Bel Group Increases Profits as Revenue Remains Flat
French and international cheese manufacturer Bel Group has recorded a slight 0.4% decrease in sales to €2.936 billion for 2016 as operating income advanced 9.5% to €298 million with the operating margin exceeding 10%. The Americas, Asia-Pacific region continued to grow, reporting organic sales growth of 4.5%. A price war among food retailers in Europe and France in particular directly impacted producer sales, with Bel’s sales in the region contracting 2.1% organically during the year. Volumes in the Middle East, Greater Africa were negatively affected by unrest in several markets in the region, where sales declined 2.3% organically in 2016.
The group nevertheless confirmed its ability to support and develop its strong brands to grow market share and win new markets, while consolidating its operating margin. Helped by a generally favorable foreign exchange impact and bottom-of-the-cycle raw material prices throughout much of the year, operating income advanced 9.5% in 2016. In 2016, consolidated net profit totalled €213 million, versus €184 million in 2015.
In Europe, markets remain affected by fierce competition among food retailers that is unfavourable to rolling out campaign plans for Bel’s brands. The uncertain geopolitical and economic environment in numerous world regions continues to cloud visibility. Further, the new hike in dairy raw material prices announced at the end of 2016 is expected to weigh on operating margin in 2017.
Bel Group will focus in particular on its future projects in the healthy snack market, following the consolidation of its latest acquisitions, Safilait and MOM.
