Naturex's (Avignon, France) consolidated revenue for fiscal 2013 was €320.8 million, up 9.7% at constant exchange rates.
Growth was mainly organic (more than 8% at constant exchange rates) and covered all geographic regions and market segments; it was relatively weak for food and beverage in Europe due to the economic environment, although nutrition and health in the United States and for toll manufacturing was robust.
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- Sales up 9.7% (at constant exchange rates)
- Recurring EBITDA margin: 16.5%
- Current operating margin: 11%
- Consolidated revenue for fiscal 2013 amounted to €320.8 million, up 9.7% at constant exchange rates. Impacted by the significant depreciation of several currencies versus the euro, including the US and Australian dollars and selected emerging country currencies (Brazil, Mexico, China, Russia, India, etc.), sales at current exchange rates rose 7%. Growth was mainly organic (more than 8% at constant exchange rates) and covered all geographic regions and market segments; sales were relatively weak for Food & Beverage in Europe due to the economic environment, it was in contrast very robust for Nutrition & Health in the United States and for Toll Manufacturing. Also noteworthy were the excellent performances by DBS (United States, +50% sales growth), the successful integration of Valentine (India) acquired in April 2012, and rapid development in Asia (+35%).
- Naturex's operating performances remained on track despite the impact of unfavorable foreign exchange trends. These trends significantly impacted results at two levels: The weakness of several currencies in relation to the euro weighed on the margins of Naturex as an exporter of many products from the euro zone and Switzerland. Translation differences for certain currencies limited earnings contributions from international operations in the latter part of the year. Furthermore, group restructuring measures rendered necessary by a more than threefold increase in sales in four years contributed to growth in recurring EBITDA that reached €53 million (+3.8%), marginally outpaced by sales (+7.0%). Current operating income came to €35.3 million or 11% of sales. Net operating income and net income in 2012 were increased by a sizable insurance payment (€6.1 million), following the death of Mr. Jacques Dikansky. Restated to eliminate this item, net operating income rose 9.5%.
- Breakdown of results: consolidated gross margin amounted to €196 million, up 11.6% from 2012, outpacing growth in sales reflecting a favorable shift in the product mix and in particular increase contributions from Toll manufacturing. As a percentage of sales, the gross margin improved on that basis by 2.6 points to 61.1%. Staff costs rose (+18.5%) in response to the full year integration of companies acquired in 2012 (DBS - United States and Valentine - India), the impact of Group restructuring measures (1.3% of sales) and revenue growth, in particular for Toll manufacturing activities. External charges increased (+12.0%) in response to growth in sales, reinforced research and the headquarters' extension. Recurring EBITDA amounted to €53 million, up from €51.1 million in 2012 or 3.8% with a recurring EBITDA margin at 16.5%. Current operating income, remained largely stable in relation to the prior year at €35.3 million representing a current operating margin of 11.0% compared to 12.0% in 2012, and in line with results for the first three quarters of the year. Consolidated operating profit totaled €34.5 million compared to €37.6 million in 2012 for an operating margin of 10.7% versus 12.5% in 2012. This result includes other non-current operating expenses of €0.8 million, up from €4.4 million one year earlier, mainly reflecting: €0.3 million in restructuring costs for Pektowin, significantly down from 2012; €0.3 million in acquisition-related expenses including mainly acquisition costs expensed in accordance with Revised IFRS 3. This amount includes primarily costs corresponding to the acquisition of Natraceutical Industrial SL, the owner of property assets of the Valencia site rented by Naturex since it acquired the Ingredients Division from Natraceutical in December 2009.
- Naturex had €6.1 million in non-current operating income corresponding to insurance benefit payments on the policy taken out by the group following Mr. Jacques Dikansky's death. Excluding this exceptional income in 2012, operating profit in 2013 would be up 9.5%. Net borrowing costs for 2013 amounted to €5.4 million, up from €5.1 million (1.7% of sales) in the prior year. Other financial income and expenses represented a net charge of €3.1 million reflecting mainly translation differences linked to a €4.3 million foreign exchange loss on intra-group balances plus non-group foreign exchange gains of €1.2 million.
- Net income attributable to the group amounted to €16.8 million, up from €22.9 million in 2012, after a tax charge of €9.0 million or a rate of 35% compared with €8.7 million in 2012 and a rate of 27.6%. This increased tax rate is mainly due to the higher U.S. contribution to earnings linked to the strong revenue growth and integration of DBS. It is furthermore noted that the rate for 2012 was exceptionally low.
- At 31 December 2013, net financial debt amounted to €150.7 million compared with €116.9 million at the end of 2012 and represented 55% of equity. This debt consists mainly of bank financing including the debt component of the OCEANE convertible bond issue (€16.4 million) of early 2013, amounts owed to Natraceutical from the Natraceutical Industrial SL acquisition (€8.6 million) and obligations relating to put options (€4 million) written on non-controlling interests of DBS and Chile Botanics. Outlook readers are reminded that Naturex does not disclose quantitative forecasts.
- The group is confident in its ability to achieve significant organic growth at constant exchange rates in 2014. A portion of revenue will no longer be included in consolidated revenue following the transfer of a portion of krill extraction sales for AKER BioMarine (opening of the Houston plant in connection with the joint venture created2) that will limit effective sales growth. Trends for quarterly sales will differ from those experienced in 2013 that was atypical, resulting in an unfavorable comparison base for the beginning of the year. In effect, 2013 registered strong sales for Svetol in the 1st half in response to extensive media coverage and Toll Manufacturing sales were very robust in the 1st quarter and will remain very sustained in 2014 as from the 2nd quarter.
- Major new projects in progress will gradually generate revenue over the year. Naturex, that completed a new acquisition at the end of 2013 by a majority stake in Chile Botanics, intends to pursue its strategy of targeted external growth. Details on this strategy will be presented at the analysts meeting of April 2. "In 2013, within a difficult macroeconomic environment, Naturex was successful in delivering satisfactory results while completing restructuring and managerial reorganization measures necessary for its future development", commented Thierry Lambert, Naturex CEO. "2014 will be a new year of growth and our objective will be to continue to balance sustainable organic growth with targeted and complementary acquisitions, dual drivers that have underpinned Naturex's business model for many years."