ORIOR achieves significant top-line growth, high raw materials prices eat into profits Dienstag, 25. Februar 2014 - 17:44

ORIOR Group

MEDIA RELEASE

ORIOR achieves significant top-line growth, high raw materials prices eat into profits

• Sales increase to CHF 520.0 million
• EBITDA and net profit retreat due to high raw material prices
• Operating cash flow surges more than 28 %
• Market position in convenience business expanded
• Focus on product innovation, brand portfolio and operating efficiency
• Dividend increased again to CHF 1.97 per share

Zurich, 25 February 2014

ORIOR, the Swiss leader for fresh convenience food and premium meat products, achieved top-line growth in 2013. Group profits were weakened by high raw material prices in the Refinement segment, but cash flow increased by more than 28 % from the previous year. Thanks to its strong market position, a pipeline full of innovation and investment in productivity improvements, ORIOR is well positioned for future growth.

ORIOR Group increased its revenues by 3.7 % to CHF 520.0 million in the 2013 financial year. Almost every area of the business reported organic top-line growth. The main engine of growth was the Convenience segment, which once again expanded its market share. The gross margin receded 1.8 percentage points, from 40.7 to 38.9 %. High raw material prices in the Refinement segment were mainly to blame for the margin contraction.

Due to the lower gross margin, EBITDA also declined, down by 8.4 % to CHF 47.7 million. This resulted in a margin of 9.2 % compared to 10.4 % in the previous year. The revaluation of pension plan liabilities in accordance with IAS 19 Revised resulted in the recognition of CHF 0.8 million in employee cost items, which further reduced the EBITDA figure. Profit for the year amounted to CHF 25.8 million, less than the prior-year figure of CHF 27.3 million. Earnings per share amounted to CHF 4.36.

Operating cash flow advanced more than 28 % to CHF 40.5 million. The equity ratio also rose and now stands at 51.5 % (2012: 47.0 %), which underscores the company’s solid financial position.

Dividend increase proposed

In the light of the sound balance sheet and high equity ratio, the Board of Directors proposes that the annual general meeting of shareholders, to be held on 25 March 2014, vote a slightly higher dividend of CHF 1.97 per share. The corresponding payout ratio of 45.2 % is within the targeted range. The dividend will be paid out from capital contribution reserves and is therefore exempt from Swiss withholding tax.

Convenience grows, Refinement steady

The three ORIOR segments Refinement, Convenience and Corporate, Export and Logistics showed divergent developments in the past year: ORIOR Convenience, the specialist for fresh convenience food with three centres of competence – Fredag, Pastinella and Le Patron – reported both higher revenues and profits. Its revenues rose from CHF 190.6 million in the previous year to CHF 199.1 million. Growth drivers were its ultra fresh menus, vegetarian specialities, chicken products and the new gluten and lactose-free fresh pasta products. The EBITDA margin was slightly lower at 14.3 % compared to 14.6 % in the preceding year.

The ORIOR Refinement segment with the competence centres of Rapelli, Spiess and Möfag also grew its top line last year. Revenues rose by 2.1 % to CHF 316.7 million but the very high prices for raw materials weighed on the segment’s gross margin. As a result, despite productivity gains, the EBITDA margin narrowed from 9.1 % in the previous year to 7.6 % in the year under review.

Sales at the ORIOR Corporate, Export and Logistics segment retreated 5.2 % to CHF 34.2 million. Exports of Bündnerfleisch to France were sharply lower last year as French consumers continued to rein in spending. Export volumes to Germany and Austria, in contrast, showed pleasing growth. This business trend was largely driven by the successful re-launch of the “Nature Gourmet” brand.

Key figures for ORIOR Group – financial year 2013

Focus on product innovation, brand portfolio and efficiency gains

ORIOR was able to defend if not expand its market position in nearly every product category. Numerous new products launched with consumer needs in mind contributed to this good performance and also positioned ORIOR in new segments of the market. The Convenience segment, for example, developed a special range of products for allergy sufferers, hospitals and institutional care providers with reduced or zero sodium and fat content, and including gluten and lactose free products. Once again ORIOR Group invested considerable resources in brand maintenance activities during the past financial year, especially for its “Rapelli”, “Ticinella” and “Albert Spiess of Switzerland” brands and its export brand “Nature Gourmet”.

