Natural demand means ongoing growth for Naturex

21-Oct-2009 - Last updated on 22-Oct-2009 at 09:04 GMT

Naturex is expecting the natural trend to deliver a slight increase in revenues this year, and a substantial improvement in operating margin, despite a macroeconomic environment that is still sluggish.

The French natural extracts supplier has posted 10.2 per cent growth in revenues for Q3 2009, amounting to €77.3m – or 2.1 per cent in constant currencies.

The food industry, one of Naturex’s main markets, has seen some measure of protection in the economic slowdown compared to non-essential consumer goods industries. Within that, there is a massive ongoing trend for natural products and ingredients, and those deemed healthy.

Naturex has been preparing to take even more advantage of the opportunities this poses: At the end of last month it signed the final agreement on integrating of Natraceutical’s ingredients division into its operations, and expects to finalise the acquisition in the coming months. The acquisition plan will be presented for approval at the company’s extraordinary general meeting at the end of December.

The acquisition, valued at €110m, is expected to yield earnings of €28m before interest, tax and amortisation for the expanded group. It will create a botanicals powerhouse, and Natraceutical’s fruit and vegetable powders range, along with pectin, will make for completely new areas of operation for Naturex.

Nonetheless, the pace of revenue growth looks to have been slowing somewhat through the last three quarters. In Q1 it was 14.8 per cent or 5.2 per cent in constant currencies, in Q2 11.3 per cent or 2.2 per cent constant currencies, and in Q2 3.9 percent – which was actually a 1.4 per cent decrease in constant currencies.

The company said this week: “Based on figures to date, for 2009 as a whole and like-for-like, Naturex anticipates a slight increase in its annual revenues in constant currencies, and a substantial improvement in its operating margin.”

For full year 2008 the operating margin was 12.1 per cent.

Industry balance

Naturex’s nutrition and health business has accounted for the lion’s share of income this year so far, bringing in 64.1 per cent of revenues. Food and beverages have brought in 29.8 per cent, and personal care 1.4 per cent.