Iglo's fish fingers. (Photo Credit: Birds Eye)

Iglo’s profits and sales fall due to strong trade competition

Iglo Group experienced a decrease in total net sales and operating profit last year, which was linked to a really difficult economic situation in Europe.

The firm's net sales fell by 2.8 per cent in 2013, compared to the previous year, amounting to EUR 1,529.2 million, and the EBITDA before exceptional items fell by 12.5 per cent, to EUR 306.6 million.

The firm explained that performance fell short of expectations with the highly challenging macro-economic environment, the advance of discount retailers and increased competition from their own-label brands across Europe impacting their top-line and profitability with the most significant impact coming from their Italian business, where performance improved in the final quarter of the year, as innovation helped to deliver a marginal year on year sales growth.

The gross margin worsened last year and fell by 1.2 ppts to 33.4 per cent as a result of the increasingly competitive trading environment.

In the United Kingdom, whilst still experiencing a modest sales decline, the firm held a steady market share. The margin performance was also strong as the delivery of cost savings at their Lowestoft supply operations translated into gross margin expansion in their UK business.

Iglo expects its leadership in frozen products will make it possible to redefine the category as a whole, especially after the introduction of a new CEO, Elio Leoni Sceti and a new Managing Director, Daniel Pagnoni.

According to the group's chairman, Erhard Schoewel, the new proposition for Iglo, Better Meals Together, reflects consumers' own focus on meal occasions, rather than ingredients, and supports their strategy for winning a greater share of the plate, rather than simply a greater share of frozen food purchases.

The firm took advantage of the favourable debt markets towards the end of 2013 to re-set one of their financial covenants, which removes any constraints on the execution of their strategy for the business.
 

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