we receive e we publish the following press release issued by Newlat Food.
The Board of Directors of Newlat Food SpA (“Newlat Food” or the “Company”), under the chairmanship of Angelo Mastrolia, has examined and approved the Half-Year Financial Report as of June 30, 2024.
Half-yearly financial report
In first semester 2024, Newlat Food has achieved an extraordinary level of margins and solid cash generation.
I revenues reach Euro 370,1 million, down 10,4% compared to Euro 413,3 million in the first half of 2023. The contraction is attributable to the strong deflationary effects observed in the first half of 2024 compared to the same period of the previous year.
THEEBITDA consolidated stands at Euro 39,3 million compared to Euro 38,5 million in the first half of 2023, with an increase in its margin on turnover, equal to 10,6%, compared to that recorded during the same period of the previous financial year (9,3% at 30 June 2023).
Il Operating income (EBIT) consolidated is equal to Euro 20,6 million, down compared to Euro 23 million in the first half of 2023.
Il consolidated net result is equal to Euro 10 million. Excluding the effects of the business combination income recorded in 2023, equal to Euro 1,7 million, the net result is up 11%.
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The President Angelo Mastrolia commented: “Despite the challenges posed by a highly competitive market and a comparison with a first half of 2023 characterized by an extraordinary growth of 19,3%, driven by an unprecedented inflationary context, Newlat Food demonstrated high resilience in the first half of 2024. Revenues stood at 370,1 million euros, recording a decrease of 10,4%, mainly attributable to a deflationary effect on average selling prices.
It is important to highlight, however, the significant improvement of our marginality: EBITDA stood at €39,3 million, with an EBITDA margin of 10,6%, up from 9,3% in the same period of the previous year. This result reflects our ability to effectively manage market pressures and optimize operating efficiency, improving our margins despite a complex macroeconomic environment.
The Acquisition of Princes Limited, completed on July 30, marks the beginning of a phase of strong expansion. We are determined to maximize the benefits of this integration through an ambitious strategic plan that, by the end of the year, aims to further strengthen our margins and improve our net financial position, supported by solid cash generation resulting from the strategies implemented since the beginning of the year.
We trust that the actions taken will continue to strengthen our competitive position, allowing us to pursue our growth and enhancement objectives.”
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Consolidated Revenue Analysis
In the first half of 2024, Newlat Food achieved consolidated revenues of Euro 370,1 million, as broken down below by business lines:
Revenues relating to the Pasta segment decreased in the period under review due to a combined effect of a reduction in the average sales price and a slight decrease in sales volumes in Germany and in the B2B and Private Labels segments.
Revenues related to the segment Milk Products appear to be decreasing due to a combined effect of a reduction in the average selling price and a slight decrease in volumes in Italy and in particular of fresh milk.
Revenues related to the segment Bakery Products appear to be decreasing due to the combined effect of a shift in promotional activities in the months of July and August (-3% volume effect) and a reduction in the average selling price (-7% price effect) due to the deflationary effects recorded in the first half of 2024.
Revenues related to the segment dairy products are showing a sharp increase as a consequence of an increase in sales volumes (+10% compared to the volumes recorded on 30 June 2023) and an increase in the average sales price (+3% compared to the average sales price on 30 June 2023).
Revenues related to the segment Special products appear to be decreasing, as a consequence of a decrease in sales volumes linked to the investments made at the Ozzano Taro plant not yet concluded as of 30 June 2024.
Revenues related to the segment Instant noodles & bakery mixesappear to be decreasing due to a combined effect of a reduction in the average selling price and a slight decrease in volumes in the United Kingdom and in the Large-Scale Retail Trade and Private Labels segment.
Revenues in the Other Products segment are in line with the previous period.
Channel related revenues Big organised distributionrecorded a decrease due to a drop in turnover in the Pasta, Milk and Instant Noodles segments.
Channel related revenues B2B partners recorded a decrease due to a drop in turnover in the Pasta, Bakery and Special Products segments.
Channel related revenues Normal trade recorded a decrease due to a drop in turnover in the Milk segment.
Channel related revenues Private labels recorded a decrease due to a drop in revenues in the various sectors in which the Group operates.
Revenues related to the Food services channel are substantially in line with the same period of the previous financial year.
Revenues related to theItaly decrease, mainly due to a decrease in turnover in the Pasta, Milk and Bakery sectors.
Revenues related to the Germany decrease, due to the combined effect of a decrease in turnover in the Pasta sector partially offset by an increase in the Dairy sector.
Revenues related to the UK decrease, due to a decrease in turnover mainly in the Instant Noodles sector.
Revenues related to the Other countries decrease due to a decrease in turnover in the main business units in which the Group operates.
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Net Financial Position Analysis
Il financial debt netto as of June 30, 2024, it is equal to Euro 42,6 million, a significant improvement compared to Euro 74,3 million as of December 31, 2023, thanks to the Newlat Group's ability to generate cash flows from operating activities. Net of the IFRS 16 leasing accounting effects, the net financial position is equal to Euro 1,5 million compared to Euro 29,5 million as of December 31, 2023.
Net debt/EBITDA ratio significantly improved and equal to 0,59 compared to 1,03 at the end of December 2023. Gearing ratio equal to 0,22 compared to 0,43 at the end of 2023.
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Own actions
By virtue of the authorization to purchase and dispose of treasury shares, approved by the Shareholders' Meeting of the Company on 29 April 2024, Newlat Food as of 30 June 2024 held n. 900.690 own actions.
