RESULTS 9M 2024
CONTENTS
- INTRODUCTION
- BUSINESS UNIT RESULTS 9M24
- Rice
- Pasta
- CONSOLIDATED GROUP RESULTS 9M24
- P&L
- Debt Performance
- CONCLUSION
- CORPORATE CALENDAR 2024
- CALCULATION OF ALTERNATIVE PERFORMANCE MEASURES
- LEGAL DISCLAIMER
1. Introduction
Both divisions delivered excellent results for the first nine months of the year, marking our strongest Q3 performance in the past three years.
In Spain, the rice harvest has rebounded following three particularly challenging years, with Extremadura reaching 100% and Andalusia 70%. This recovery will allow us to better leverage our local installed capacity in 2025.
The rice season is progressing well, with strong harvest volumes across all countries. However, in parts of the US and Italy, rainfall during harvest has impacted quality and subsequently industrial yields.
Prices of Asian rice varieties are falling, but freight costs to Europe and North America remain high due to the ongoing conflict in the Red Sea. The time lag between the production and consumption of aromatic rice is another factor preventing these lower prices from reaching consumers.
The fresh pasta business continues to show strong growth.
The Garofalo business has performed extremely well.
The sale of the dry warehouses in northern France was completed during Q3 for EUR23.5 million.
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2.1.1 Rice 9M24
The rice division experienced robust growth during the first nine months of the year.
Looking at the raw materials markets, we anticipate an excellent long-grain rice harvest in Spain, though this will reduce the Group's competitive edge due to its strategic global position. The European Union's tariff policy for EBA countries has led farmers to push for safeguarding measures to protect local production. The US harvest arrived slightly ahead of schedule, which is resulting in some price decreases.
Sales continue to rise across most of our markets. All Herba brands recorded growth, although this was not enough to fully counterbalance the increased costs of short-grain and parboiled rice in the previous campaign. The frozen goods group continues to deliver outstanding results, alongside the United Kingdom, India and Thailand businesses.
The rice business in France performed particularly well, with an 8% increase in sales.
Riviana posted healthy sales, particularly for the Mahatma and Carolina brands. Microwave products are also performing well globally, although growth in the US is slowing due to delays in the capacity expansion work in Memphis, which is also experiencing cost overruns from increased imports.
Tilda sales are rising in all the countries where it operates, including the United Kingdom, Australia and the Middle East, etc. However, rising freight costs from India have prompted a shift towards bulk cargo shipping.
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2.1.2 Rice 9M24
Sales in the rice division increased to EUR1,837.5 million, thanks to higher volumes in most markets. In terms of CAGR 24/22, this figure is up by 3.5%.
We continue to step up advertising investment to support new launches for all our brands. Advertising was therefore up 11.4% to EUR45.2 million.
Ebitda-A grew 4% to EUR241.5 million; growing 6.4% in terms of CAGR 24/22. The exchange rate had almost no impact on this figure.
Operating profit grew 5.3% to EUR185.0 million.
EUR Thous. | 9M22 | 9M23 | 9M24 | 24/23 | CAGR 24/22 |
Sales | 1,714,060 | 1,828,907 | 1,837,455 | 0.5% | 3.5% |
Advertising | 38,547 | 40,587 | 45,213 | 11.4% | 8.3% |
Ebitda-A | 213,385 | 232,303 | 241,487 | 4.0% | 6.4% |
Ebitda-A Margin | 12.4% | 12.7% | 13.1% | - | - |
Ebit-A | 163,880 | 182,380 | 188,738 | 3.5% | 7.3% |
Operating Profit | 161,177 | 175,794 | 185,064 | 5.3% | 7.2% |
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2.2.1 Pasta 9M24
Our global fresh pasta business continues to perform very well, achieving double-digit growth driven by the strength of our core products and the success of new product launches.
The business has performed exceptionally well in France, bolstered by the successful launch of products such as Gnocchi Star, as well as weather conditions that encouraged greater pasta consumption, compared to the hotter summer of 2023.
In Canada, Olivieri continues to outperform the market, supported by the expanded capacity of our gnocchi factory.
Garofalo posted 16% growth worldwide, with strong performance in Italy, the US and the rest of Europe.
While the price of durum wheat semolina is expected to fall, a potentially poor harvest in Belgium could lead to rising potato prices.
Rising sales continue to drive strong results for the division.
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2.2.2 Pasta 9M24
Turnover grew 6.2% to EUR512.5 million, thanks to increased volumes.
