AMSTERDAM, THE NETHERLANDS — Corbion nv, while giving fiscal-year 2017 results, reported progress in its recently acquired algae ingredients business. The Amsterdam-based company also continues to work on improving its bakery volume.
The TerraVia brand name of the algae ingredients business will change to Corbion Algae Ingredients, Corbion said when giving financial results March 7. A plant in Peoria, Ill., related to the business re-opened in February.
“This will allow us to scale up promising products such as Thrive (high-oleic cooking oil) and AlgaVia proteins and lipids but will also significantly add to the fixed costs of Innovation Platforms,” Corbion said. “A one-off gain of €4 million ($5 million) was related to the acquisition of the TerraVia assets.”
Corbion last September completed the acquisition of substantially all the assets of TerraVia Holdings, which included a platform centered on food and specialty ingredients derived from microalgae. Corbion Algae Ingredients is now part of the company’s Innovations Platform.
Companywide in the fiscal year, Corbion’s net sales of €891.7 million ($1,105 million) were down 2.2% from €911.3 million. The decrease reflected organic sales down 0.4%, price/mix up 1.5% and volume down 1.9%. EBITDA excluding one-off items decreased by 3.5% to €164.1 million ($203.4 million) from $170.1 million, mostly due to negative volume growth and the acquisition of the TerraVia assets.
Within Corbion’s Ingredient Solutions, net sales of €870.2 million were down 2.2% from €889.6 million. A weak volume performance in bakery was partly offset by growth in meat and biochemical. EBITDA excluding one-off items in Ingredients Solutions decreased by 2% to €172.9 million from €176.5 million, driven by lower volumes and higher raw materials offset by positive price/mix effects.
Within Ingredients Solutions, net sales in the food business decreased by 4.3% to €647.7 million from €676.6 million, and EBITDA excluding one-off items in the food business decreased 5% to €121.3 million from €127.8 million.
“In 2017 we saw bakery sales decline as we experienced challenges in executing our bakery channel strategy and losses in frozen dough,” Corbion said. “We accelerated the overhaul of the commercial organization in bakery, and we have taken measures to improve customer service levels.
“Consequently, volume losses in bakery were less pronounced in (the second half) than in (the first half). Furthermore, several growth initiatives are gaining traction, such as PGME emulsifiers for the sweet goods market and Ultra Fresh extended freshness solutions.”
Corbion added meat performed strongly in the food business as the portfolio mix toward natural preservation systems in the United States continued to support top-line growth and margin improvements.
Corbion, in financial guidance for 2018-21, expects net sales growth of 1% to 3% in its food business.
“Food is expected to return to the guidance range (in 2018) as some of last year’s bakery customer losses should start to fade as the year progresses,” Corbion said.
Also within Ingredients Solutions, net sales in the biochemicals business improved 4.5% to €222.5 million from €213 million.
Innovations Platform had fiscal-year net sales of €21.5 million, down 0.9% from €21.7 million. Losses before interest, taxes, depreciation and amortization, excluding one-off items, were €8.8 million in the fiscal year, which compared to a loss of €6.4 million in the previous fiscal year.
“I am pleased to see the positive sales momentum continuing in Ingredients Solutions in the second half of 2017,” said Tjerk de Ruiter, chief executive officer of Corbion. “Our performance in 2017 was satisfactory except for the volume developments in bakery. Growth in meat and biochemicals was encouraging.”
