Good medium-term growth prospects, an adverse environment in 2014 (29/08/2014 18:00)
Press release Avignon, 29 August 2014 - Naturex, the global leader in specialty plant-based natural ingredients, announces consolidated results for the 2014 first half: Income statement highlights The full income statement is presented as an appendix to this press release.
Significant developments to capture future market growth In a difficult macroeconomic environment that continued to deteriorate throughout the first half, exacerbated by particularly adverse foreign exchange effects, Naturex started to reap the benefits of its reinforced operating structure, focusing on developing products and solutions highlighting its R&D capacity and commercial know-how and also on executing new acquisitions in a sector in a phase of consolidation. Naturex thus completed a major acquisition in the United States in the Fruits & Vegetables based ingredients segment offering significant growth potential. The integration of Vegetable Juices Inc., a key player in the vegetable-based ingredients market, has enabled Naturex to strengthen its position in the United States, the world's largest market for ingredients and trendsetter in the food processing industry. This acquisition makes it possible to benefit from an expanded offering that will complete the existing F&V (Fruits & Vegetables) line of ingredients and generate a significant number of potential synergies, particularly in terms of cross-selling to US customers. It furthermore represents an expansion of technical and market application know-how. To support external growth, Naturex carried out a capital increase with preferential subscription rights for gross proceeds €67.2 million that was a resounding success and restructured with its banking partners its structured credit to align its financial structure with its development. Finally, in the first half, Naturex pursued the development of Chile Botanics, the Chilean company specialised in Quillaja extracts acquired in December 2013: the production unit currently being completed, will come on line in September 2014. The acquisition in June of the operations of distribution and the formulation on extracts of Quillaja Saponaria and Yucca Schidigera from Berghausen Corporation (Chile Botanics' US distributor) has strengthened its position as a specialist in this market for highly technical ingredients. Sales driven by strong contributions from Food & Beverage Consolidated revenue for the 2014 first half amounted to €158.3 million, down marginally from last year's first half in a very unfavourable foreign exchange environment. Sales in the period also include a contribution from new acquisitions which is still limited (2%) and relating to the Food & Beverage business with the integration of Vegetable Juices Inc. and Chile Botanics. Restated to adjust for Svetol® in the United States and krill toll manufacturing sales, first-half revenue was up 2.8% at constant exchange rates. The principal operating highlights for the period by business segment and geographic region are as follows:
Operating indicators significantly impacted by an unfavourable foreign exchange environment Naturex was adversely impacted by the negative effects of a foreign exchange environment that continued to deteriorate in the period; the weakness of a number of currencies, including the US dollar and certain emerging country currencies, relative to European currencies (EUR, GBP, CHF…) continued to weigh on Naturex's margins, with its products originating from production sites in Europe exported worldwide throughout our sales network.
A sound financial position At 30 June 2014, net financial debt totalled €213.9 million compared with €150.7 million at 31 December 2013. After taking into account net proceeds from the capital increase of €65 million paid on 3 July 2014 as well as repayment on 7 July 2014 of the €50 million bridge loan obtained in connection with the Vegetable Juices Inc. acquisition, restated net financial debt at 30 June 2014 stood at €149 million. "Our results for the 2014 first half were directly impacted by a worldwide economic and geopolitical situation that has significantly deteriorated against the backdrop of a very unfavourable foreign exchange environment, resulting as a primary consequence in readjustments by our customers of their procurement plans and significant destocking. This in turn has limited the effects of measures adopted in connection with Group restructuring initiatives", commented Naturex's Chairman-CEO, Thierry Lambert. "Despite this context, underlying trends in favour of natural ingredients remain positive and continue to offer important medium and long-term development prospects. This is particularly the case for the "Fruits & Vegetables" ingredients market where our position has been reinforced. In the 2014 second half, the Group expects to achieve modest organic growth in light of a more favourable comparison base, a good pipeline of projects that will include some noteworthy achievements, as well as the synergies that will start to be generated from Vegetable Juices Inc. Furthermore, the foreign exchange environment is expected to be more favourable though volatile. " Subsequent events Appointment of a Chief Executive Officer - Naturex announced in July the appointment of Olivier Rigaud as Chief Executive Officer of the Group. The purpose of this appointment is to strengthen the Group's senior management to address the next phases of its development and prepare for the future. Thierry Lambert will remain Chairman of the Board of Directors and will assist Olivier Rigaud in order to facilitate the assumption of his duties in fall 2014. Following this transition period, Olivier Rigaud will be in charge of Group management and Thierry Lambert will work on missions relating to business development, including the study of acquisitions and specific projects, in addition to the Chairing of the Board of Directors. Rationalisation of the manufacturing base in the United States - Naturex closes the Shingle Springs production site in California by the end of August 2014. This decision concerns 17 employees. Naturex has operated this site since it was acquired from Brucia in 2002, with the main industrial site in the United States being the one located in New Jersey (South Hackensack) since the acquisition of Pure World in 2005. The California site had limited capacity that was devoted exclusively to blends of nutraceutical extracts coming from the New Jersey site. You can receive all financial information of Naturex free of charge by signing up at: www.naturex.com
Consolidated income statement data
Naturex has been listed since October 1996 on NYSE Euronext in Paris, Segment B
About Naturex Naturex is the global leader in speciality plant-based natural ingredients. The Group is organised around three strategic markets (food & beverage, nutrition & health and personal care) and produces and markets speciality plant-based ingredients for the food, nutraceutical, pharmaceutical and cosmetic industries. Naturex's head office is based in Avignon. The company employs 1,600 people with 8 sourcing offices located throughout the world and high-performance manufacturing operations across 16 sites in Europe, Morocco, the United States, Brazil, Australia and India. It also has a global commercial presence through a dedicated network of sales offices in more than 20 countries.
The Group's half-year consolidated financial statements (including the notes) were presented to the Audit Committee on 28 August 2014 and adopted by the Company's Board of Directors on 29 August 2014. The half-year consolidated financial statements have been audited by our Statutory Auditors who issued their report on 29 August 2014. The interim financial report including the consolidated financial statements and the notes thereto as well as management report for the six-month period ending 30 June 2014 has been filed with the AMF and posted at the Company's website on 29 August 2014. |
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