Madrid, 27 February 2023. Against an extremely difficult backdrop, the Ebro Group has once again demonstrated the strengths of our business model, bringing a highly satisfactory end to a complicated 2022.
The Group notched up a 22.3% year-on-year growth in net turnover to €2,967.6 million through efficient management of our supply chain and with a strong portfolio of leading brands, which enjoy consumer loyalty and recognition.
Adjusted EBITDA was up 10.9% from 2021 levels at €334.6 million after increasing our investment in advertising by more than two percentage points, demonstrating our firm commitment to the development of our brands.
Net Profit on a like-for-like basis (i.e. stripping out the contribution of divestments in the dry pasta business**) was down 6.6% at €135.6 million owing to exchange differences and the loss generated on the divestment from Roland Monterrat. Stripping out these two one-off, extraordinary items, our net profit was up 13.6% year on year. Net debt stood at €762.6 million at the end of the year, €207.3 million more than at year-end 2021.
In a scenario marked by soaring cost inflation in all our operating areas (logistics, raw materials, energy, etc.), the Rice Division chalked up record earnings in 2022, thanks to:
i) Our outstanding ability to manage our supply chain, the increase in working capital and an effective strategic positioning in the major procurement regions;
ii) The experience of our sales teams;
iii) The strength of our brands, with a product portfolio that responds to the different needs of consumers;
iv) And our firm commitment to differentiation and value added, especially in aromatic, instant, premium and microwave rice varieties.
The division turnover in 2022 totalled €2,329.4 million and its Adjusted EBITDA was €289.8 million.
High cost inflation was also the salient feature in this Division during 2022.
The fresh pasta business had to deal with two major challenges. On the one hand, rocketing raw material prices, which are not easy to mitigate because the short shelf life of the ingredients makes long-term procurement policies unfeasible. And on the other, a decline in fresh pasta consumption on account of its being in the highest price categories.
On the plus side, “Gnocchi”, Lustucru’s flagship, secured strong growth in the new markets opened up recently and Garofalo achieved an excellent performance, consolidating its leadership of the premium segment in Italy while maintaining two-digit growth in Spain, France and USA.
The division turnover in 2022 totalled €651.5 million and its Adjusted EBITDA was €58.4 million.
A year with intense activity and a very difficult cost scenario
2022 was an exceedingly complicated year, in which the Group demonstrated its excellent management capacity, steering expertly through the numerous complexities of a climate of high inflation aggravated by the collateral effects of the war in Ukraine.
Within this inflation climate, costs increased year on year by €234 million, which we were unable to pass on entirely in the prices of our products. The issue was circumvented largely as a result of our diligence in decision-making, the implementation of cost-saving measures, the efficiency of our production plants, the expertise of our Commercial, Marketing and Supply Chain teams, the differentiation and value attributes of our brands, our strategic positioning in the principal sourcing regions and, in short, all the pillars defining the consistency of our business model in adverse circumstances.
The assessment of 2022 is very positive for the Group, which, even in this complex scenario, has proved capable of improving its earnings, reaching levels close to those it had prior to the divestment of Panzani in 2021, and forges ahead with the development of its business strategy: (i) shedding businesses that are not strategic for Ebro, such as Roland Monterrat, (ii) investing €118.8 million in organic growth and (iii) underpinning its business position in USA with the acquisition of InHarvest, which is well positioned in the premium market. As 2023 kicks off, we anticipate that it will be just as difficult as last year owing to the evolution of inflation, the need to continue negotiating prices to pass on the increased costs, the droughts in southern Europe and the high prices of Basmati, among other aspects, but we are convinced that the Group is in a good position to take on these challenges successfully.
NB ** Those businesses contributed €105 million to the prior year’s earnings