Madrid, 27 April 2022. Our net turnover rose to €725.8 million, up 23.9% on the first quarter of 2021, thanks to the excellent performance of the high value added products and a strong, highly diversified supply chain.
Adjusted EBITDA was up 11.2% year on year to €87 million.
Net Profit dropped by 21.4% to €41.5 million from the €52.8 million posted in the first three months of 2021, as last year’s profits included the extraordinary revenue obtained on the sale of dry pasta businesses in North America. Stripping out the income from the sale of business in 2021 (Panzani, Catelli and the US dry pasta business), our Net Profit grew by 14.5%.
Our net debt stands at €555.1 million, €50 million more than at year-end 2021. This figure includes €18.2 million in CAPEX investments, a €72.3 million increase in working capital, owing to the higher stock prices and strong positions taken in raw materials during the quarter, and the payment of €44.8 million in corporate income tax.
With regard to raw materials, the climate situation in Spain and other countries is causing price hikes deriving from the prospects of a smaller rice-growing area, less rice sown and competition with other cereals. Faced with this complicated situation, we have taken advantage of our diversified global sourcing structure to make large procurements, in which we have also had to bear the extremely high shipping costs.
Our brands have performed favourably in both businesses (European and North American). In particular, Riviana achieved double-digit growth, boosted by the high service levels secured with the industrial investments made in recent years. In Europe, the commencement of operations at the La Rinconada macro plant and the improved productivity at the Tilda plants, among other factors, have also been decisive for increasing the division’s sales and contributing to its consolidated adjusted Ebitda.
One important event during the period was the purchase of the InHarvest business for €48.7 million. This transaction was of significant strategic interest for the Group because of: (i) its easy integration in the Riviana business; (ii) the improvement it will bring to the supply chain and industrial infrastructure of the Ebro Group in the USA; (iii) the access to new business platforms such as Food Service and the military channel; and (iv) the incorporation of the InHarvest value added products in the Riviana portfolio.
The division posted a turnover of €562.3 million and adjusted EBITDA of €73.1 million.
With regard to raw materials, following the 50% reduction of the North American harvest in the previous campaign, this division has also had to endure a major price hike in durum wheat, which hit the Garofalo business especially hard.
In France, the fresh pasta business was also hampered by the sharp price rises in raw materials (semolina, eggs, meat, etc.), energy and packaging materials, the strike at the Lustucru Frais plants and the absence of promotions during the period.
On the positive side, Garofalo still leads the premium segment and has achieved growth in the main countries in which it operates.
The division posted a turnover of €166.1 million and adjusted EBITDA of €17.3 million.
A very complicated quarter
In the first quarter of this year we have seen how, far from easing after 2021, inflation has become even steeper due to the new challenges arising in the wake of the Russian invasion of Ukraine. Although the Ebro group has no operations in those countries, the collateral effects are very strong and we are coming up against higher extraordinary costs as a result of: (i) new waves of inflation in raw and auxiliary materials, transport, energy and labour costs; and (ii) the transport strike in Spain over the higher fuel costs. Against this backdrop, our latest estimates point to cost inflation for this year of €234.4 million, on top of the inflation already suffered in 2020 and 2021.
But in spite of all, we have achieved positive results thanks to the soundness of our brands, a strong, highly diversified supply chain and the business consistency of our Group. We place our trust in these strengths to weather this complicated situation with certain guarantees.