Vion improves operational performance and reinstates dividend
Boxtel, 29 March 2018 – Today, Vion announced that it continued to improve its performance in 2017, resulting in a normalised EBITDA of €64 million versus €61 million in 2016. On the back of these solid operational results and its strong balance sheet, Vion reinstates its dividend with a first payment based on the results of 2017 of €9.5 million.
- Net sales up 7% to €5.1 billion (2016: €4.8 billion)
- Normalised EBITDA from ongoing operations increased 5% to €64 million (2016: €61 million)
- Net profit of €22 million versus €39 million in 2016 as the result of €9 million lower tax benefits and €13 million higher restructuring and results on acquisitions and disposals
- Robust balance sheet with a solvency of 44.3% (2016: 42%)
- Dividend reinstated with a first payment based on the results of 2017 of €9.5 million
- Successful launch of “Good Farming Balance”, a demand-driven approach, to better capture the opportunities in the international pork markets
- Conversion to IFRS completed
- Publication of a second corporate social responsibility (CSR) report
Achievements on many fronts
Francis Kint, CEO Vion: “In 2017 we have achieved a lot. We improved our operational results for the second year in a row, with normalised EBITDA now up to €64 million. At the same time, we continued our investment programme to improve our production footprint. Our investments now total €260 million over the last four years, while maintaining our solvency ratio comfortably above 44%. Realising that the meat industry is at the heart of societal debate, we are actively engaged in stakeholder dialogues and proposing and implementing solutions.”
In March Vion’s Pork division introduced “Good Farming Balance”, a demand-driven approach, to better capture the opportunities in the international pork markets, bringing improved perspectives for Dutch pig farmers. It was a success and more than 70% of the pigs purchased in the Netherlands are now contracted in one of Vion’s concepts (Good Farming Star, Good Farming Balance and De Groene Weg). To answer to the consumers’ increasing demand for upscale products, our Beef division launched several families of products such as dry-aged, Simmenthal and regional origins. Our Food Service division has continued to broaden its assortment with innovative concepts such as noodle sticks for the out-of-home segment and thus offer caterers and restaurants solutions to delight its guests.
Corporate social responsibility
Our first CSR report, published in April 2017, was well received by all our stakeholders and was followed in our industry. In the second CSR report, we have widened the themes from the part of the value chain in which we are active to the entire chain. We have also connected our topics and related initiatives to the United Nations’ Sustainable Development Goals (SDGs). We have introduced two major societal issues in our report: the environmental aspects of livestock farming and greenhouse gas emissions of the meat production chain.
Continued focus on transparency
Following the launch of a dedicated website of transparency in Germany, we expanded it in the Netherlands, through the launch in December 2017 of www.vion-transparantie.nl. On this website, Vion explains how it operates, publishes facts and data of audits and opens a forum for discussion with stakeholders.
Prospects for 2018
2018 will be a pivotal year for Vion because many initiatives taken in the last years will start bearing fruit this year. While livestock prices have been increasing since the beginning of the year, this is so far not matched by increasing meat prices. We expect the societal debates around livestock farming and meat production to strengthen and increase the relevance of the themes that Vion has put on the table since three years.
Financial results and financial position
Consolidated key figures
|(Amounts in millions of euros)||2017||2016|
|Normalised EBITDA from ongoing activities||64||61|
|Earnings before interest and taxes||24||30|
|Cash flow from operating activities||39||6|
|Cash flow from investing activities||(62)||(66)|
- Revenues increased in 2017 with 6.5%, positively impacted by higher meat prices. Sales volumes slightly decreased in our Pork division following the closure of our facility in Zeven in April, while volumes in our Beef and Food Service divisions remained stable.
- Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) from ongoing activities increased by 4.9% to €64 million in 2017 as a result of the ongoing execution of the strategy of performance improvement. EBITDA in 2016 included a one-off €7 million settlement received from the city of Ansbach. Excluding this settlement in 2016, EBITDA improved in 2017 by 18.5% compared to last year.
- Earnings before interest and taxes (EBIT) showed a €6 million decrease in spite of the €3 million increase in normalised EBITDA, mainly because of €13 million higher restructuring costs only partly offset by €6 million higher income for acquisitions and disposals.
- For 2017 Vion reported tax income of €4 million following the recognition of net operating losses from prior years, compared to €13 million in 2016.
- Operating cash flow for the year amounts €39 million as the result of a positive cash flow from operating activities of €35 million and a decrease of working capital of €4 million.
- In 2017 €79 million was invested, mostly in maintaining, modernising and expanding the production locations in all three divisions. In addition an amount of €22 million was used for the acquisition of Otto Nocker and the acquisition of shares from minority shareholders in certain subsidiaries.
- As a consequence, the net debt position of €18 million at the end of 2016 increased to €51 million at the end of 2017. Despite the large investments made during 2017, our solvency further improved to 44.3%.
- At the end of 2017 Vion had total available liquidity of approximately €168 million, consisting of €21 million in cash and cash equivalents and €147 million available under the new working capital facility of total €200 million.
- Following the improved results in recent years Vion will, for the first time since 2012, pay out a dividend to its shareholders over the year 2017 of €187.07 per issued share. Based on the number of outstanding shares, 50,784, this will result in a dividend of €9.5 million.
Annual and CSR reports 2017
Vion’s 2017 annual report and the 2017 corporate social responsibility report are available on the company’s website www.vionfoodgroup.com.