Business Restructuring and high prices affected earnings
The company generated sales revenue of CHF 4.1 bn. (CHF -65.0 mill., -1.6%) in 2019. Adjusted for acquisitions and divestments, operational growth amounted to CHF 61.4 mill. (+1.5%). The gross margin increased thanks to the shift in focus to products with higher added value. Reported EBIT amounted to CHF 95.3 mill. (CHF -45.3 mill., -32.2%). Taking account of all exceptionals amounting to CHF 53.9 mill., EBIT for 2019 was CHF 149.1 mill. (CHF +8.5 million, +6%).
As in the previous year, the financial result was burdened mainly by book-entry foreign currency effects of CHF -9.6 mill. (previous year CHF -4.6 mill.). The reported annual profit is CHF 49.6 mill. (CHF -39.7 mill., -44.5%). Adjusted for all exceptionals, the annual profit of CHF 103.5 mill. (CHF +14.2 mill.) is up 15.9% on the previous year. Overall, the company’s balance sheet structure is very solid according one's own statements.
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Challenging factors influenced the result
The reorganisation of the Germany division, high prices for raw materials and start-up costs for the new facilities burdened the 2019 annual accounts with exceptionals amounting to CHF 53.9 mill. in total.
At the end of July 2019, the company sold the German plants in Suhl and Börger by way of a business transfer. This completed the exit from the German sausage business announced in June 2019. At the same time, the Bad Wünnenberg (DE) facility was converted into a manufacturing plant for fresh convenience products for Hilcona. The reorganisation of the Germany division generated costs of CHF 38.9 mill.
Raw material prices for pork in Europe rose by more than 43% in 2019. This was caused by the outbreak of African swine fever in Asia and the resulting increase in demand for European pork in Asia. Given the intense competition in the European charcuterie and sausage market, price increases could only be implemented in part and with a delay, even though negotiations were initiated immediately. This led to additional costs of some CHF 9 mill. in the International business area.
Start-up costs for the new production plants generated additional costs of CHF 6 mill. in total, of which the lion's share concerned the commissioning of the new convenience facility in Marchtrenk in Austria in spring 2019.
(Bild: Bell Food Group)
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Change in Board of Directors
The Board of Directors has nominated Thomas Hinderer and Joos Sutter as new members of the Board of Directors. They will be proposed as replacements for the current Board member and Vice-Chair Irene Kaufmann and Board member Andreas Land at the Annual General Meeting on 17 March 2020.