Currency effects, Hostess bankruptcy hinder Corbion

by Jeff Gelski
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AMSTERDAM, THE NETHERLANDS — Net sales declined slightly for the Biobased Food Ingredients segment of Corbion n.v. in the 2013 fiscal year, mostly because of currency effects, the Amsterdam-based company said Feb. 26. The segment reported limited volume growth.

Net sales for the fiscal year were €566 million ($781 million) for Biobased Food Ingredients, down from €579.7 million in the previous fiscal year. Excluding one-off costs, EBITDA for Biobased Food Ingredients was €105.7 million ($145.9 million) in the fiscal year, down from €106.9 million in the previous fiscal year. One-off costs primarily involved advisory costs connected to the divestment of the bakery supplies businesses.

“Our largest market unit, Bakery, showed a slight volume decline in 2013, in line with or better than the North American bakery market,” Corbion said. “The bankruptcy of one of our largest baking customers (Hostess Brands, Inc.) towards the end of 2012 caused some loss of volume.”

Corbion said volumes grew in Meat and Culinary and foods in 2013. The growth followed two years of decline caused by the substitution with chemically derived preservation products following a legislative change in 2011.

Corbion, formerly known as CSM, last July announced it had completed the divestment of its European Bakery Supplies and North American Bakery Supplies businesses to Rhone Capital. Corbion now has two segments: Biobased Food Ingredients, which includes Caravan and Purac, and Biochemicals.

Corbion companywide had EBITDA of €81.3 million in the fiscal year, which was down from €88.7 million in the previous fiscal year. Excluding one-off costs, EBITDA was €99.2 million, up from €90 million. One-off costs for the year amounted to €17.9 million. Fiscal-year net sales of €743.6 million compared with €753.7 million in the previous fiscal year.

“Conditions in our main U.S. and European markets remained difficult in 2013, with subdued economic growth and flat or slightly lower food consumption,” said Gerard Hoetmer, chief executive officer of Corbion. “In this environment we were capable of delivering organic sales growth of 1.5% and volume growth of 3% during the year. The reported EBITDA before one-off costs for the full year 2013 was stable at €99 million, but would have grown to €104 million excluding negative currency effects.”

In the fourth quarter, Corbion had EBITDA of €9.7 million, down from €21.2 million in the previous year’s fourth quarter, and net sales of €184.6 million, up from €182.6 million.

Corbion said in 2014 it expects the economic environment will continue to be challenging with some headwinds from a strong Euro. Corbion expects to see benefits when new, lower cost contracts replace old raw material cover positions.
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