Consolidated operating income fell nearly 20% versus the first half of 2016. The Group’s operating margin was mainly negatively impacted by the sharp downturn in volumes in the Middle East and Greater Africa. After taking into account net financial result and income tax expense, consolidated net profit, Group share,
totaled €85 million, versus €111 million at June 30, 2016.
On April 18, 2017, the Group successfully completed a €500-million bond placement with a coupon of 1.50% and maturing in April 2024. The proceeds from the issue are earmarked to cover Fromageries Bel’s general needs and potentially to refinance a share of existing debt. The issue will also extend the average maturity of
the company’s financing and further diversifies Bel’s funding sources.
The Group’s balance sheet remained strong at June 30, 2017, with net financial debt amounting to €747 million, versus €688 million at December 31, 2016. Apart from the dividend payout, the rise in debt in HI 2017 primarily reflects the seasonal nature of working capital requirement, particularly for inventories, which are traditionally higher in the middle of the year.
1. OUTLOOK FOR 2017
Raw material prices, particularly butter fat raw material prices, are expected to rise in the markets. Further, the Group will continue to confront a tough economic environment with little visibility over the trend in its activity. Against this backdrop, the Group expects operating margin to be lower in the second half of the year
versus the prior year period.
The Group will continue its efforts to improve industrial productivity and to tightly manage resources, while following its strategy to develop in the healthy snack space by building on the vitality of its brands and the talent of its teams.
2. MAIN RELATED-PARTY RELATIONSHIPS
Main related-party relationships are disclosed in note 8 of the summary consolidated financial statements for the half-year.
3. SIGNIFICANT SUBSEQUENT EVENTS
On July 1, 2017, the Group’s subsidiary, Fromageries Bel Production France, sold its Cléry-le-Petit plant in France’s Meuse department to U.S.-based Schreiber Foods. The Cléry-le-Petit production site notably makes pressed cheese marketed under the Cousteron and Port-Salut brands. As part of the deal to transfer the site and all of its personnel, the Group signed a subcontracting agreement with Schreiber Foods to continue the production and supply of those products.
This report may contain forward-looking statements. Such trend and/or target information should in no way be regarded as earnings forecast data or performance indicators of any kind. This information is by nature subject to risks and uncertainties that may be beyond the Company’s control. A detailed description of these risks and uncertainties is provided in the Company’s Registration
Document, available at (www.groupe-bel.com). More comprehensive information about the Bel Group can be found in the “Regulatory Information” section of the www.groupe-bel.comwebsite.