THE NETHERLANDS, Boxtel. 2018, Vion finalised the four year business plan to invest in and modernise its production footprint in its home markets of Germany and the Netherlands. This contributed to the annual results for 2018, where a strong operational cash flow reduced the net debt position and further improved the solvency rate of the company. However, the EBITDA was below that of 2017, due to low cattle-hide prices and an exceptionally warm and dry summer.
The normalised EBITDA was €60.5 milli. compared to €64.0 million in 2017. The net profit decreased with €11.6 mill. to €10.2 mill., following higher depreciation charges from investments in recent years and lower tax benefits. The free cash flow was €28.8 mill., mainly driven by a reduced operating working capital. The solvency rate increased to 45.4% (2017: 44.3%). The net debt was €35.1 mill. at the end of 2018, representing a decrease of €14.9 mill.
The company launched Good Farming Balance, a demand-driven Pork supply chain, in Germany. They were rised to Tier 2 on the global animal welfare benchmark BBFAW. The significant investments of €61.2 mill. improving their competitive base, for example in plants in Leeuwarden and Waldkraiburg. There is a €35 mill. planned investment in Boxtel, enabling a shorter supply chain and a sustainable way of working at one location.
Ronald Lotgerink, CEO of Vion, commented: “The initiatives included in our strategic plan to modernise our production footprint will provide Vion with a strong competitive base for our future growth. On 28 February 2019, we announced the last initiative, an investment of €35 mill. in our production facility in Boxtel, which will enable a shorter supply chain and a sustainable way of working at a single location. The initiatives contribute to our operational profit, but they could not fully compensate for the effects of low cattle-hide prices and high pig prices during a very dry summer. However, we managed to decrease our net debt due to good working capital management and a lower number of investments and restructuring costs compared to 2017. Therefore, our balance sheet remains strong. By building on this solid foundation, Vion will initiate a new strategic plan with a focus on building balanced chains (BBC) in close cooperation with our supply chain partners, thus ensuring a sustainable future for our suppliers, our customers and ourselves.”