Favorable market, acquisitions boost LDC annual results
A period of lower feed costs helped to boost annual turnover by French poultry company up by 15 percent but it warns of tougher times ahead
Financial year 2015-2016 has been a successful one for LDC, Europe’s top poultry meat company. The French-based group’s turnover was around EUR3.5 billion (US$3.9 billion), 14.9 percent higher than the previous year’s figure of almost EUR3 million. Sales volume was up almost one-quarter at 850,500 metric tons. Results were helped by the contributions made by newly-acquired companies, Avril Group of France and long-established Polish poultry firm, Drop.
Operating income for the 2015-2016 financial year was EUR158.6 million, 4.6 percent higher than previous 12 months.
With feed raw materials prices favorable and the contribution of Avril, LDC’s Poultry division achieved an increase in revenue of 18.6 percent to just over EUR2,495 million with an increase in volume of 30.1 percent. Like-for-like sales were up 3.0 percent in volume and 1.5 percent in value.
The acquisition of Drop helped sales in LDC’s International division reach EUR245.1 million. This is 22.1 percent higher than the previous year on a 26.1 percent increase in volume. Excluding Drop’s contribution, sales were up 3.2 percent and volumes grew 4.9 percent.
Annual turnover of the Ready Meals division was 4.5 percent higher than 2014-2015 at EUR531.5 million, up 4.5 percent. The 4.6 percent boost to sales volume was attributed to a strong performance by the brand, Marie.
Favorable results and prospects have led LDC to announce EUR180 million in investments in the coming year.
Challenging conditions ahead
Looking ahead, LDC management has warned of more challenging trading conditions in the next 12 months, and a slight dip in profits for the Group. The Poultry division is already facing increases in feed prices but these effects will likely be tempered by strong performance from the Ready Meal division’s brands and the complete integration of Drop into the International division.
According to Reuters UK, LDC executives stressed at a press conference their aim to win back market share from cheaper imports, which account for about 40 percent of the chicken consumed in France
They added that the recent avian influenza outbreak in France cost the company around EUR10 million in lost export sales in financial year 2015-2016.
A survey of Top Poultry Companies by Poultry International lists LDC as the leading poultry meat company in Europe with annual production at 370 million birds. As well as France and Poland, the company is also active in Spain.