For the 2021-2022 financial year, LDC Group reports its sales have surpassed EUR5 billion (US$5.33 billion), generating operating income of more than EUR200 million.
The latest results just published cover the fiscal year from March 1, 2021 to February 28, 2022. Overall, they show improvements in volume of sales for all three of its business divisions, along with increased sales and margins.
Commenting on the results, the company reports that this performance demonstrates LDC Group’s resilience in a very challenging market. Raw material costs have risen sharply over the past year.
Overall, the group’s sales amounted to EUR5.069 billion (US$5.403 billion) for the 12 months to February of 2022. This represents a 14.5% increase year-on-year.
LDC’s profitability — expressed as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) — for 2021-22 was EUR399.0 million. The figure is 11.0% higher than for the previous 12 months. Meanwhile, EBITDA as a percentage of turnover rose from 7.9% the previous year to 8.1%.
Double-digit revenue increases for all business units
For the 2021-2022 year, LDC Group’s sales volume increased by 7.3% to almost 1.144 million metric tons. The reported figures represent latest performance, including recent acquisitions.
Largest contributor to the overall sales figure of EUR5 billion was the firm’s Poultry France division. At almost EUR3.75 billion, sales for this unit (including the Upstream operations) were up 12.7% year-on-year. For this business, sales volume was up 7.3% year-on-year.
LDC attributes this expansion to growth in hospitality/food service and exports, as well as the contribution of the Ronsard Group. This business was integrated into the Group in April of 2021. Furthermore, LDC was able to raise its prices to cover the rising costs of raw materials during the 2021-2022 period.
At 28.0%, the International division achieved the highest revenue improvement compared to the previous fiscal year. This unit achieved sales of EUR570.7 million (at constant exchange rates), boosted by output from its Marnevall operation in Hungary, as well as more recent acquisitions in Poland and the United Kingdom (U.K.). For this business too, the Group was able to increase prices to offset rising costs — particularly for duck and goose products.
The group’s third business unit is “Catered food.” Including both chilled and frozen products, its sales increased by 14.5% in value from 2020-2021 to almost EUR750 million for the year just ended. Sales volume for the year was 8.6% higher in 2021-2022.
The division’s strong growth was put down to the resumption of catering following the coronavirus (COVID-19) pandemic, as well as to market share gains of the company’s leading brands.
Outlook for 2022-2023
As its new fiscal year started, the war in Ukraine, continued outbreaks of highly pathogenic avian influenza (HPAI) in France and across Europe, and rising production costs all made for challenging business conditions for the LDC Group in the coming months.
As a result of HPAI outbreaks, the company reduced its slaughtering activities and temporarily closed some of its sites. Poultry volumes could be reduced by as much as 20% for the March-August period, LDC forecasts. With the disease situation now appearing to be under control, however, this shortfall could be reduced.
While LDC has achieved a 25% increase in its poultry selling prices over the past 16 months, further rises are needed to cover the continued upward movement and volatility in production costs. By July, it will need a further 10% increase to offset these cost hikes, according to LDC.
In France, the company says its prospects for the coming months depend heavily on the outcome of discussions with its customers over prices. However, LDC Group is more optimistic about the outlook for its international division.
More on LDC Group
Slaughtering more than 578 million birds annually, LDC Group is Europe’s largest poultry company, according to WATTPoultry.com’s Top Poultry Companies survey.
At the end of 2021, the group announced that Denis Lambert was handing over to Phillippe Gélin as chairman of the board.
Around the same time, the group was reported to be seeking acquisition candidates outside its home base in France. Targets were small and family companies elsewhere in Europe, such as Hungary, Poland, and the U.K.
Just a couple of months previously, LDC Group took over Capestone Poultry. Based in the Wales (U.K.), Capestone specializes in organic poultry production.
At the end of 2020, LDC diversified into the Asian Food market when it purchased a majority share of French-based Asia General Food.
Specialists in breaded products in Hungary, Marnevall was acquired by LDC Group in 2019.