ORIOR Presents Good First Half of 2016
OREANDA-NEWS. ORIOR, the Swiss leader for fresh convenience food and refined meat products, achieved good results in the first half of 2016 amid a challenging environment. Revenues declined by 0.8% but operating results improved. The general market environment was challenging, both with retailers and food service providers and with regard to procurement prices for raw materials. The measures and initiatives introduced with the ORIOR 2020 strategy presented in Q4 2015 had a positive impact and contributed to the good results.
ORIOR Group generated revenues of CHF 239.5 million in the first half of 2016, which corresponds to a slight decline of 0.8% (1H 2015: CHF 241.5 million). The main reasons for the year-on-year decline were pricing pressure, sales promotion activities and B?ndnerfleisch exports. Another factor was the change in the business model for the exports of vegetarian and vegan specialities under the “Nature Gourmet” brand, which have been produced and distributed through a licensing partnership with the German company Tofutown since March 2016. The Swiss business reported positive volume growth albeit slightly lower sales revenues, due to pricing pressure and sales promotion activities.
EBITDA increased 1.3% to CHF 22.7 million (1H 2015: CHF 22.4 million), which raised the EBITDA margin by 20 basis points to 9.5%. Higher EBITDA led to a likewise good EBIT result of CHF 15.5 million compared to CHF 15.0 million in the first half of 2015. This corresponds to an improvement of 3.0% and a 24 basis point increase in the EBIT margin to 6.5%. Net profit rose by 17.4% to CHF 12.1 million compared to CHF 10.3 million in the first half of 2015, which was negatively impacted by exchange rate fluctuations. The net profit margin increased by 78 basis points to 5.1%. An equity ratio of 55.5% (1H 2015: 54.7%) gives ORIOR a solid foundation for the successful execution of the ORIOR 2020 strategy.
ORIOR Convenience, the specialist for fresh convenience food with its three competence centres Fredag, Le Patron and Pastinella, outperformed the broader market in most product categories but could not hold its revenues at the level reported for the first half of 2015. Lower segment sales are mainly attributed to the aforementioned change in the business model for the exports of vegetarian and vegan specialities, product portfolio optimisation and a decline in fresh pasta sales. The Fredag and Le Patron competence centres delivered positive growth, especially with their innovative solutions for vegetarian specialities, as well as with poultry and seafood specialities and snacks. Total Convenience sales declined by 2.2% to CHF 95.4 million and EBITDA was 3.0% lower at CHF 13.3 million, which corresponds to a margin of 14.0%.
The Refinement segment, the specialist for refined meat products with its three competence centres Rapelli, Albert Spiess and M?fag, generated revenues of CHF 144.8 million and thus held its revenues at the same level as at the mid-year mark in 2015 despite challenging market and procurement conditions. The “Rapelli” brand was a strong performer with its new brand identity, increased distribution and its growing sales of barbecue specialities. Albert Spiess grew its business with the “Albert Spiess” branded products following that brand’s repositioning in the autumn of 2015, and M?fag delivered another good performance with its innovative regional specialities. Despite slightly higher meat prices, the segment’s gross margin was steady thanks to an unerring focus on portfolio management. Profitability improved significantly; EBITDA rose 5.7% to CHF 11.7 million while EBIT rose 11.4% to CHF 7.9 million, lifting the margin by 55 basis points.
The Corporate and Export Segment reported revenues of CHF 9.6 million, which is 4.0% below the figure for the prior-year period. This contraction is partly attributed to the change in the business model for the exports of vegetarian and vegan specialities. In addition, persisting economic headwinds in France and the resulting highly competitive situation have held back exports of B?ndnerfleisch to France.
ORIOR 2020 strategy on track
The ultimate aim of the ORIOR 2020 strategy is steady value creation. A number of action plans and initiatives are under way in the following five strategic pillars: “House of Innovation”, “Brand strengthening and expansion”, “Agility and cost efficiency”, “The ORIOR responsibility” and “We are ORIOR”. ORIOR is steadfastly implementing its ORIOR 2020 strategy with determination and drive.
Culinor will become ORIOR’s European centre of competence.
With the acquisition of Culinor Food Group ORIOR has taken out a significant position in the premium fresh convenience food market in the Benelux and created a strong platform from which it can successfully address the entire European market. Culinor operates production plants in Destelbergen (BE), Gent (BE), Olen (BE) and Herselt (BE) as well as a logistics centre located in Destelbergen (BE). All of its production plants are equipped with highly modern systems and offer a variety of technologies for producing premium fresh convenience food products. Culinor will operate as an autonomous competence centre within ORIOR and serve as the European platform for targeting the entire European market.
Core business strengthened
ORIOR is confident that the fresh convenience market segment will grow in importance over time. With the slow disappearance of long-established daily patterns, consumers are having increasingly fewer large meals and are also less likely to eat at fixed times of the day. Instead, there are certain windows of time when smaller meals are quickly prepared and eaten. High-quality fresh convenience products that address this trend are in high demand. Belgium is considered one of the most innovative countries in Europe when it comes to sophisticated convenience food and it has repeatedly set international trends with its creations and new developments. Culinor Food Group, with its large portfolio of high-quality products, its specialisation on chilled prepared meals and ready-made meal components, and agile structures, is one of the foremost players in the highly innovative market of fresh convenience food. Its products range from classic local cuisine such as stamppot and vol-au-vent to meat, fish and oven entrees and stews, soups and sauces. Culinor’s portfolio also includes innovative convenience concepts such as the to-go line “Meal