ORIOR holds firm in challenging market environment
ORIOR, the Swiss leader in the fresh convenience food and meat refinement segments, performed well in a challenging market environment in 2011. Although revenues fell slightly owing to pricing pressures on its product range, the company maintained its EBITDA at the previous year’s level and boosted its profit for the year to CHF 28.2 million. In a number of key product areas ORIOR increased its market share. In line with its overall strategy, ORIOR acquired a number of smaller companies which complement the product range and whose products were already largely distributed via ORIOR. Bolstered by this strengthening of its core business, its strong innovation and renewed management team, ORIOR is well placed to meet future challenges.
The main markets for ORIOR products were dominated by the strength of the Swiss franc in 2011. Retail revenues were dented by pricing pressures on the company’s product ranges and shopping tourism in Switzerland’s border regions. The food service sector in the tourist regions also suffered from the impact of the strong franc. Given these conditions, the ORIOR Group performed well in the 2011 financial year. Although revenues slipped 1.8% to CHF 496.6 million due to negative inflation in the product portfolio, EBITDA was maintained at CHF 53.9 million, in line with the previous year, representing an improvement in the EBITDA margin from 10.7% to 10.8%. Profit for the year rose to CHF 28.2 million, a year-on-year increase of 4.5%. With its equity ratio of 47.3% as at 31 December 2011 (31.12.2010: 43.8%), the ORIOR Group has a solid foundation from which to meet future challenges.
Dividend increase proposed
In the light of the good results and the sound balance sheet, the Board of Directors proposes that the annual general meeting of shareholders, to be held on 27 March 2012, vote a dividend of CHF 1.93 per share, compared with CHF 1.90 the previous year. This gives a payout ratio of 40.5% of the profit for the year, which conforms to ORIOR’s dividend policy. The distribution will be made from capital reserves and hence without deduction of withholding tax.
Market position strengthened, boom in export business
The 2011 financial year witnessed a particularly strong performance by ORIOR Refinement. This Group segment specialising in meat refinement further enlarged its market share with its flagship brands Rapelli, Ticinella and Spiess. Sales volumes rose markedly. After allowance for the decrease caused by lower commodity prices, the company still managed to raise revenues by 0.6% to CHF 302.3 million in 2011. The EBITDA margin improved once again, from the year-back figure of 8.5% to 9.4%. ORIOR Convenience, the Group segment specialising in fresh convenience products, posted revenues of CHF 189.8 million for the year under review, a decrease of 6.2% against the previous year. The EBITDA margin edged back from 15.6% in the previous year to 15.3%. This decline was attributable to a supply contract that expired in the first six months and could not be fully replaced in the second half of the year, as well as to the sharp decrease in sales promotions by major clients. Export business performed very well, with revenues in Swiss francs up 49.8% on the previous year. Although margins narrowed because of the difficult exchange rate, ORIOR succeeded in significantly strengthening the profile of its strategic product lines (especially Bündnerfleisch and vegetarian convenience products) in both French and German markets.
Small acquisitions to round out the product portfolio
In line with the strategy of strengthening the core business by adding high-quality products in selected market niches, ORIOR made two small-scale acquisitions in the year under review. In January 2011 the Rapelli competence centre took over the small firm Keller with its Val Mara brand, thereby expanding its range of authentic, traditionally produced Ticinese specialties. To secure market leadership in the vegetarian segment of meat substitute products, in April 2011 the leading tofu producer Bernatur was acquired and integrated into the Fredag competence centre. Because the products of both these firms were already distributed mainly through ORIOR, the takeovers have a largely neutral impact on revenues.
Acquisition of Möfag – Mösli Fleischwaren AG on 1 March 2012
The latest acquisition is the company Möfag, a well-known producer of Fürstenländer meat specialties (Mostbröckli, ham, etc.). The family business with 55 employees has strong roots in eastern Switzerland and supplies both the food service trade and retail channels. With its product range, popular brand identity and strong position in the discount segment, Möfag is an ideal complement to the Refinement segment. Möfag will be integrated into the ORIOR Group as of 1 March 2012, as an autonomous unit managed by its previous owner and the existing management team.
Focus on innovation and increasing efficiency
ORIOR maintained its usual high level of innovation in the year under review. The various competence centres saw the launch of many new products designed to satisfy consumers’ wishes. These included a top-of-the-range raw ham cured on the Alpe Piora in the Ticino under the Ticinella label, Bündnerfleisch marinated in Barolo wine from Spiess, and the black tiger shrimps marketed exclusively in Switzerland by Fredag and certified with the Bioknospe ("eco-bud") symbol. Last year also saw ORIOR bring several efficiency enhancement initiatives to successful completion, including an automated flour delivery and dosing system in the pasta production and the optimisation of internal logistics at Fredag. These initiatives improve the ORIOR Group’s cost position.
Continuity in management
In the 2011 financial year there were a number of changes in management within the ORIOR Group. Remo Hansen, previously Head of the Fredag and Pastinella competence centres and member of the Management Board, was appointed CEO of the ORIOR Group with effect from 1 May 2011. To preserve continuity at the company’s helm, the long-serving CEO and Delegate, Rolf U. Sutter, took over as Chairman of the Board of Directors. Other new appointments include Stefan H. Jost, who took charge of Exports, Logistics and Corporate Development in the middle of 2011, and Bruno de Gennaro, the longstanding Head of Rapelli, who became head of the Convenience segment and the Fredag competence centre as of the beginning of 2012. Rapelli will now be headed by the Ticinese Glauco Martinetti, previously responsible for Marketing and Sales. Michel Nick, the long-serving head of Marketing and Sales, has now taken charge of the Pastinella competence centre. Albert Spiess, who has managed Spiess AG for nearly 40 years, will retire in the middle of 2012. His successor, Bruno Bürki, who will join ORIOR from Migros-Genossenschafts-Bund, is a highly capable meat trade specialist with a wealth of retail experience.
Outlook: steady growth of the company
The macroeconomic environment in the markets of relevance to ORIOR is likely to subside further in the current year, while the problem of shopping tourism will persist as long as the Swiss franc remains strong. Even so, ORIOR is optimistic about 2012. With its range of products and brands, the Group is very well positioned for the retail sector and food service providers. ORIOR emphasises its objective of achieving medium- to long-term organic growth of 1% to 2%. This year, as before, ORIOR will continue its rapid pace of product innovation, launching numerous new products in the Refinement and Convenience segments. In addition, its latest acquisition has enabled ORIOR to strengthen certain distribution channels. In export business, last year’s surge in growth is likely to be followed by a phase of consolidation. And ORIOR will push ahead with its efficiency enhancement initiatives to ensure that its cost structures remain competitive. Looking forward, CEO Remo Hansen says: "2012 will present a number of challenges for us. But ORIOR has always performed well, particularly in challenging times. Our product range covers a broad spectrum of market niches, and we supply the whole Swiss retail trade and the food service channel. We also have lots of product innovations in the pipeline. So I am confident that ORIOR will be able to continue strengthening its position in the current year."