The continued decline in strength of the US dollar against the euro, as well as the economic turbulence in Germany and the Middle East, took its toll on full-year results at French cheese group Fromageries Bel.
The company reported sales of €1.70 billion for 2002, compared to €1.74 billion in 2001, although at constant exchange rates, and excluding the disposal of its soft ripened cheese division, sales would have been 1 per cent higher.
The sale of the soft cheese arm, and the decision to focus on its processed and semi-hard cheese arms, meant that exceptional profits for the year were considerably higher than in 2001, rising from €3 million to €23 million.
EBITDA for the year was up 8.2 per cent to €139 million, while operating profit rose slightly to €88 million. Profit from ongoing business was also ahead of the 2001 level at €96 million (€94 million in the previous year). Net profits rose from €51 million to €53 million.
Although the company saw improvements in both its productivity levels and raw material prices, these were all but wiped out by the poor market conditions in a number of countries and the decline of the dollar.
This year will see the consolidation of the Leerdammer Group for the fist time after Bel completed the acquisition of the Dutch hard cheese producer from Wessanen at the end of 2002. Leerdammer is the leader in its market segment, and will give Bel an increased market share in Germany, Italy and France.
Leerdammer's 2002 sales reached €292 million, while operating profits were €8 million.
As well as the boost from Leerdammer, Bel expects sales and profits to be lifted this year by its policy of developing it international brands in France, Europe and worldwide, as well as further improvement in competitiveness.
But these gains are likely to be offset by the impact of a general slowdown in the global economy, a further depreciation of the dollar and by the continued uncertainty in the Middle East.