Advertising grew 12% to EUR27.6 million, driven by new product launches.
The Division's Ebitda-A grew 27.2% to EUR79.4 million. The Ebitda-A margin grew by 2.6 p.p. The exchange rate had no impact on these results.
Operating Profit grew 93.2% to EUR67.4 million.
EUR Thous. | 9M22 | 9M23 | 9M24 | 24/23 | CAGR 24/22 |
Sales | 479,619 | 482,448 | 512,465 | 6.2% | 3.4% |
Advertising | 19,795 | 24,656 | 27,604 | 12.0% | 18.1% |
Ebitda-A | 41,278 | 62,427 | 79,379 | 27.2% | 38.7% |
Ebitda-A Margin | 8.6% | 12.9% | 15.5% | - | - |
Ebit-A | 16,391 | 38,057 | 53,864 | 41.5% | 81.3% |
Operating Profit | -5,459 | 34,867 | 67,354 | 93.2% |
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3.1 P&L 9M24
The consolidated sales figure grew by 1.7% to EUR2,346.8 million, thanks to the strong performance of our brands.
Ebitda-A grew by 8.3% to EUR308.0 million. The Ebitda-A margin grew to 13.1%, with improvements in both divisions. Currency had almost no impact on this result.
Net Profit* grew by 20.8% to EUR169.2 million.
ROCE-A continues to improve, rising by 2.2 p.p. vs 9M23 and 5 p.p. vs 9M22.
EUR Thous. | 9M22 | 9M23 | 9M24 | 24/23 | CAGR 24/22 |
Sales | 2,183,329 | 2,306,797 | 2,346,818 | 1.7% | 3.7% |
Advertising | 58,079 | 64,728 | 72,671 | 12.3% | 11.9% |
Ebitda-A | 244,896 | 284,366 | 308,023 | 8.3% | 12.2% |
Ebitda-A Margin | 11.2% | 12.3% | 13.1% | - | - |
Ebit-A | 169,228 | 208,835 | 228,552 | 9.4% | 16.2% |
Operating Profit | 145,438 | 204,076 | 239,831 | 17.5% | 28.4% |
Pre-tax Profit | 126,708 | 202,213 | 246,071 | 21.7% | 39.4% |
Net Profit* | 87,085 | 140,136 | 169,222 | 20.8% | 39.4% |
ROCE-A % | 9.1 | 11.9 | 14.1 | - | - |
*Net profit attributed to the parent company
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3.2 Debt Performance
We ended the first nine months of the year with Net Debt standing at EUR511.3 million, EUR59,0 million less than in December 2023. This figure includes the payment of annual dividends, which amounted to EUR114 million.
Working capital fell by EUR30 million compared to year-end 2023, due to reduced stocks.
We should note that the put options that we have with minority shareholders of certain businesses amount to EUR305 million, while debt recognised under IFRS 16 amounted to EUR56 million.
Corporate income tax in 9M 2024 stood at EUR44.6 million.
Capex investments during 9M amounted to a total of EUR100.7 million.
EUR Thous. | 30 Sep 22 | 31 Dec 22 | 30 Sep 23 | 31 Dec 23 | 30 Sep 24 | 24/23 | CAGR 24/22 | |
Net Debt | 712,008 | 762,635 | 588,217 | 570,404 | 511,380 | -13.1% | -15.3% | |
Average net debt | 652,920 | 645,809 | 707,358 | 831,747 | 530,755 | -25.0% | -9.8% | |
Equity | 2,239,017 | 2,164,438 | 2,229,075 | 2,185,159 | 2,220,105 | -0.4% | -0.4% | |
ND Leverage | 31.8% | 35.2% | 26.4% | 26.1% | 23.0% | -12.7% | -14.9% | |
AND Leverage | 29.2% | 29.8% | 31.7% | 38.1% | 23.9% | -24.7% | -9.5% | |
x Ebitda-A (ND) | 2.28 | 1.47 | ||||||
x Ebitda-A (AND) | 1.93 | 2.15 |
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4. Conclusion
The first nine months of 2024 close with Ebitda-A standing at EUR308.0 million, marking a double-digit increase in CAGR over the last three years.
Both divisions are posting improved returns, with a notable turnaround in the pasta division.
Rising freight costs from certain regions are likely to result in higher working capital at the end of the year, as we will need to revert to full-ship deliveries for rice supplies.
We expect Ebitda-a to reach EUR402-407 million by year-end, which would represent an excellent outcome for the Group.
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