November 18, 2013

Campofrio's Jan-Sep net sales reach US$1.9 billion

In the first nine months of 2013, Campofrío Food Group (CFG), Europe's processed meats sector leader, registered net sales of €1,390.9 million, (US$1.9 billion) holding sales flat 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 US. 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 earnings before interests, taxes, depreciation and amortisation (EBITDA) reached €100.0 million (US$135 million), reflecting a drop of 3.7% on-year, mostly due to the exceptional impact of the cost of raw materials in third quarter. 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 (US$2.4 million), a reduction of €2.9 million (US$3.9 million) in line with the decrease in EBITDA for the period.

CFG strengthened its robust financial position in the first nine months of the year. Cash flow generation remained strong, and the company ended the period with a positive cash position of €139 million (US$188 million). Including fully available credit lines of €240 million (US$324 million), CFG's overall liquidity position at the end of the first nine months of the year stood at €360 million (US$486 million), which allows the company to continue its investment programme aimed at increasing competitiveness and profitability.

At September 30, net financial debt stood at €473 million (US$638 million), which represents a debt ratio (net financial debt to last twelve months' normalised EBITDA) of 3.2 times. This figure reflects a €17 million (US$23 million) reduction of the financial debt at June 30, 2013.

Robert A. Sharpe II, Chief Executive Officer of Campofrío Food Group, said: "In an on-going challenging socio-economic situation, CFG has been able to maintain the leadership position of its distinctive brands. Our business model, based on product innovation and actively listening to consumers, has allowed us to advance steadily in an increasingly competitive market where high meat prices and intense competition from private label coincide with weak consumer demand."