Savencia publishes annual results

By Jim Cornall contact

- Last updated on GMT

Pic: Getty Images/allanswart
Pic: Getty Images/allanswart

Related tags: Dairy

At €5.61bn ($6.16bn), sales of the Savencia Fromage & Dairy Group for 2021 grew by 8.7%.

This change was mainly the result of 7.3% organic growth, a 2.3% structural effect resulting from the integration of CF&R as of May 2020, less a 1.0% negative forex effect.

The €246.1m ($270.2m) current operating profit for 2021 grew by 16.4%. This benefited from a high-level stability in home consumption in nearly all the world markets and a strong recovery in food away from home, following 2020 that was penalized by lockdowns and health protection measures.

At 4.4%, the group's current operating margin grew by 0.3%. The margin of Other Dairy Products, benefiting from the world industrial prices has improved by 1.5% to 5.0%. The Cheese Products margin contracted by 0.7% to 4.5%, penalized in the second semester by the start of an inflationary cycle.

Operating profit totaled €173m ($190m), or 3.1% of sales, a growth of 10.6%. It was impacted by asset depreciations in Russia and in infant formula, and also by the consequences of flooding in Belgium last July.

Net financial income decreased by €2.9m ($3.2m). This was the result of foreign exchange losses exceeding the decreases in commissions and financing rates.

Group net profit was €82.9m ($91m), or 1.5% of sales. The financial structure remained well in control, with a decrease in the net debt ratio (excl. IFRS 16) to 25.1% equity, from 28.7% in 2020.

The board of directors will propose to the annual shareholders’ meeting on April 21 the distribution of a dividend of €1.50 ($1.65) per share.

The company said the international crisis developing in eastern Europe will significantly increase inflationary tensions and the risks of shortages that have appeared since the end of 2021. This environment should impact performance, the company said.

Savencia said the safety of its 500 Ukrainian employees and their families, and that of its dairy farming partners are the primary concern.

"We are in permanent contact with our teams and are monitoring, in real time, developments on the ground, in order to bring them help as best possible. Support measures include the advance payment of three months' salary and the provision of products for the local community next to the cheese plant," ​the company said.

"To help feed the local population, the milk collection and cheese production have been partially maintained, and we salute the teams’ great courage. Our subsidiaries are mobilized to welcome refugees in the countries where the Group is present, in order to provide shelter and work to those who arrive, particularly in Poland, Romania, Hungary and Slovakia. In addition, our employees are mobilising to provide support
to humanitarian organisations on the ground.

"In Russia, we continue our milk collection, cheese production and distribution activities as they are essential to feeding the population.
We are closely monitoring the situation and shall respect all measures taken by the French authorities."

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