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Corbion Q2 slips as food ingredients continue poor performance

By Nathan Gray+

13-Aug-2014

“The Biobased Food Ingredients segment reported slightly lower volumes and sales in both Q1 and Q2, which also had a negative impact on EBITDA development,” said Corbion.
“The Biobased Food Ingredients segment reported slightly lower volumes and sales in both Q1 and Q2, which also had a negative impact on EBITDA development,” said Corbion.

Dutch ingredients supplier Corbion has reported a 0.9% drop in Q2 sales over the same period last year, after strong declines in the firms Biobased Food Ingredients business.

The biochemical and biobased foods supplier reported that net sales in the second quarter of 2014 decreased slightly compared to the same period in 2013 (0.9% decrease), mostly because of negative currency effects. However, Corbion noted that organic growth was positive at 1.1% as volume growth was 0.9% - most of which was driven by its Biochemicals segment which saw organic growth of 13.3%.

The firms much larger Biobased Food Ingredients segment declined organically by 2.2%, it said.

“The Biobased Food Ingredients segment reported slightly lower volumes and sales in both Q1 and Q2, which also had a negative impact on EBITDA development,” said Corbion in a press release. “These declines were also caused by negative translation effects as the US dollar weakened throughout H1 2014 versus H1 2013.”

Corbion added that the organic sales decline seen in its larger Biobased Food Ingredients segment “was more than offset by organic sales growth of 13.3% in the smaller Biochemicals market segment.”

Full year outlook

The Dutch supplier confirmed that it expects similar market circumstances for the remainder of the year.

“For the Biobased Food Ingredients segment we see some early signs of volume growth improvement, whereas in the Biochemicals segment the comparables versus last year for volume growth will become more challenging as the year progresses,” it said.

Food ingredients breakdown

Corbion noted that the largest market unit of its Biobased Food Ingredients business, Bakery, saw ‘little improvement’ over a weak start in Q1, as the volumes in Q2 continued to be slightly down compared to last year.

“The innovation portfolio, launched last year, has seen increased traction with customers towards the end of H1, even though the up-take earlier in the year was slower than forecast,” it said.

In Meat & Culinary, pressure on volumes in the US, the largest market region, continued in Q2, said Corbion.

“Most customers in the US continue to look for optimal meat preservation recipes per product line after the USDA allowed the usage of certain chemical meat preservative as an alternative to natural meat preservatives.”

“Our new low-cost-in-use alternatives are seeing good growth, but as these solutions require a significantly lower dosage than our core sodium lactate products the revenue and margin impact is evident,” it said.

Meanwhile, the ‘Foods’ market unit continued to perform well - especially in the beverages sector –and reported volume and organic sales growth in both Q1 and Q2.

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