Lastly, the Group also invested CHF 18 million in existing and new plant as well as in its business processes. The two most important investment projects involved the optimisation of production processes at Le Patron and Rapelli’s new order picking and dispatching centre. These investments will improve productivity in the 2014 financial year.

Change in the Board of Directors

Anton Scherrer has decided not to stand for re-election after serving on the Board of Directors of ORIOR AG for seven years. The Board of Directors thanks Anton Scherrer for his many years of service and valuable contribution to the development of ORIOR Group and wishes him all the best for the future. If the other directors are re-elected, the Board of Directors will comprise six members following the Annual General Meeting on 25 March 2014.

Confident outlook

ORIOR expects its relevant markets to show positive developments in the current year. Sales volumes and revenues should continue to grow. ORIOR Group therefore confirms its goal of 1 to 2 % organic growth over a mid- to long-term horizon. Margins will improve only slowly, however, especially in the Refinement segment. ORIOR will step up the development of new products and concepts and is set to launch a host of new products in the retail market during the first half of 2014. Efficiency raising measures will also be continued to further optimise cost structures. CEO Remo Hansen: “ORIOR Group will stay on a growth trajectory in 2014 too. We will continually develop our niches and launch new product innovations that meet consumer needs for freshness and regionality, thereby further strengthening our market position. And we will be working hard on productivity just as before.”

Telephone conference call (in German only)

This Tuesday, 25 February 2014, at 10:00 a.m., Remo Hansen (CEO) and Hélène Weber-Dubi (CFO) will hold a conference call to discuss the full-year results for 2013.

You are invited to participate in the conference call by dialling the following number: Telephone: +41 58 262 07 11.

Give your name and company and then enter the PIN code 581217.

Between 2.00 and 4.00 p.m. (CET) Management is pleased to answer all your questions in English. If you would like to talk to the CEO or CFO please call: +41 44 308 65 00.

Downloads

Presentation on full-year results: http://en.investor.orior.ch/Praesentationen

Annual Report 2013: http://en.investor.orior.ch/Financial-publications

Contact ORIOR AG

Remo Hansen, CEO ORIOR Group, Telephone +41 44 308 65 00, E-Mail: info@orior.ch

Milena Mathiuet, Investor Relations, Telephone +41 44 308 65 13, E-Mail: investors@orior.ch

Financial calendar

25 March 2014: Annual General Meeting, Maag Halle, Zurich

21 August 2014: Publication of half-year results for 2014

ORIOR – Excellence in Food

ORIOR, a Swiss food group with a long tradition, specialises in fresh convenience food and fine meats. With its innovative products and its brands Rapelli, Ticinella, Spiess, Fürstenländer Spezialitäten, Le Patron, Pastinella, Fredag and Nature Gourmet, it occupies leading positions in fast-growing niches in the Swiss retail and food service markets, as well as in selected sales channels in neighbouring countries. In the 2013 financial year ORIOR Group achieved revenues of CHF 520.0 million and employed a workforce of 1300. ORIOR is listed on the SIX Swiss Exchange (ORON, ISIN CH0111677362). Further information is available at www.orior.ch

Forward-looking statement

Information in this release may involve guidance, expectations, beliefs, plans, intentions or strategies regarding the future. These forward-looking statements involve risks and uncertainties. All forward-looking statements included in this release are based on information available to ORIOR AG as of the date of this release, and we assume no duty to update any such forward-looking statements. The forward-looking statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Factors that could affect the Company’s forward-looking statements include, among other things: national and global GDP trends; changes in regulation relevant to the food business; intense competition in the markets in which the Company operates; integration of acquired companies; changes in the Company’s ability to attract and retain qualified internal and external personnel or clients; the potential impact of disruptions related to IT; any adverse developments in existing commercial relationships, disputes or legal and tax proceedings.