Bonduelle - 2018-2019 Annual Results: Stability of the revenue and
current operating profitability
BONDUELLE
A French SCA (Partnership Limited by Shares) with
a capital of 56 942 095 EurosHead Office: La Woestyne 59173
Renescure, FranceRegistered under number: 447 250 044
(Dunkerque Commercial and Companies Register)
2018-2019 Annual
Results(July 1, 2018 - June 30, 2019)
Stability of the revenue and current
profitability for the Bonduelle Group in
2018-2019
- Revenue and current operating profitability stable at an
all-time high
- A monitored debt leverage despite 3 acquisitions over the
financial year and sound financial structure
- A 2019-2020 financial year affected by limited growth,
unfavorable climate and the impact of inflationary costs
On September 27, 2019, the Supervisory Board,
under the chairmanship of Martin Ducroquet, reviewed the statutory
and consolidated financial statements for FY 2018 - 2019 as
approved by the General Management and certified by the company's
statutory Auditors.
Significant Results
Consolidated Accounts(in €
millions) |
2018-2019 |
2017-2018 |
Variations |
Revenues |
2,777.1 |
2,776.6 |
+0.0% |
Current Operating Income |
123.7 |
123.6 |
+0.0% |
Net Result |
72.6 |
72.3 |
+0.3% |
The Bonduelle Group's revenue for FY 2018-2019
stands at € 2,777.1 million, unchanged from the previous year, in a
fragile consumption climate affecting several areas.Current
operating income also remains virtually stable at € 123.7 million
despite a difficult 2018 crop year.The acquisition of the Del Monte
brand, contributing to the revenue and profitability of this FY,
coupled with the acquisition of packing and processing tools for
the frozen segment in the US and in Russia confirm the ability of
the group to selectively seize the opportunities offered in a very
challenging economic environment.In a context of ever volatile and
sluggish consumption observed in several regions and adverse
weather conditions, the Bonduelle Group is nevertheless once again
demonstrating its resilience and the agility of its teams.
Revenue
The group's revenue at the end of the financial
year (July 1, 2018 - June 30, 2019) stands at € 2,777.1 million,
unchanged from the reported figures of the previous year. This
result encompasses the contribution of the Del Monte business
activities acquired at the beginning of the FY (+1.2%) and the net
impact of exchange rates (+0.3%). The negative growth on a like for
like basis(¹) (-1.5%) is fully explained by the development of the
activities in the fresh operating segment in the US, the other
operating segments of the group posted a +2.8% growth at constant
scope of consolidation and exchange rates.
Activity by Geographic
Region
Total Consolidated Revenue(in €
millions) |
2018-2019 |
2017-2018 |
VariationsReported figures |
VariationsLike for like
basis(1) |
Europe Zone |
1,297.- |
1,290.3 |
+0.5% |
+0.7% |
Non-Europe Zone |
1,480.1 |
1,486.3 |
-0.4% |
-3.4% |
Total |
2,777.1 |
2,776.6 |
+0.0% |
-1.5% |
Activity by Operating
Segment
Total Consolidated Revenue(in €
millions) |
2018-2019 |
2017-2018 |
VariationsReported figures |
VariationsLike for like
basis(1) |
Canned |
1,023.4 |
988.- |
+3.6% |
+1.9% |
Frozen |
657.9 |
622.- |
+5.8% |
+6.-% |
Fresh Processed |
1,095.8 |
1,166.6 |
-6.1% |
-8.4% |
Total |
2,777.1 |
2,776.6 |
+0.0% |
-1.5% |
Europe ZoneThe revenue of the
Europe Zone, representing 47 % of the revenue of the group,
reported an annual growth of +0.5% on reported figures and +0.7% on
a like for like basis(1).The retail sales for the Bonduelle and
Cassegrain brands continued their growth in terms of volume and
revenues for the various operating segments - canned, frozen, fresh
ready-to-use and fresh ready-to-eat. Hence, the group is
strengthening its market shares thanks to the various innovations -
launches and pan-European deployments - in the plant-based food
sector, by combining vegetables, cereals and pulses available in
various forms and targeting the different consumption moments.
