Switzerland's Bell Food Group has said that it has taken a 'significant strategic step towards successful development', following its decision to sell its German sausage business and the opening of new production facilities.
The group, which owns the Hügli and Hilcona brands, among others, made the announcement as it announced sales of CHF 2.0 billion (€1.84 billion) for the first half of the year, to 30 June, which it said was 'on a par' with the prior year period.
Profit Impact
Gross profit at the business, however, declined by CHF 3.4 million (€3.14 million), due to a 'substantial increase' in raw material prices at both Bell Germany and Bell International.
EBITDA for the first half of 2019 was down CHF 19.8 million on the same period in 2018 at CHF 116.8 million (€107.2 million). However, this figure includes pro rata one-off costs of CHF 10 million relating to its decision to exit the German sausage market.
'The first half of 2019 was dominated by the sharp increase of raw material prices for meat in Europe, the organisational restructuring of Bell Germany and unfavourable weather conditions,' the group said.
Divisional Performance
Bell Germany's sales revenues were 22% down in the period, compared to the same period last year, while sales volumes were down by 30.5%.
The group announced that it was exiting the sausage market in Germany on 24 June, with its production facility in Bad Wünnenberg set to be converted into a plant for fresh convenience products.
In its home market of Switzerland, meanwhile, Bell saw a 1.4% decline in sales, mainly due to a slowdown in the retail sales channel, as well as a 'slow start' to the barbecue season. Sales volumes were down 3.3%.
Bell International saw sales revenue increase 3.8% in the period, while volumes were up 3.2%. However it said that high raw material prices for pork led to an increase in procurement costs.
Its Convenience arm, meanwhile saw sales rise CHF 33.2 million to CHF 548.9 million in the period, with volumes lifted by the takeover of Sylvain & Co in May of last year.
The group's Eisberg division recently unveiled what it describes as 'Europe's most modern convenience plant', in Marchtrenk, Austria, which will develop fresh convenience products for the German and Austrian markets.
Outlook
Looking ahead to the remainder of the year, Bell Food Group said that it is aiming to 'increase prices further in the second half of 2019 and intends making additional operational progress in all business areas.
'The focus also falls on the commissioning of the new production plants, the conversion of the Bad Wünnenberg facility and the sale of the German sausage business.'
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
