Turnover for first half-year 2002: up 3.8% - 13/07
French market readjusts in second quarter
Producers of poultry and pork, who had reaped the benefits of a temporary shunning of beef by consumers, had to revise their production volumes down sharply. Poultry producers also faced pressure from massive cheap imports. In addition, the size of dairy herds was reduced and, and as a result of the good weather conditions, animals tended to be kept out on pasture, a factor that lowered demand in the ruminants market. On a declining market, Evialis reported a decrease in its business in France.
In contrast, value-added and international activities continued to grow at a sustained pace. This good performance, together with the contribution of the acquisitions made by Evialis in 2001, cushioned the impact of the readjustment in the French market on the group’s business.
3.8% growth in turnover
The full-year consolidation of AEF (France), Coprex (South Africa), IZA (Italy) and INVE (Spain), excluding the deconsolidation of SIPRA (an integrated poultry business in Ivory Cost), which was sold in January 2002, combined with organic growth in the value-added activities, allowed Evialis to record turnover growth of 3.8%, a decline of 4% on a like-for-like basis.
In the first half, value-added activities contributed almost 50% of turnover, compared with 46% for the same period of the previous year. International activities grew by 8.8% on a like-for-like basis.
Restructuring stepped up
High volatility of volume activities is now a feature of the mature animal feed markets.
Anticipating this trend, Evialis launched an ambitious restructuring programme several months ago. The aim of the programme, which is already largely covered by provisions, is to combine critical mass, compliance with increasingly stringent quality standards, and economic performance.
The project includes the closure of several production sites in France, Brazil and Poland, to enhance the flexibility of the group’s industrial infrastructure.
In France, the cost-reduction plan is supported by a “multi-brand” strategy, a major industrial and commercial advantage that will help consolidate standard activities and expand value-added activities. The programme will make the group more able to withstand events such as those that affected the French market in the second quarter of 2002. The programme should yield its first tangible results by the end of 2002 and have a significant impact in 2003.
Outlook
The weakness of the French market in the second quarter dimmed the group’s prospects. Evialis should nevertheless record income growth in the first half.