Naturex's (Avignon, France) first-quarter net operating income fell 14% to €8.4 million and revenue fell 4.3% to €79.6 million, mainly due to mainly due to tough comparisons with a year earlier, amplified by exceptional performances in the 2013 first quarter for Svetol and krill extraction sales for AKER BioMarine.
Click here to view the full earnings release or view the text below.
Organic growth at a good level excluding exceptional impacts in Q1 2013
As announced in April of this year, 2014 first-quarter sales came to €79.6 million, with a - 2.1% change at constant exchange rates, mainly in response to an unfavorable comparison base, amplified by exceptional performances in the 2013 first quarter for Svetol and krill extraction sales for AKER BioMarine. Restated to adjust for Svetol and krill extraction sales, quarterly revenue achieved organic growth of 6.2% at constant exchange rates. The 2.2% negative currency effect for the period highlights a continuing adverse exchange rate environment not only for the US dollar but also most emerging country currencies. The 1.9 point increase in the gross margin as a percentage of sales to 62.1% reflects the actions taken within the Group to increase productivity gains, confirming the positive upward momentum of the last quarters of 2013.
Operating indicators in line with structural adjustments
The restructuring and organizational adjustments implemented over the last 18 months have begun to make significant contributions to operating performances in the 2014 first quarter and even though, reflecting our international dimension, the underlying foreign exchange environment remains unfavorable:
- Current operating income amounted to €8.7 million due to lower sales than in the 2013 first quarter. This was however accompanied by an operating margin that stood at 10.9% in line with the level of margin recorded in 2013.This result takes into account a marginal increase in staff costs linked to the end of the recruitment program pursued since the 2012 second half as well as efficient control over external charges in light of, on the one hand, lower sales and on the other hand, cost management efforts at the level of operational departments.
- The recurring EBITDA margin came to 16.6%, in line with the level in 2013 despite the currency effects.
- Consolidated operating profit totaled €8.5 million compared to €9.8 million in the 2013 first quarter for an operating margin of 10.7%. This includes €0.2 million in non-current operating expenses compared with €0.3 million one year earlier, relating mainly to acquisition-related expenses (Revised IFRS 3) and residual restructuring expenses from Pektowin in Poland.
Net income attributable to the Group amounted to €5.1 million compared to €6.7 million in the 2013 first quarter after a €2.3 million tax charge compared with €3.2 million one year earlier.
"This encouraging start to the year for Naturex highlights the first positive contributions of actions taken both on the quality of our organic growth and our main operating indicators", commented Naturex's CEO, Thierry Lambert. "Our continuing efforts in each of the areas where Naturex excels (sourcing, manufacturing, research and development, sales network), as well as synergies from the acquisition of Vegetable Juices Inc. will allow us to fine-tune our organization in order to maximize our growth and optimize operating profitability over the medium-term."