`World's Largest Olive Oil Company Reports Drop in Sales - Olive Oil Times

World's Largest Olive Oil Company Reports Drop in Sales

By Julie Butler
Feb. 3, 2014 17:39 UTC

Deoleo, the world’s biggest olive oil bot­tler, saw the value of its sales fall to €809 mil­lion last year — down from nearly €829 mil­lion in 2012 and €961 mil­lion in 2011 — and expects to achieve in the realm of €800 mil­lion this year.

In a press release con­tain­ing some details of its pro­vi­sional end of year results, the Madrid-based con­cern also reported Its EBITDA (earn­ings before inter­est, tax, depre­ci­a­tion and amor­ti­za­tion – a broad gauge of a com­pa­ny’s finan­cial health) for 2013 was €80 mil­lion ($100m), com­pared to €88.3 mil­lion the pre­vi­ous year and nearly €73 mil­lion 2011.

A con­sid­er­able improve­ment in per­for­mance in the last quar­ter of the year had par­tially off­set a poor first half, where volatil­ity in ex-mill prices took a toll, it said. It also high­lighted a major reduc­tion in its net debt, which stood at €472 mil­lion at year-end, down from €624 mil­lion in 2012 and €1.5 bil­lion at the end of 2009.

High hopes for new prod­ucts

Regarding its fore­cast sales of about €800 mil­lion this year and growth in EBITDA of more than 20 per­cent Deoleo said these assumed a sta­ble sit­u­a­tion in regard to raw mate­r­ial, full imple­men­ta­tion of cost its con­tain­ment mea­sures, increased sales thanks to new prod­ucts based on inno­va­tion”, recov­ery of vol­umes in mature mar­kets — espe­cially Spain, and growth in inter­na­tional mar­kets.

CEO Jaime Carbó had said in November that the new prod­ucts — which will bear the Carbonell label and are rumored to include an olive oil mixed with an omega 3‑DHA — would be launched in January. A Deoleo spokesman said last week that despite the prod­ucts not yet being released there had been no change of plan. The launch will take place in due course,” he said.

Fidelity buys into Deoleo

Ebro Foods Deoleo also said in a notice on December 31 to the CNMV, the agency over­see­ing the Spanish stock mar­ket, that it had received res­ig­na­tion let­ters from two mem­bers of its board, pro­pri­etary direc­tors Antonio Hernández Callejas and José Barreiro Seoane, cit­ing pro­fes­sional rea­sons. Hernández is the chair­man and Barreiro a pre­vi­ous vice chair­man of the board of rice giant Ebro Foods, which holds a 9.3 per­cent stake of Deoleo. About three years ago, the for­mer Spanish food group SOS sold its rice divi­sion to Ebro Foods before renam­ing itself Deoleo.

There was some spec­u­la­tion by stock mar­ket com­men­ta­tors that the res­ig­na­tions were a fore­run­ner to Ebro reduc­ing its stake in Deoleo, which last year com­mis­sioned J.P. Morgan, to advise, among other things, on a finan­cial restruc­ture in order to improve its long-term finan­cial sta­bil­ity. On January 29, United Kingdom-based Fidelity International Ltd bought in with a 1 per­cent stake and Ebro is said to have recently sold nearly the equiv­a­lent.

European Commission asked to inter­vene over Deoleo staff, plant cuts

Meanwhile, Italian Member of the European Parliament Pier Antonio Panzeri (Socialists and Democrats) has raised con­cerns about Deoleo’s ongo­ing restruc­ture and debt reduc­tion mea­sures, which he said have already seen a major reduc­tion to its work­force and num­ber of plants in Italy and Spain despite Deoleo hold­ing a dom­i­nant posi­tion in most olive oil mar­kets around the globe.

Noting first that the olive oil sec­tor is a cor­ner­stone of the Italian and Spanish food indus­try, Panzeri said the company’s changes could have a very adverse impact on the food indus­try in the Mediterranean area, in par­tic­u­lar the Italian food indus­try.”

In an as yet unan­swered writ­ten ques­tion to the European Commission, Panzeri called for the Commission to con­vene talks with the com­pany and unions to address the sit­u­a­tion.


Advertisement
Advertisement

Related Articles