The Bonduelle Group reported on March 1 that consolidated net profit rose by 0.5% to EUR 36.6 million (approximately US $3.9 million) during the July 1 – December 31, 2015 period, as it faced “an ever challenging environment.”
Total revenues during the first half of financial year 2015-16 amounted to EUR 1,011.6 million. The result, while up +2.6% on a like-for-like basis, reflected a -0.7% downturn due to the adverse impact of currency translation – especially the weakened Russian rouble.
Frozen segment sales fared well for the Velleneuve, France-headquartered producer of value-added vegetables, as receipts rose +10.9% at current exchange rates to EUR 299.9 million. Sales in the fresh-processed segment rose +6.3% to EUR 202.4 million. However, turnover in its biggest sector, canned vegetables, fell -8.7% to EUR 509.3 million.
Geographically, consolidated turnover dipped a slight -0.3% to EUR 637.7 million in the Europe Zone, which is the company’s biggest area of business. The Non-Europe Zone saw a -1.5% decline to EUR 373.8 million at current exchange rates.
Activity in Russia and other members of the Community of Independent States (CIS) took place in a depressed consumption environment, noted Bonduelle. Signs of recovery were seen in the second quarter, though, particularly in the canned segment.
In the Americas, the company recorded growth that outperformed the markets, thus strengthening its commercial positions. In addition, it benefited from the revival of competitiveness of the US-Canadian dollar parity for exports made from Canada to the United States.
The Group’s current operating result stands at EUR 64 million, compared to EUR 66.5 million during the like half-year period of 2014-15. The Euronext-listed company reported to shareholders: “After restatement on the basis of the exchange rates of the previous year, the current operating profitability for the first six months of this fiscal year recorded an increase of 7.3% and an operating margin of 6.8%, an increase of 30 basis points.”
Reorganization of Production in France
Meanwhile, the Group’s Bonduelle Europe Long Life (BELL) subsidiary on January 25 announced plans to shut down plant operations in Russy Bemont (Oise) by the end of this June, while continuing logistics activities there through September. It will thus concentrate Nord Picardie vegetable canning activities at factories in Estrées-Mons (Somme), Vaulx-Vraucourt (Pas de Calais) and Penescure (Nord).
“The European market for canned green vegetables is indeed suffering from excess production. This situation has led to a price war, notably in the private label market, which has highly impacted the profitability of this sector,” stated the company in a press release. “In this context, BELL must therefore adapt its industrial assets while pursuing a strategy to develop its own brands.”
Ardo Buys Bonduelle’s UCR Stake
In other news, on February 3 Bonduelle announced the sale of its 50% equity stake co-owned with the Ardo Group in the Ultracongelados de la Ribera (UCR) to the Ardooie, Belgium-headquartered company. The arrangement enabled Ardo to acquire all of Bonduelle’s UCR stock retroactively to January 1, 2016. The deal included real estate assets in Valence that were previously Bonduelle’s property.
Bonduelle, which sources vegetables from approximately 128,000 hectares of farmland around the world, operates 58 industrial sites. Finished products, sold under brand names and private labels, are exported to more than 100 countries.
