AMSTERDAM, THE NETHERLANDS – Challenges in bakery affected Corbion nv negatively in the first quarter of the fiscal year. While overcall company sales increased 0.7%, organic sales dropped 2.3%, mostly due to a volume decrease in the Food segment, which includes bakery, offset partly by an increase in Biochemical.
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| Tjerk de Ruiter, c.e.o. of Corbion |
“The start of the year has been encouraging in all segments, except for bakery, which fell short of our expectations,” said Tjerk de Ruiter, chief executive officer of Amsterdam-based Corbion, when results were given April 25. “Profitability exceeded expectations as mix improvements continued to push underlying margins higher.”
Net sales decreased by 0.4% in the Food business segment, which included a 3.5% decline organically.
“A decrease in sales was expected in the first quarter as we lost some volumes in more commoditized parts of the U.S. meat market and optimized the customer and s.k.u. (stock-keeping unit) portfolio in bakery in Q2 2016,” Corbion said. “However, the sales reduction was more pronounced than anticipated due to losses at frozen dough and challenges in executing our bakery channel strategy. Consequently, we are accelerating the overhaul of the commercial organization in bakery, and we are taking measures to improve customer service.”
Companywide, Corbion reported first-quarter sales of €229.9 million ($251.5 million), which compared with €228.3 million in the previous year’s first quarter. EBITDA excluding one-off items was €47.8 million ($52.3 million), up 9% from €43.7 million in the previous year’s first quarter.
Within Corbion’s Biobased Ingredients, which includes the Food segment, net sales of €226 million were up 1.6% from €222.4 million in the previous year’s first quarter. EBITDA excluding one-off items for Biobased Ingredients was €49.4 million, up 13% from €43.6 million. The Food segment had net sales of €167.4 million, down from €168.1 million, and EBITDA excluding one-off items of €37.2 million, up 9% from €34.1 million. The Biochemicals segment, also within Biobased Ingredients, had net sales of €58.6 million, up 8% from €54.3 million, and EBITDA excluding one-off items of €16.9 million, up 18% from €14.3 million.
“For Biobased Ingredients, we expect quarterly sales growth to improve as we move further into 2017,” Corbion said. “However, as the losses in bakery will dampen growth, we now expect 2017 net sales growth in Biobased Ingredients to end up below the multi-year guidance bandwidth of 2% to 4%. Nevertheless, given the positive portfolio mix developments in the first months of the year, we continue to expect our total Corbion EBITDA excluding one-off items for 2017 to be slightly below that of 2016 (€170.1 million).”
Within Corbion’s Biobased Innovations in the first quarter, net sales of €3.9 million were down 34% from €5.9 million, and losses before income, taxes, depreciation and amortization were €1.6 million, which compared with EBITDA of €100,000 in the first quarter of the previous year. Since a joint venture with French oil company Total to produce and market polylactic (PLA) polymers became operational on March 2, lactide and PLA sales no longer were recorded in Biobased Innovations but rather in the joint venture.