Non-Europe ZoneThe revenue of
the Non-Europe Zone, representing 53 % of the revenue of the group,
was down -0.4% on reported figures and -3.4% on a like for like
basis(1) for FY 2018-2019. This evolution is explained by the
sourcing diversification of a major client in the fresh business
activity in North America recorded from Q2 of this FY, and by the
product portfolio rationalization (cessation of fruit cutting and
decrease of bagged salads). The canned and frozen activities of
this zone, on the other hand, recorded solid growth, fuelled by
internal growth and the acquisition of the Del Monte brand in
Canada, which is performing in line with expectations. Additional
packing capacities have been added to the frozen operating segment
via the acquisition of the Lebanon site (Pennsylvania - USA).The
Eurasian Zone (Russia and other CIS countries) recorded a very
dynamic business activity over this FY, thanks to the introduction
of successful innovations - young corn range, range of prepared
vegetables in jars (investments in a jar glass line), canned olives
- momentum which is going to be strengthened, as early as next FY,
by the frozen activity locally produced, thanks to the acquisition
of the Belgorod plant (Russia).
Operating Profitability
(in € million) |
2018-2019Reported figures |
2017-2018Reported figures |
VariationsReported figures |
VariationsLike for like
basis(1) |
Revenue |
2,777.1 |
2,776.6 |
+0.0% |
-1.5% |
Current Operating Profitability |
123.7 |
123.6 |
+0.0% |
-1.6% |
Current Operating Margin Rate |
4.5% |
4.5% |
+ 0 bp |
- 10 bps |
For FY 2018-2019, the Bonduelle Group’s current
operating income stands at € 123.7 million compared with € 123.6
million the previous year, remaining stable in terms of reported
figures and thus maintaining its current operating margin at
4.5%.In Europe, the current operating profit margin limited its
decline despite the impact of an unfavorable crop year and allowed
posting a full year operating margin at 4.2% vs. 4.4% the previous
year. In a sluggish consumer climate, the group continued its
marketing investments and its policy of accretive innovations.In
the non-Europe zone, the strong performance of the long-life
business segment in North America (canned and frozen) and in the
Eurasia region (Russia and other CIS countries), the good
resilience of Bonduelle Fresh Americas' profitability, coupled with
the accretive acquisition of Del Monte resulted a 20 bps increase
in the current operating margin at 4.7%, despite the impact of bad
crops observed in Russia and Canada.
Non-recurring items amount to - € 7.9 million
for the FY. In addition to the costs associated with the cessation
of non-contributory activities in Bonduelle Fresh Americas, they
include the operating costs and losses net of related deductible
relating to a health alert that affected the group in the United
States and Canada, an expense of € 4.5 million. Although not
related to products marketed by Bonduelle, this alert from the
American and Canadian authorities resulted in revenue losses and
additional costs partly compensated by the group's insurance
company through its contamination policy.
After taking into account these non-recurring
items, the Bonduelle Group's operating income amounts to € 115.8
million, compared with € 119.- million in the previous year, stable
after adjusting for the impact of the health crisis mentioned
above.
Net Result
The net financial expense stands at € 22.6
million, compared with € 25.3 million last fiscal year, a decrease
of € 2.7 million in financial expenses linked to a balanced foreign
exchange result and a competitive refinancing via a € 140 million
USPP implemented in the course of the FY.Income tax expense remains
stable at € 20.6 million, corresponding to an effective tax rate of
22.1% (compared with 22.8% in the previous year).After taking into
account the tax charge and financial result, the Bonduelle Group's
net income for FY 2018-2019 amounts to € 72.6 million, compared
with € 72.3 million in the previous year.
