Bonduelle Stockholders to Receive Higher Dividend

The Villeneuve d’Ascq, France-headquartered Bonduelle Group, a producer of value-added vegetable products, announced on September 29 that it would recommend a dividend distribution of EUR 0.43 per share at the next stockholders’ meeting on December 3. The equates to an increase of 15% over the dividend paid for the 2013-14 fiscal year.

The announcement follows Bonduelle executive board’s August 4 report of “strong turnover growth” in fiscal 2014-15 (July 1-June 30), as sales were tallied at EUR 1,981.8 million compared to the EUR 1,921.1 million generated in the previous year. The positive performance was achieved notwithstanding what was described as “a rather demanding environment” marked by “sluggish consumption and concentration of distribution in Europe,” a fire at the company’s Tecumseh plant in Canada during the middle of the harvest season, the Russian embargo and the ruble devaluation.

The bottom line was +4.1% at constant exchange rates, higher than the annual objective revised upward in February to 2 to 3% at constant rates. After taking into account the adverse impact of currencies (EUR -17.5 million and - 0.9%, mainly related to a 20% devaluation of the Russian ruble), the Group realized a growth rate of + 3.2% on published figures.

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Bonduelle has thus racked up four consecutive quarters of growth, as previously reported by FrozenFoodsBiz.com. The increase during the last quarter was + 2.2% on a like-for-like basis, and +3.8% for all operating segments (canned, frozen and fresh processed) combined during the fiscal year. Sales in the frozen sector posted a 6.5% gain at EUR 561.9 million, while the canned vegetable turnover dipped a marginal -0.1% to EUR 1,023.6 million. The fresh processed segment advanced +7.6% to EUR 396.3 million.

The Group’s net debt stood at EUR 512.4 million at the end of the fiscal year, compared with EUR 524.6 million the year before. The reduction was achieved despite a EUR 30 million fine levied by the European Commission and the EUR 22 million buyout of redeemable equity warrants.

A synopsis of results and major activities by regional operations follows.

Europe Zone
Turnover in the Europe zone (65% of the total receipts) was stabile both on a published and constant basis, according to the company. This stability, however, masked the strong sales of Bonduelle and Cassegrain branded products in all operating segments. This was driven by the broadening of the Cassegrain range, sustainable development of a steamed products line, renewal of retail frozen offerings, and success of snack items in the delicatessen segment notably, and by reinforcement of the presence of the Group in the media.
Some voluntary volume declines occurred in the canned private label segment as a result of unsatisfactory price levels. That, coupled with a difficult foodservice segment for the frozen category, explains the overall development of the Europe market.

Non-Europe Zone
Despite adverse exchange rate movements, the Non-Europe zone (accounting for 35% of the total turnover) reported a published growth of + 9.4% and a +12.5% gain at constant exchange rates in line with past performances.

In North America Bonduelle continued to consolidate its position in Canada’s improved market environment, while also expanding frozen retail and foodservice sales in the USA. Investments and productivity gains at plants purchased in 2012, coupled with the acquisition of the Lethbridge facility, support the volume growth and the continued market share gains.

In Eastern Europe, the group again recorded robust turnover growth.

Activity in Russia has not suffered from embargo measures and the ruble devaluation, as most of the vegetables sold in that market are produced domestically. This underscores the wisdom of setting up a local production plant in 2004, which was reinforced by external growth in 2012.

Activity in Ukraine, where Bonduelle has only a commercial presence, obviously impacted by the geopolitical context, is not significant.

In Brazil, where less than 2% of the Group’s turnover is generated, Bonduelle continued to register business growth despite a substantial slowdown in consumption and price levels remaining low.