Results Vion faces uncertainty, but also sees opportunities

by Editor fleischwirtschaft.com
Friday, March 27, 2020
The initiation of new Vion ‘Building Balanced Chains’ strategy with concepts for sustainable chains was started.
Photo: Vion
The initiation of new Vion ‘Building Balanced Chains’ strategy with concepts for sustainable chains was started.

2019 was a good year from a financial perspective due to the results of the Pork division. Internal restructuring is planned.

Vion initiated its new strategy ‘Building Balanced Chains’ in 2019. The objective of this strategy is to enable Vion to develop sustainable chains that contribute to a healthy food supply. 2019 was a good year from a financial perspective due to the results of the Pork division, with good margins in Europe and increased demand in Asia, from which Vion benefited due to its excellent shipping infrastructure to Asia.

Key financial figures

  • Revenue increased by € 390 mill. (8.4%) to € 5.1 bn. in 2019, primarily due to the increased prices for pork products.
  • The normalised EBITDA for 2019 was € 113.2 mill. compared to € 60.5 mill. in 2018. The increase was a result of investments in recent years and excellent results achieved by the Pork division.
  • Net profit increased from € 10.2 mill. in 2018 to € 26.6 mill. in 2019.
  • Working capital increased by € 125.5 mill. due to higher livestock and meat prices.
  • In 2019, € 54.7 mill. has been invested in various production locations.
    Vion Bernd Stange
    (Bild: Vion)

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    German operations Management changes at Vion

What was achieved this year

  • Initiation of new Vion ‘Building Balanced Chains’ strategy with concepts for sustainable chains.
  • € 35 mill. investment in Vion Boxtel location to shorten the chain and enable a sustainable way of working at a single location.
  • Vion ranks at the top of the global ‘Business Benchmark on Farm Animal Welfare’ (BBFAW) and once again increased its ranking in the ‘Transparency Benchmark’.
  • Good Farming Star, Good Farming Balance, Good Farming Organic, De Groene Weg [The Green Path] and GQB, are examples of the ‘Building Balanced Chains’ strategy.
  • Vion launched a new plant-based protein chain named ‘ME-AT’ for retail customers.
  • The cattle slaughterhouse in Leeuwarden has been converted into a plant-based meat substitutes production plant.
  • Vion identified 18 relevant themes for its CSR policy, including 11 social themes, 5 environmental themes and 2 economic themes. Vion has formulated active policy for nine of these themes within the organisation.
  • The Good Farming Organic chain, an organic chain concept, was launched in Germany.
  • The mixed pigs and cattle location in Altenburg, Germany, will stop the supply of pigs and will invest in expanding the cattle slaughterhouse.
    Allard Bakker
    (Bild: rh)

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Outlook to the year 2020 - uncertainty due to Covid-19

In 2020, on the basis of its new ‘Building Balanced Chains’ strategy, the company will continue to intensively work on building new chains in the Netherlands and Germany. This is of key importance for all agricultural entrepreneurs and chain partners. Furthermore, the firm will be restructuring the organisation from three divisions to four business units: Pork, Beef, Food Service and Retail. The Retail business unit is new and will focus on innovations, plant-based protein and meat products for retail customers. The strategy’s implementation is supported by targeted communications, culture and leadership programmes, together with the associated ICT solutions.

The coronavirus (COVID-19) is creating major uncertainties in 2020. In supplying food products, Vion plays a critical role in the continuity of society’s food supply. The corona crisis has created a major change in consumption patterns; people are no longer eating out, but are eating at home. The sale of meat to restaurants and hotels has come to a standstill, while deliveries to supermarkets have significantly increased. The turnover of convenience meat products, such as minced meat, is increasing in comparison to more luxurious products.

These shifts have a major impact on the valorisation of meat, causing the relationship between purchase and selling prices to shift as well. The safety of our employees has the highest possible priority, while we are doing everything in our power to responsibly continue production. Vion plays an essential role in supplying food to society and is working in close cooperation with governments in the Netherlands and Germany to keep the supply of food up to par during this crisis.

Due to the coronavirus, the infrastructure in Asia has become difficult for pork exports. Yet, Asia continues to offer opportunities in 2020, in part due to the persistent African swine fever outbreak there. This also is a potential threat in Europe, which is being monitored in close consultation with governments.

Australien Abstand
(Bild: Imago Images / AAP)

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