The Iglo Group, headquartered in Feltham, England, on February 26 reported a 1.9% drop in net sales during 2014. This was mainly due to declines in two major markets, the United Kingdom and Germany. However the company, whose iconic frozen food brands include Birds Eye (in the UK) and Findus (in Italy) as well as Iglo (in Germany, Austria, Holland and other countries), scored positively on a constant currency basis in eight of 12 European markets, highlighted by a 2.1% gain in Italy.
A key factor in the performance of Findus’ Italian business has been the successful launch of innovative products, notably in the seafood and pyramid meals categories. Meanwhile, the company’s cash conversion level of 90% over the past 12 months has enabled it to reduce net debt by €100 million.
In the second quarter of 2014 the company launched the Inspirations platform, which included the introduction of fish and chicken items as well as the migration of existing premium range products, under the Birds Eye brand in the UK. Inspirations continued to gain momentum throughout the year, ringing up retail sales of €60 million.
“Against a backdrop of difficult economic and tough retail conditions across Europe [where the frozen food category declined by 0.5% last year], our Better Meals Together strategy is starting to deliver some positive results. We have started to build momentum in a number of markets…driven by our new innovative platforms, such as Steamfresh,” said Iglo Group CEO Elio Leoni Sceti. “Italy, where we launched our strategy first, has now delivered five successive quarters of net sales growth.”
CEO Elio Leoni Sceti reports that a cash conversion level of 90% over the past 12 months has enabled the Iglo Group to reduce net debt by €100 million year on year.Total sales in 2014 amounted to €1.466 billion. Compared with 2013, Iglo brand sales fell by 2.81%to €521.9 million, while Birds Eye revenues were relatively flat at €5.1.7 million. Findus Italy achieved turnover of €428.2 million.
“Despite a disappointing decline in overall sales, we have been able to boost new product development, expand our gross margin by 180 basis points and invest in our strategy, launching new innovation platforms and increasing advertising and promotions spending to support our Food of Life media campaign,” said Leoni Sceti.
The new Steamfresh platform was a key launch in the UK and Austrian markets during the third quarter. Steamfresh combines well known existing ranges, such as Rice and Vegetable Fusions, with newly launched products, including pasta-based dishes and vegetable mixes. The range has been well received with retail sales value amounting to €35 million in the UK.
The fourth quarter saw rollouts of the Stir Your Senses adult meals platform in Germany and the Netherlands. The range of pan-cooked meals, inspired by cuisines from around the world, can be prepared in less than 10 minutes. Sales have been encouraging to date, with the launch in the UK during the first quarter expected to add momentum.
Forecasting that business conditions will continue to be tough in 2015, Leoni Sceti nonetheless remained positive, stating: “The innovations which we are bringing to market, as well as our focus on growing gross margin, position us well to overcome these challenges. In the UK, our new Inspirations platform has been judged by Kantar to be the biggest FMCG product launch of 2014, reflecting the success of our big initiatives. We are focused on building a nimbler and more competitive business and the momentum that we have established will continue to help mitigate the effects of the overall economic environment.”
Perhaps a look at 2014 fourth quarter numbers may be useful in predicting where the market is headed in early 2015. Birds Eye brand sales reportedly slipped a tad to €119.6 million from €120.3 million in the like period of 2013. In Germany, where turnover was €80.5 million, the slide was 5.07%.
