Tipping their hats to factory workers and other employees who have been getting the job done during the Covid-19 health crisis and lockdown, Bonduelle Group Chairman Christophe Bonduelle and CEO Guillaume Debrosse were pleased to report that revenues rose 12.7% during the third quarter of 2019-20 to €761.2 million and 10.6% on a like for like basis after taking into account exchange rate variations (mainly the appreciation of the US and Canadian dollars and, to a lesser extent, the Russian ruble).
Frozen product sales generated by the Villeneuve d’Ascq, France-headquartered vegetable specialist, which operates 56 production and packing sites around the world, amounted to €175 million, up +13.2% to account for approximately 26% of Q3 sales ending on March 31.
“We would like to congratulate and thank the teams for their professional conscience which encouraged them not to ‘stay at home,’ unless it was impossible,” said Bonduelle and Debrosse in a joint statement issued on May 5.
Over the past nine months, receipts topped € 2,203.5 million, an increase of +5.8% on reported figures and +3.8% on a like for like basis as a result of favorable exchange rate movements. Frozen product sales entered the ledger at +8.2% to €497.5 million, accounting for over 24% of total turnover during the period.
Results by Geographic Regions
Revenue of €990.2 million generated in the Europe Zone, amounting to 44.9% of the group’s sales over the first nine months, represented an overall aggregated growth of +3.6% both on reported figures and on a like for like basis.
During the third quarter receipts increased +11.5% on reported figures and +11.6% on a like for like basis. At the end of February 2020, Q3 revenue for the first two months remained virtually stable compared with the last fiscal year, both on reported figures and a like for like basis. This strong growth is largely explained by a surge in retail buying of canned and frozen vegetables in March triggered by the Covid-19 pandemic uncertainties.
The abrupt shutdown of restaurants and other foodservice operations in many countries as of mid-March, however, has weighed in on the frozen sector and will be felt even more strongly in the fourth quarter. The fresh segment (fresh-cut bagged salads and ready-to-eat prepared salads) also suffers in this context from the decline in foodservice activity, but also from a lack of foot traffic at points of sale and a reduced consumer appetite for products with a shorter shelf life.
Non-Europe Zone
Sales rung up in the Non-Europe Zone, representing 55.1% of the group’s total turnover during the first nine months, logged overall growth of +7.7% on reported figures and +4.-% on a like for like basis.
In Q3 revenue rose +13.7% on reported figures and +9.9% on a like for like basis. During the first two months of 2020, third quarter revenue was up by 8.3% on reported figures and by 4.7% on a like for like basis compared with the last fiscal year.
While stockpiling-motivated purchases also increased, particularly in canned food in Russia, Canada and the United States in March, a delayed effect of Covid-19 pandemic buying was generally observed in countries outside Europe in which the Bonduelle Group operates. Thus, in Canada and the United States, coronavirus containment measures, which happened later on and are less strict than in Europe, had a more limited effect on the period. But this is expected to strengthen in Q4, particularly for foodservice products.
The group is noticing the beginning of a downturn in Bonduelle Fresh Americas activities for the “ready-to-eat” bowls and “on the go” products, which is expected to increase in the fourth quarter, depending on the extent of containment measures in place.
2019-2020 Outlook
As announced on April 8, the Bonduelle Group’s business trends varied from one segment to the next – strong demand in canned and frozen food retailing and high volatility of the fresh segment, collapse of the foodservice business activity – and geographical areas, and is subject to additional costs, some of which cannot be passed on.
Given the uncertainties generated by the Covid-19 pandemic, the lack of visibility on its evolution, and therefore the inability to anticipate its impacts, the company has suspended the objectives set forth at the time of publication of the 2019-2020 half-year results, which did not include the impact of the economically disruptive health crisis.
While Bonduelle took immediate action to limit adverse fallout from the pandemic on its operations, it also took steps to ensure the protection of its employees and business continuity. The scale and duration of the crisis is now likely to prevent the achievement of the annual objectives set, particularly in terms of profitability.
Preparing for 2020 Crops
Meanwhile, the company has confidently begun preparations with its agricultural suppliers for the 2020 crops, which at this stage do not show any difficulties.
