Profit Plunge at Bel Group
Despite uncertain conditions arising from geopolitical unrest in Africa and the Middle East, Bel Group increased sales by 4.7% to Eur1.22 billion in the first half of 2011. However, operating income at the French branded cheese producer declined by 35.5% to Eur90 million, impacted by sharp rise in raw material prices and the international geopolitical environment.
The increase in raw material prices also weighed on working capital requirement and led to net financial debt of Eur312 million at June 30th 2011, up from December 31st 2010. However, net financial debt represented 31% of consolidated equity at 30th June 2011, versus 35% at 30th June 2010. The group’s balance sheet thus remains very healthy.
Bel Group does not anticipate any improvement in market conditions in the second half of 2011, with raw material prices expected to remain high, economic and financial conditions likely to stay very turbulent and an unpredictable geopolitical situation. Against this unfavorable backdrop, the group will continue in its efforts to ensure volume growth, defend market share, further its policy of selective price increases, and strengthen plans to improve operating performance.
The group does not expect to see a recovery in operating margin in the second half of 2011 and anticipates a decline for the full year versus 2010.
Bel Group’s portfolio of cheeses includes international brands such as The Laughing Cow, Kiri, Mini Babybel, Leerdammer, and Boursin, as well as some 20 local brands. Bel Gtoup employs 11,300 people in some 30 subsidiaries around the world and operates 26 production sites.
