In the first quarter of 2017, the Fromageries Bel Group generated consolidated sales of €822 million, up 12.4% over the prior-year period.
Excluding the negative 0.5% impact from foreign exchange fluctuations and the positive impact of consolidating Mont-Blanc Materne (MOM), a company acquired in December 2016, consolidated sales declined 1.2% organically in Q1 2017.
The sales performance is presented by geographical region in the following table:
First-quarter financial information
Sales advance 12.4% in Q1 2017
In Europe, volume growth slowed in the first quarter as a result of fierce competition among food retailers, particularly against a backdrop of a sharp increase in milk and dairy raw material prices. Excluding the impact from changes in the consolidation scope, sales in Europe grew 1.0% during the period.
Markets in the Middle East and Greater Africa region, affected by unrest in Syria, Iraq, Yemen, Libya, and other countries, continued to suffer from supply issues and lower consumer purchasing power. Sales in the region declined markedly in the first quarter of the year, and the region was further negatively impacted by the depreciation of the Egyptian pound.
The Americas, Asia-Pacific region reported a strong performance with sales advancing 5.6%, excluding the MOM acquisition. The most buoyant markets were in Asia, where double-digit sales growth was achieved in Q1 2017.
Outlook for 2017
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 sharp rise in milk and dairy raw material prices observed in world markets since the end of 2016 will weigh on operating margin in 2017. In addition, economic conditions have durably eroded in regions affected by armed conflict, negatively impacting sales in the Middle East and Greater Africa region in particular. Lastly, unbridled competition among food retailers in both Europe and North America continues to hamper the deployment of promotional campaign plans for the Group’s brands.
In this environment, the Group will focus in particular on future projects in the healthy snack market, following the consolidation of its latest acquisitions, Safilait and MOM. Further, Bel will continue efforts to improve industrial productivity and to tightly manage resources, while following its aggressive strategy for advancing its global positions by building on the vitality of its brands and the talent of its teams.
This press release 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.