Eastern Europe makes Provimi Q1 results tumble
Sales for Provimi over the first quarter of 2009 suffered from decreasing raw material prices and lower volumes. Exchange rate effects of Easter European currencies further decreased sales to € 433.9 million or 18.5% less than in Q1 of 2008.
Sales amounted to € 433.9 million in the first quarter of 2009, a decrease of 18.5 % compared to the same period in 2008. On a like-for-like basis1 sales decreased 15.7 %.
The sales decrease was mostly due to decreasing raw material prices and lower volumes. Exchange rate effects had a negative impact of 5.9% (€ 32.0 million), mainly caused by the Polish zloty, the Russian rouble and the Brazilian real, and partially offset by the US dollar.
Operating segmentation
Revenues (in € million) | March 31 2009 | March 31 2008 | Change (%) |
Pet food | 55.5 | 50.5 | 9.9 |
Animal Nutrition | |||
France /Switzerland | 55.0 | 57.6 | -4.4 |
NL, UK, Ireland, Germany, Belgium | 38.1 | 45.9 | -17.0 |
Poland/Ukraine | 70.1 | 119.7 | -41.5 |
Russia, Hungary, Romania, Bulgaria, Bosnia | 56.4 | 73.9 | -23.7 |
North America | 59.8 | 59.1 | 1.1 |
Brazil, Argentina, Colombia | 40.6 | 37.2 | 9.0 |
Rest of the world | 58.5 | 88.6 | -34.0 |
TOTAL | 433.9 | 532.6 | -18.5 |
Pet food up
Pet food sales have increased by almost 10% in comparison to the same period last year. Increased production capacity in Hungary and better utilisation of the Group’s existing plants allowed the business to gain new customers and benefit from a growing demand for private label products.
Pet food margins were negatively impacted by a sharp increase in the cost of cans that the Provimi was not able to pass on to its customers.
The Pet food activity was further affected by the exchange rate of the Polish zloty and the start-up of the business in Russia.
Furthermore, geographic extension is yielding successful first results with additional growth in Germany and Romania.
Animal nutrition worrying
In Animal Nutrition, the sales decrease in ‘North West Europe’ was mainly caused by diminishing volumes in export markets, while turnover in ‘Poland/Ukraine’ was negatively impacted by a declining market, aggressive competition leading to an erosion of market share, and lower prices.
In view of generally lower volumes in Animal Nutrition, the Provimi has engaged in a significant cost savings programme from which it expects to see results in the second half year.
This programme aims at increasing the company’s competitiveness and improving its responsiveness to changing market conditions.
In Other Central and Eastern Europe, the sales decrease is due to the closure of the Provimi’s complete feed activities in Hungary and in the Balkans.
The Provimi Group is active worldwide in all types of animal nutrition. It employs about 8,000 people and has annual sales of € 2.2 billion. Provimi has 87 production centres in some 30 countries and exports to over 100 countries.
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