On September 28, 2018, the Supervisory Board, chaired by Martin Ducroquet, audited the financial statements 2017-2018 submitted by the Managing Director and confirmed by the Company's statutory auditors.
For the 2017-2018 financial year, which ended on June 30, 2018, the Bonduelle Group generated revenues of €2,776.6 million. This represents an increase of +21.4%, primarily due to the consolidation of the acquired Ready Pac Foods company and the resilience of the Group's historic core business. The current operating result also rose to a record level of +14.2%. Although the Group's operating margin is diluted on an annualized basis, the profitability of Ready Pac Foods, now Bonduelle Fresh Americas, improved significantly in the second half of the year, as expected. The Group's historic core business saw its operating income grow by +6.4% at constant exchange rates.
This good operating and financial performance, which was achieved against the backdrop of a still sluggish but improving consumer environment in Eastern Europe in Europe and the US, demonstrates the validity of the Group's business model. This was reorganized in terms of both regional and operational segments (canned goods, frozen foods, fresh ready meals) together with the distribution networks (retail and gastronomy). In addition, there is a growth strategy that combines organic growth and acquisitions. The completion of the acquisition of the Del Monte business in Canada underscores the Group's ambitions to move towards vegetable products.
In the 2017-2018 financial year (1 July 2017 - 30 June 2018), the Bonduelle Group generated sales of EUR 2,776.6 million. This corresponds to an increase of + 21.4% based on the reported figures. This increase is mainly due to the full-year consolidation of Ready Pac Foods (+ 23.6%), which was acquired on March 21, 2017, as well as the increase in activities with a consistent scope of consolidation (+ 0.3%). However, negative currency effects (-2.6%), mainly in relation to the US dollar, the Canadian dollar and the Russian ruble, dampened growth.
The Europe region (46.5% of total sales) grew + 1% in the 2017-2018 financial year compared to + 0.2% in the past fiscal year. This increase in sales was the result of some of the innovations introduced by the Bonduelle and Cassegrain brands (notably Légumiô and VeggissiMmm!) And led to market share gains in many countries and segments. In addition, more favorable weather conditions limited product shortages in temporarily shrinking markets.
Outside Europe region
Non-Europe regions, which mainly comprise North and South America and Eastern Europe, and now comprise a majority of the Group's geographic portfolio, accounted for 53.5% of consolidated sales as at 30 June 2018. Thanks to the year-round integration of Ready Pac Foods, which was adopted on March 21, 2017, and consolidated for more than 12 months compared to three months in the previous fiscal year, and despite an unfavorable currency effect, which had a significant impact on the region, the region posted one + 47.0% increase in reported numbers and -0.5% on a like-for-like basis. The limited growth on a comparable basis (2) in the non-European region can be explained by:
- a saturation of production capacity for canned and frozen foods in North America due to better portfolio management and the fact that the previous year had 53 instead of the usual 52 weeks;
- a decline in the fresh ready meals business of Bonduelle Fresh Americas in the fourth quarter of the 2017-2018 financial year due to a high comparable basis from the same period last fiscal year;
- a return to the growth of activity in Eastern Europe, combined with some market share gains which, despite the signs of recovery, have not regained the momentum of recent years;
- A gradual strengthening of partnerships with Unilever in Brazil and the evolving business model
Current operating income
For the 2017-2018 financial year, the operating income of the Bonduelle Group amounted to € 123.6 million, an increase of + 14.2% in relation to the reported figures. As a result of this earning power, a current operating margin of 4.5% is achieved, which equates to an increase of 60 basis points with a constant scope of consolidation, supported by increased marketing investments, which increased by 6%. In the Europe region, the current operating margin increased to 4.4%. In the region outside Europe, current operating income, which, in terms of sales, is above the average growth of the Group (especially in Eastern Europe), remained stable in the Group's historical core business at constant exchange rates.
The current operating result of the Group's historic core business is €112.9 million, compared to €106.1 million in the past financial year, which represents an increase of + 6.4% at constant exchange rates. Despite the lack of revenue growth, this significant increase in profitability in the Group's historic core business is in line with the announced targets and underlines the Group's operational efficiency. Net one-time charges are €4.6 million, which consists mainly of costs related to deductibles due to weather events in the US and restructuring measures. Taking into account the aforementioned expenses, the operating result amounts to €119 million, an increase of + 18.8%.
Net financial expenses amounted to € 25.3 million compared to € 18.2 million in the previous year. This increase is directly attributable to the Group's average debt growth related to the financing of the acquisition of Ready Pac Foods throughout the year. It will be partially offset by the Group's ongoing deleveraging without external growth. The tax expenditure of € 21.4 million is lower than in the previous year (€ 22.3 million) and corresponds to an effective tax rate of 22.8%. The net result amounted to € 72.3 million and thus increased by + 20.9%. As in the previous year, it corresponds to 2.6% of sales.
The Bonduelle Group confirms its sales growth target of 5% p.a. as part of VegeGo!. The aim is a balance between organic and external growth. The operating profit should increase by 7.5% p.a.. Operational efficiency initiatives in the Group's traditional core business and at Bonduelle Fresh Americas, as well as the full-year contribution from Del Monte Canada, will enable a significant increase in current operating profit in the 2018-2019 fiscal years. Despite the poor weather conditions and resulting crop failures in the summer of 2018, the Bonduelle Group has set itself the goal of increasing sales by 2.5% and operating profit by 5% (both at constant exchange rates).