Financial Situation
|
June 30, 2014 |
June 30, 2015 |
June 30, 2016 |
June 30, 2017 |
June 30, 2018 |
June 30, 2019 |
Net debt (in millions of euro) |
524.6 |
512.4 |
440.6 |
661.6 |
617.4 |
654.7 |
Gearing(2) |
1.04 |
0.98 |
0.78 |
1.09 |
0.95 |
0.90 |
Leverage ratio(3) |
2.95x |
2.73x |
2.47x |
3,53x |
2,91x |
3,07x |
Despite the various acquisitions of activities
or assets realized over the financial year (Del Monte, Lebanon,
Belgorod), the Bonduelle Group has a net debt of € 654.7 million,
with a leverage of 3.07x (against 2.91x the previous year) and a
gearing(2) down to 0.90 from 0.95 the previous year. The raising of
a € 140 million USPP in May 2019 secured access to the group's
liquidity, with a significant extension of the maturity of its debt
(4.4 years) and an improvement in its average financing rate to
2.41% from 2.65% last FY.
Significant events of the financial year and subsequent
events
Communication related to the September
27, 2019 European Commission decisionOn September 27,
2019, the European Commission adopted its decision on sanctions
against various players of certain market segments of canned
vegetables in Europe.As part of the Commission's investigations
into this 2000s market practices, and as mentioned in its
registration documents since the 2013-2014 fiscal year, the
Bonduelle Group applied to the Commission for immunity from fines
and obtained, on 2013 September 24th, conditional immunity under
this procedure. The decision of the Commission confirms financial
penalties exemption for the group.As a reminder, in 2013, Bonduelle
adopted, in all its business segments, an antitrust training
program onboarding its employees, completed by a whistleblowing
system. These principles, assembled in a Charter of Ethics, are a
day-to-day guide for all the teams and a benchmark for the Ethics
Committee. This Charter underlines all the factors that make
Bonduelle a responsible company, a company with integrity.
Change in the shareholding structure for
the Soléal company (France)Bonduelle, a 48 % shareholder
of the Soléal company, acquired in July 2019 most of the interests
of the Euralis, Maïsadour and Vivadour cooperatives held in the
company.Created in 2005 in the form of a joint venture, the Soléal
company includes 2 sweet corn and vegetable processing plants
located in the South-West of France (Labenne and Bordères). Changes
in the ownership of Soléal include some sourcing commitments, will
strengthen the long term partnership with growers, and increase the
competitiveness of the Bonduelle Group.
Acquisition of a frozen plant in
RussiaOn June 3rd 2019, the Bonduelle Group announced the
acquisition of the industrial assets of the LLC SHOCK frozen
vegetable production company, based in the area of Belgorod
(Russia).Located in a reputed agricultural region - temperate
climate, particularly fertile soils (black central soils) - this
industrial site will accelerate the development of the Bonduelle
frozen activity in the above mentioned markets through a high
quality production.This production tool, whose initial acquisition
cost (circa 7 million of euros) and additional investments remain
limited, will ensure an annual production from 6,000 to 10,000
tonnes of frozen vegetables. Circa 50 permanent employees will work
at the site and Bonduelle will partner with the local agricultural
community, developing its know-how in environmentally friendly
agricultural practices.
The Bonduelle Group has successfully
issued a private bond placement in the United States
(USPP)Looking for maturity of its debt instruments and the
refinancing of the EuroPP, maturing on March 11, 2019, the
Bonduelle Group issued on May 2, 2019 a private placement in the
United States for a total amount of 140 million of euros with a 10
year maturity, consequently taking the average maturity of the
group's overall debt to over 4 years.Operating on the USPP market
since 2000, the Bonduelle Group has successfully issued this
private placement with attractive terms among a pool of existing
investors who confirmed their confidence in the group. Largely
oversubscribed, this transaction enables the group to significantly
reduce the cost of its debt.The Bonduelle Group has been advised by
Natixis, acting as agent and by Willkie Farr & Gallagher acting
as legal advisor.
Bonduelle continues its development in
frozen food in the United States with the acquisition of the
Lebanon plantOn February 12, 2019, the Bonduelle Group
announced that it had reached a definitive agreement with the
American company Seneca (NASDAQ: SENEA, SENEB) to acquire its plant
in Lebanon (Pennsylvania, USA).This plant, which is used for the
packaging of frozen products, was built in 2008 and acquired by
Seneca in 2010, has a capacity of 45,000 tons on seven packaging
lines in perfect working order, with a large storage capacity, and
has 140 permanent employees.The Bonduelle Americas Long Life
business unit (BALL), which until recently was limited in its
development capacity, is thus completing its frozen industrial
facility in North America, with 4 industrial facilities in the
Eastern United States and 6 in Canada. In addition to the
additional packaging capacity generating revenue, this acquisition
will allow both industrial and logistical synergies with existing
facilities and will offer enhanced quality of service for the
benefit of BALL business unit customers.This acquisition, including
industrial assets, stocks of frozen products and the personnel of
the Lebanon industrial site, effective February 11, 2019, will,
given the seasonality of the activity, be accretive from the
2019-2020 financial year.
