Bonduelle shrugs off 'sluggish' Europe to deliver growth


French vegetable processor Bonduelle broke €2bn in annual sales for the first time, despite what it described as “sluggishness of the consumption in Europe, [the] economic crisis in emerging countries, difficult harvests”.

The company said that sales increased to €2.29bn in the 12 months to 30 June, up 16.3% year-on-year at current exchange rates or 2.7% at constant exchange rates.

The result was boosted by the inclusion of the group’s recently acquired US business, Ready Pac, and by growth outside the Euro-zone, where sales gained 45.9%. Within Europe, where Bonduelle generates 56% of turnover, top-line growth was slower at just 0.2%.

Gains were also uneven across Bonduelle’s operating segments. Fresh packaged salad sales were boosted by forex, rising 59.3%. However, excluding currency exchange fresh sales dipped 0.8%. This contrasts with growth at both Bonduelle’s canned and frozen units, which increased constant currency sales by 1.2% and 7.5% respectively.

Bonduelle reported that sales growth gained steam in the fourth quarter when revenues increased 4.6% excluding currency and 51.9% at current exchange rates.

Outlook lifted but is it sustainable?

Bonduelle said that this “dynamic” fourth quarter means that it should post profit ahead of expectations.

“Due to a dynamic activity observed in quarter four, the group should record, at constant exchange rate and scope of consolidation, a current operating profitability close to the one recorded in FY 2015-2016, despite the impact of poor harvests in summer 2016. This performance, higher than the annual objectives announced in October 2016 and revised upwards in March 2017, will be strengthened by favorable exchange rates and the contribution, for roughly a quarter, of Ready Pac Foods,” the company noted.

However, Midcap Partners analyst Florent Thy-Tine told FoodNavigator that Bonduelle’s fourth-quarter performance was boosted by seasonal factors. In particular, Thy-Tine stressed that the boost did not represent a sustainable improvement in the European market, where Bonduelle has struggled to grow.

“The Q4 was strong but it is a weather effect. As we had a sunny quater in Europe, customers bought more salads,” the analyst suggested. “We can’t say that we have a real improvement in the EU veg business but the consumption is better and better in Europe. I do not think the Q4 is sustainable, because of the weather effect, but the consumption environment is better.”

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