Profits rise for Food Union Group
The Baltics-based company saw sales of €294m ($350.6m), representing 6% growth compared to 2019. Group EBITDA grew by more than a half reaching €46m ($54.9m), and profits quadrupled from €2m ($2.4m) to €8m ($9.5m).
The company said the result was underpinned by a focused ‘home advantage’ market strategy igniting strong local brands with innovation. It was further solidified by investments in production capacity, automatization and digitization in 2019.
Normunds Staņēvičs, CEO of Food Union Europe, said, “We are delighted to have achieved a record set of results in 2020. Food Union companies launched a total of 117 novelty ice cream products, many of which became the best performing products in local markets. Consumers across our markets discovered exclusive flavors, textures, and functional benefits, and these novelties unlocked a spectrum of local taste preferences, and, most importantly, offered a great deal of comfort, joy, and normality during the time of lockdowns.
“We look forward to the future with confidence. We have a well-invested business with further capital investment plans, continued new product development and a strong leadership team across Europe. We look forward to updating all stakeholders on our continuing progress over the coming year.”
Staņēvičs said the company increased exports to Hong Kong, Taiwan and Singapore, with total exports rising from near-zero at the beginning of 2020 to more than €2m in sales by the end of 2020, while exploring other growth opportunities in South East Asia.
With the world spending more time at home, Food Union said it saw an opportunity to invest in agile market environments with strong e-commerce potential. It expanded and improved its door-step-delivery services in Denmark and Norway, to be closer to the customer and to create a more intuitive consumer experience.
The company expanded doorstep-delivery routes and optimized stop accuracy and consumer interaction. This led to increase in ice cream consumption, 300,000 subscribers, and a 50% gain in new customers.
As well as enhancing doorstep-delivery services in Northern Europe, the group invested in new and consumer friendly e-shops in Latvia, Lithuania, Romania and Hong Kong.
The company also invested €2.7m ($3.2m) in truck upgrades, which equates to a reduction of 112 tons of CO2 per annum, and initiated a €9.1m ($10.9m) CAPEX program, including the Dairy Excellence Centre in Riga.