Co-optation of a member of the
Supervisory BoardAt the Supervisory Board meeting of
February 28, 2019, Marie-France TISSEAU decided, for personal
reasons, to resign as a member of the Board. During the same
meeting, the Board appointed Jean-Michel THIERRY, Chartered
Accountant and Statutory Auditor, as member of the Board and member
of the Audit Committee.Approval of this co-optation will be
submitted for ratification to the Annual General Meeting on
December 5, 2019 at the latest.
Outlooks
Given the macroeconomic and geopolitical
uncertainties, a lack of price increases or even decreases in
France, below the inflation rates experienced, a very hot summer
that is unfavorable to crops, but also a carryover on 2019-2020 of
the loss of customers in 2018-2019, the group expects moderate
revenue growth of 1.5 to 2.5% and a current operating profitability
within the range of 115 to 118 million of euro(4), both at constant
currency exchange rate and scope of consolidation.
The General Management will propose at the
Annual General Meeting on December 5, 2019 a dividend of € 0.50 per
share, unchanged from last year.
(1) at constant currency exchange rate and scope
of consolidation basis. The revenue in foreign currency over the
given period are translated into the rate of exchange for the
comparable period. The impact of business acquisitions (or gain of
control) and divestments is restated as follows:
- For businesses acquired (or gain of control) during the current
period, revenue generated since the acquisition date is excluded
from the organic growth calculation;
- For businesses acquired (or gain of control) during the prior
fiscal year, revenue generated during the current period up until
the first anniversary date of the acquisition is excluded;
- For businesses divested (or loss of control) during the prior
fiscal year, revenue generated in the comparative period of the
prior fiscal year until the divestment date is excluded;
- For businesses divested (or loss of control) during the current
fiscal year, revenue generated in the period commencing 12 months
before the divestment date up to the end of the comparative period
of the prior fiscal year is excluded.
(2) net financial debt / equity(3) net financial
debt / recurring EBITDA(4) including the positive impact of the
application of IFRS 16 (+ € 1.3 million)
Alternative performance indicators: the group
presents in its financial notices performance indicators not
defined by accounting standards. The main performance indicators
are detailed in the financial reports available on
www.bonduelle.com.
Next financial events:
- 2019-2020 1st Quarter Revenue:
November 4, 2019 (after stock exchange trading session)- Annual
General
Meeting:
December 5, 2019- 2019-2020 1st Half Year
Revenue:
February 3, 2020 (after stock exchange trading session)- 2019-2020
1st Half Year
Results:
March 6, 2020 (prior to stock exchange trading session)
Find the complete annual results and the
financial notices calendar on
www.bonduelle.com
About
Bonduelle
Bonduelle, a family
business, was established in 1853. Its mission is to be the world
reference in "well-living" through plant-based food. Prioritizing
innovation and long-term vision, the group is diversifying its
operations and geographical presence. Its vegetables, grown over
almost 120,000 hectares all over the world, are sold in 100
countries under various brand names and through various
distribution channels and technologies. An expert in agro-industry
with 56 industrial sites or owned agricultural production sites,
Bonduelle produces quality products by selecting the best crop
areas close to its customers.Bonduelle is listed on Euronext
compartment AEuronext indices: CAC MID & SMALL - CAC FOOD
PRODUCERS - CAC ALL SHARESBonduelle is part of the Gaïa
non-financial performance index and employee shareholder index
(I.A.S.)Code ISIN : FR0000063935 - Code Reuters : BOND.PA - Code
Bloomberg : BON FP
Find out about the
group’s current events and news on Twitter @Bonduelle_Group, and
its financial news on @BonduelleCFO
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