Total Produce reports a higher turnover and EBITA over the first six months of this year than in the same period last year. The higher result is largely thanks to takeovers in the past 18 months.
Turnover amounted to 2.19 billion euro, an increase of 1.8% compared to 2017 (2.15 billion euro). The ETIBA increased by 7.3% to 45.6 million euro (2017: 42.5 million euro). The growth in results is thanks to recent takeovers, although these positive effects were partially tempered by fluctuations in the exchange rate. The weaker dollar and Swedish krona in particular can be seen in the results. Without the exchange rate effects, growth figures amount to 5.6% for turnover and 11.7% for EBITA.
In addition to the exchange rate, the unusual weather in Europe also influenced trade. On comparable basis, turnover is in line with last year, showing a slight increase in volume and a slight decrease of average prices. The larger volumes on the American market compensated for the decline on the European market.
Euro zone: challenging market
Turnover of this part of the company decreased by 3.2% and amounted to 874 million euro (2017: 903 million euro). The corrected EBITA increased by 8.2% to 14.9 million euro (2017: 13.8 million euro). This company part includes activities in France, Ireland, Italy, the Netherlands and Spain. “In general, trade conditions were challenging in some countries due to the unusual weather,” according to the press release. However, that effect was partly compensated by the good performances in Southern Europe. Without the influence of takeovers and disinvestments, turnover on comparable basis was 2% behind on the performances in the year before.
Europe, not Euro zone: exchange rate felt
The Czech Republic, Poland, Scandinavia and the UK are the countries represented in this part of the company. In these countries, turnover decreased by 2.4% to 781 million euro (2017: 800 million euro). The corrected EBITA decreased by 3.3% to 21.4 million euro (2017: 22.1 million euro). This is mostly caused by the exchange rates, and particularly those of the Swedish krona and pound sterling that both decreased in value. The Swedish krona lost 5.9%, and the pound sterling lost 2% of their value. The effect of the unusual weather in Europe comes on top of that.
International: growth thanks to takeovers
This division includes activities in North America and India. Turnover increased by 18% to 556 million euro (2017: 471 million euro). For the corrected EBITA, a growth of 40.8% to 9.3 million euro is reported (2017: 6.6 million euro). This result profits from recent takeovers. On 1 March 2017, Total Produce acquired another 30% of Oppy shares. Because of this, Total Produce now owns 65% of Oppy, and the company became a subsidiary. Besides, the takeover of The Fresh Connection in October 2017 contributed to the higher turnover.
This growth was partially negated by the weaker American and Canadian dollar of about 11.5% and 7% respectively. On comparable basis, turnover increased by 6% thanks to a larger volume against a slight price decrease. For example, more potatoes and asparagus were available, which came with a price decrease. For soft fruit, volumes dropped, which led to a price increase. In the previous period, the market for soft fruit was flooded with large volumes, and prices were under pressure. Finally, Oppy had to pay start-up costs for a new soft fruit partnership.
Takeover Dole
The takeover of Dole was wrapped up in the first half of this year. In July, the European Commission approved the takeover. To finance the purchase, 63 million shares were issued on 1 February, resulting in 180 million dollar. In total, Total Produce spent 2.3 million dollar in takeover costs in the first six months of this year. Dole’s results will be reflected in figures from 2019.