late, predominately in emerging markets, Lactalis is targeting EUR20bn in sales by the end of 2020, compared to EUR18.5bn last year, with around two thirds of that expected to come from overseas markets.
As recently as January, the firm completed two corporate purchases in India and Egypt – publicly-listed Prabhat Dairy and Greenland Group for Food Industries – building on a number of acquisitions last year, excluding an increased stake in Italian peer Parmalat.
Meanwhile, while sales have risen in each of the past three years, debt levels have climbed too, although not significantly, to stand at EUR4bn in 2017, compared to EUR3.8bn back in 2015. And Lactalis also revealed it invested EUR12m in its manufacturing plant at Craon in north-western France, the source of the salmonella outbreak that led to the recall of millions of tins of baby milk from around the world.
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Still, net profits were down in 2016 too at EUR406m based on sales of EUR17.3bn. Profits reached EUR432m the previous year on sales of EUR16.7bn.
just-food analysis: Why Lactalis’ M&A spree continued in India and Egypt