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Significant events occurring after the end of the first half of 2024
On 30 July 2024, all the conditions precedent provided for by theagreement for the purchase of Princes Limited and therefore the Company has acquired the entire share capital. With the completion of the agreement, Newlat Group has sold 9.319.841 shares of the company, representing 21,2% of the company's capital, to Mitsubishi Corporation in exchange for payment of approximately 58 million Euros.
On the same date, the Board of Directors, following the favorable opinion of the Committee for Related Party Transactions, resolved to sell 919.841 treasury shares to the parent company Newlat Group SA for a value of Euro 11.222.060.
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Foreseeable evolution of management
The acquisition of Princes will allow the Group to obtain economies of scale and economic synergies and consolidate the excellent results achieved during the first half of 2024 despite an international framework that remains very complex.
Since the first day of integration between Princes and Newlat Food, significant improvements in working capital and procurement synergies have already been recorded, highlighting clear opportunities for revenue growth. The alignment of supplier payment terms with the rest of the Group has led, from an initial examination, to a reduction of 6 days in the trade credit cycle, optimising the management of working capital.
On the procurement front, analyses are underway on sourcing opportunities across the entire product portfolio, where the Group has already achieved significant improvements in purchasing conditions. In addition, work is already underway on a plan that will produce operational efficiency with a consequent significant reduction in costs.
Revenue synergies may already show tangible results in the short term with the launch of new tuna and tomato lines in the Italian and German markets, while exploring further innovation opportunities leveraging the production capabilities of Symington's and Princes' plants in the UK. These developments consolidate the basis for improved margins and strong cash generation in the medium term.
La proforma net financial position consolidated stands at Euro 444,2 million. Excluding the effects of IFRS 16, the PFN is equal to Euro 354,2 million. This amount excludes the subordinated shareholder loan of Euro 200 million of Newlat Group.
Based on the available indicators, the Group expects a turnoverfor the entire financial year, on a comparable basis, substantially stable, and in terms of margins, the Group aims to improve the performance recorded during 2023 and in this first half of 2024.
The Group will continue to pay particular attention to the cost control and to financial management, in order to maximise the generation of free cash flow to be allocated both to organic growth through external means and to the remuneration of Shareholders also in light of the recent acquisition of the Princes Group Limited.
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Conference call on the results of the first half of 2024 of the Newlat Food group
The Newlat Food Group results for the first six months of 2024 will be illustrated in English during the conference call which will be held on September 10 at 11:00 (CEST). To participate in the conference call (Meeting ID: 2366 466 8742 Password: ZSzXiEUA276 ; 97994382 from telephones and video systems) it is necessary to connect, at least 10 minutes before the start, to the following numbers: (i) for Italy: +39-069-974-8087; (ii) for the United Kingdom: +44-20-7660-8149; (iii) for Germany: +49-619-67819736; (iv) for France: +33-1-7091-8646; (v) for Switzerland: +41-2256-75905; (vi) for Spain: +34-91215-8236; or – to follow the presentation live – connect to the following link: https://newlatfoodspa.my.webex.com/newlatfoodspa.my/j.php?MTID=mee331b7810d0ab4f1705af9aa249ff1d
The presentation will be available on the Company's website (www.newlat.it) and in the storage system (www.emarketstorage.com) approximately half an hour before the start of the conference call. The recording in MP3 file will also be available on the Company's website starting from September 11, 2024.
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Declaration of the manager responsible for preparing the company's accounting documents
The manager responsible for preparing the company's accounting documents, Rocco Sergi, declares, pursuant to and for the purposes of article 154-bis, paragraph 2, of Legislative Decree no. 58 of 1998, that the information contained in this press release corresponds to the documentary evidence, books and accounting records.
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This press release is available on the Company's website at www.newlat.it and on the authorized storage mechanism eMarket Storage at www.emarketstorage.com.
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The document “Half-Year Financial Report as of June 30, 2024” is available on the Company’s website at www.newlat.it, as well as at the authorized storage mechanism eMarket Storage at www.emarketstorage.com.
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For more information
Investors
Blessed Mastrolia
Newlat Food Investor Relator
Mob. +39 3319559164 investors@newlat.com
Press Office
Mark Trevisan
Barabino & Partners
Phone. +39 0272023535
mob. +39 3474729634
m.trevisan@barabino.it
Alice Brambilla
Barabino & Partners
Phone. +39 0272023535
mob. +39 3282668196
a.brambilla@barabino.it
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Newlat Group
Il Newlat Group is a leading multinational, multi-brand, multi-product and multi-channel player in the sector agri-food Italian and European, with a portfolio of over 30 historic and internationally recognized brands. The Group is a leader in several categories, including pasta and baked goods, dairy products, fish and canned foods, edible oils, ready meals and specialty products such as infant nutrition and wellness foods.
With a consolidated presence in 4 key markets and exports to over 60 countries, Newlat serves more than 30.000 customers among the most important retailers in Europe. In 2023, the Group generated proforma revenues of 2,8 billion euros, thanks to a workforce of over 8.800 employees and 31 plants distributed in Italy, the United Kingdom, Germany, France, Poland and Mauritius.
Newlat Food, with its solid production and distribution network, is one of the main players in the European agri-food sector, with a clear focus on innovation and quality.
For further information, please visit the websites: www.newlat.it and www.princesgroup.com.
