Ebro posted a net turnover of €1,957 million in 2013, just 1.2% less than in 2012, as a result of lower procurement costs and the sale of the Nomen brand.
With the exclusion of Nomen, the exchange rate effect and an 8.5% increase in investment in advertising, which totalled €72 million in 2013, EBITDA stood at €282 million, down 5.6% (€16 million) year on year. Of those €16 million, 5 corresponded to the exclusion of Nomen, 6 to the increased advertising and 5 to the exchange rate effect. Therefore, on a like-for-like basis, the EBITDA would have been more or less on a par with that of 2012.
In this context and with smaller extraordinary income, since last year’s earnings included the gain on the sale of Nomen and major reversals of over-provisions recognised for the legal disputes affecting the sugar and dairy divisions, the net profit in continuing operations was €141.5 million, 12% down on the previous year.
The company’s final debt was up €93 million to €338 million, encompassing the investments made to purchase a rice plant in India, 25% of the Italian company Riso Scotti and Olivieri, for an aggregate sum of €111 million.
Core businesses
Rice
This division has had a bittersweet year. On the one hand, the evolution of its brands has been satisfactory in both Europe and the United States, with growth in market shares and excellent shelf positioning, achieved through the launching of numerous new products. On the other hand, hampered by several factors external to development of the business, the division has had to cope with a difficult year and the satisfactory performance of its brands has not been reflected in its results. These factors were mainly the mass default of basmati supply contracts in India, continuation of the severe drought in Texas and the impaired profit margins in Morocco owing to large-scale smuggling of rice into the country.
Against this backdrop, the division posted a turnover of €1,090 million and EBITDA of €138 million.
Pasta
In a context of stable durum wheat prices, the evolution of this division was positive, reaping the first benefits of the change in strategy implemented in the USA during the second half of 2012.
In Europe, in a scenario of strong private label growth and constant promotions by our rivals, the Panzani brands have managed to maintain their market shares and profit margins, even improving their position in the fresh products segment. In the United States, thanks to the new strategy, margins have started to improve and the new launchings of gluten-free products and sauces in Canada have gone down well with consumers. The future incorporation of Olivieri will considerably boost the potential of this division on the other side of the Atlantic.
The division posted a turnover of €915 million and EBITDA of €153 million.
A complicated year with a positive reading
Although the consolidated results have been dented by all the external factors that have hampered the rice division, the overall balance and evolution of Ebro during 2013 have been very positive, since in a sector increasingly dominated by private label, its brands have hung on to their leading positions through intense work in innovation, commercial and marketing aspects. The company has remained firm in its strategy, aiming to continue growing with a clear, sustainable, sound, definite future projection. In this regard, the company has worked hard on:
• Supporting the development of its brands through strong investment in advertising;
• Approaching consumers and securing their loyalty through the constant launching of new products in both Europe and North America;
• Broadening its field of action through inorganic growth, incorporating new countries and new product ranges through the acquisition of a rice plant in India, the fresh pasta and fresh sauces business of Olivieri in Canada and 25% of the Italian company Riso Scotti, specialising in top-of-the-range rices;
• Pulling out of any businesses that do not meet the Group’s profitability criteria, as in the case of the German pasta business;
• Implementing corrective measures to soften the blow of external factors on the development of Ebro’s business;
• Optimising the company’s industrial structure.
