Leading Swiss food group ORIOR AG, which specialises in fresh convenience foods and meat refinement, can look back on a good 2014. Revenue was up slightly, while margins increased at group level. The main growth driver was the Convenience business which did particularly well with vegetarian specialities, poultry products and gluten and lactose-free products. Based on its leading position in targeted markets and its high level of innovation, ORIOR Group can look forward with confidence.
The ORIOR Group generated revenues of CHF 521.6 million in 2014, thus exceeding the prior-year figure despite significantly lower export sales. In the main Swiss market there was revenue growth of 1.4%. Thanks to a strong second half, EBITDA rose 2.2% to CHF 48.0 million, giving a margin of 9.2% compared to 9.0% in the previous year. Profit for the year was 5.1% higher than in 2013 at CHF 26.5 million. This translates into earnings per share of CHF 4.48 (2013: CHF 4.26 per share).
As expected, operating cash flow fell from CHF 40.5 million in 2013 to CHF 28.6 million. The main reasons for the decline were changes in payment conditions and the payment of taxes from previous years. The equity ratio rose again to 53.5%.
Dividend increases slightly again
The Board of Directors is again proposing a higher dividend of CHF 2.00 per share to the Annual General Meeting of 26 March 2015. This gives a distribution ratio of 44.6% of the net profit, which conforms to ORIOR's dividend policy. The payment will be made from capital contribution reserves and so is not subject to Swiss withholding tax.
Segments operating at a good level
For 2014 ORIOR's Convenience segment, which specialises in fresh convenience food with its three competence centres – Fredag, Pastinella and Le Patron, reported sales growth and a margin at around the prior-year level.Revenues rose from CHF 199.1 million in the previous year to CHF 207.0 million. Ultra-fresh menus, poultry products and vegetarian specialities performed particularly well again. The vegetarian line was boosted by the acquisition of organic tofu specialist Noppa AG. The EBITDA margin remained the same as in the previous year at 14.3%.
The Refinement segment, with its competence centres Rapelli, Albert Spiess and Möfag, came in just below the 2013 performance with revenues of CHF 316.3 million. High raw materials prices once again had a negative impact on the gross margin, resulting in a reduction in the EBITDA margin from 7.4% in the previous year to 7.1%. Thanks to the good product mix during the year under review, the segment did increase its volume of sales, but EBIT was still down on the previous year at CHF 14.5 million (2013: CHF 15.8 million). The main drivers of growth throughout the year were the Rapelli and Möfag competence centres, with Möfag once again achieving record sales. The Albert Spiess competence centre was unable in the second six months of the year to compensate fully for its first-half results, which were slightly below expectations.
The Corporate and Export segment was restructured during the year under review. ORIOR sold its logistics company Lineafresca to a longstanding transportation partner, and formed a strategic alliance with this partner. Export business fell short of expectations in 2014. Sales fell from CHF 22.3 million in the previous year to CHF 19.5 million as the main export market, France, continued to suffer under difficult economic conditions. Added to this, one of the main distributors used by ORIOR went bankrupt. The vegetarian and vegan products sold under the "Nature Gourmet" brand enjoyed healthy growth. Sales increased in Germany in particular.
The Convenience segment is likely to perform well this year too. Fresh convenience and ultra-fresh convenience will remain fast-growing markets going forward. More and more consumers are looking for quick and easy meals that offer top quality, health and variety. The market for vegetarian and vegan products will also see strong growth. The acquisition of Noppa AG to round out our portfolio is delivering additional impetus in the ongoing development of this product portfolio. There is also growing consumer demand for a wider range of products catering for specific nutritional requirements – e.g. diets and food intolerances. Thanks to its leading position, ORIOR will benefit from this growth.
The Refinement segment also expects slight growth for 2015. Lower pork prices should have a positive effect on profitability in the first few months of the year, but prices are then likely to be adjusted in the spring. For products that require maturing, like cured hams, the positive price effect is delayed by the relevant maturing time, i.e. by up to 18 months. Supplies of Swiss beef are likely to remain low this year, which will keep beef prices up.
ORIOR expects export business to either hold steady or decline slightly this year. The strong Swiss franc is the main negative factor here, though the relatively modest level of export sales will only have a minimal impact on the profitability of the group as a whole.
From the current perspective, the strength of the Swiss currency is not expected to have a substantial influence. There is no doubt that border regions and tourism will see revenues decline, and this could affect ORIOR indirectly. The response of the market and market players to the strong Swiss franc could increase competition if, for example, imports increase. ORIOR's core businesses are ideally focused, and together with a strong culture of innovation and a focus on quality and freshness, ORIOR's product and brand portfolio is very well positioned.
ORIOR Group's key figures for the 2014 financial year
in CHF 000
∆ in %
as % of revenues
as % of revenues
Profit for the year
as % of revenues
Net debt, third parties
1 See note 2 in the Financial Report