AMSTERDAM, THE NETHERLANDS — Negative currency effects and the inclusion of an algae ingredients business were factors as both sales and EBITDA, excluding one-off items, declined in the first half of the year for Corbion nv.
EBITDA, excluding one-off items, was €71.5 million ($82.7 million), down 19% from €88.3 million in the same time of the previous year. Organic EBITDA, excluding one-off items, increased by 1.2%.
Net sales dropped 4.9% to €439.2 million ($508.1 million) from €461.9 million. Organic sales growth was 3.1%, but currency effects were a minus 8.7%. Acquisitions had a positive sales effect of 0.7%. The sales growth from acquisitions stemmed from the 2017 takeover of most of the assets of TerraVia, an algae ingredients company, and the purchase earlier this year of the remaining 49.9% interest in the SB Renewable Oils joint venture from Bunge.
“As expected, our profitability in Innovation Platforms is adversely impacted by the inclusion of the newly acquired algae ingredients business, which is in an early stage of development,” said Tjerk de Ruiter, chief executive officer of Amsterdam-based Corbion, when first-half results were reported Aug. 8. “We believe that this platform offers many exciting growth opportunities for Corbion, leveraging our expertise of running industrial scale organic acid operations.”
While first-half sales in the Innovation Platforms grew 81% to €21.7 million, losses before interest, taxes, depreciation and amortization, excluding one-off-items, was €13.3 million, which compared to losses of €2.9 million in the previous year’s first half.
After Corbion acquired the remaining interest in the SB Renewable Oils joint venture in June, the associated sales and losses before interest, taxes, depreciation and amortization of the plant were included in the Innovation Platforms from June.
In Corbion’s Ingredient Solutions, sales were down 7% to €417.5 million even though organic sales growth was 1.6%. EBITDA, excluding one-off items, was €84.8 million, down 7%.
Within Ingredient Solutions, Food sales were down nearly 10% to €304.5 million. Food sales on an organic basis were flat compared to the first half of 2017. EBITDA, excluding one-off items, in Food was €54.7 million, down 15%.
Within Food, Bakery sales declined because of last year’s challenges in executing the Bakery channel strategy and losses in frozen dough, but the decline was less pronounced in the second quarter compared to the first quarter. Meat continued its strong performance as the portfolio mix in the United States toward natural preservation systems drove top-line growth and margin improvements.
“I am happy to report that we have seen a continuation of improving organic sales growth rates in our Food business segment, which returned to growth in Q2 after a challenging period,” Mr. de Ruiter said. “In the first half of the year, Corbion performed within the sales growth rate target bandwidth of our creating sustainable growth strategy. Margins in Ingredient Solutions remained at a healthy level of around 20%.”
Sales for Biochemicals, also within Ingredient Solutions, were down 0.4% to €113 million, but organic sales were up 6.2%. EBITDA, excluding one-off items, was €30.1 million, up 13%.
In the second half of the year, Corbion companywide expects organic sales growth to be higher, mainly due to the recovery of the Bakery business. EBITDA margin is expected to be lower because of a less favorable mix in Biochemicals, increased freight costs and increased investments to support strategic growth initiatives.