La Doria results up due to the Covid-19 pandemic
- Press release
, François-Xavier Branthôme
Results for first three months significantly up on the same period of 2019 and ahead of expectations.
According to the press release published after the approval of La Doria’s 2020 First Quarter Report, the domestic and international picture has been dominated in the first quarter by the spread of Coronavirus and the resulting restrictive containment measures implemented by the public authorities of the countries affected.
The La Doria Group’s priority in the period was therefore the safety of its workforce and its capacity to ensure the provision to the markets of its products at a particularly difficult time for Italy and the entire world, in which household food consumption significantly rose and retail sales of packaged foods saw double-digit increases, partly due to the closure of the HORECA channel imposed since the virus began to spread.
In order to reduce the risk of contagion for employees and ensure at the same time its operational continuity, the company promptly appointed a Crisis Committee, issuing specific provisions and introducing all health safety measures required by the central Government’s orders and those of the regions in which the production facilities are located - four of which are in zones at low epidemiological risk. Similar measures have also been taken for the subsidiary LDH (La Doria) Ltd, with headquarters in the UK.
Against this extraordinary backdrop, the Q1 results improved significantly compared to the same period of 2019 and were ahead of expectations. Sales were up by more than 16% to Euro 213.9 million, thanks to demand peaks among both Italian and overseas customers; in the initial two months of the year, revenues and margins were ahead of expectations, while in March, as a result of the circumstances dictated by the pandemic, an exceptional sales increase was reported which - to differing degrees - was apparent across all regions and product categories.
Overall, the significant increase in consolidated sales in the first quarter of 2020 was driven by strong volume growth, while improved margins stemmed from increased production volumes and the progressive full rollout of the four-year investment plan launched in 2018. The improved sales performance was apparent in the sauces line with an increase of approx. 30%, while the other categories saw growth of between 11 and 16%.
Specifically, with regards to the industrial operations of the Parent Company La Doria S.p.A. and its subsidiary Eugea Mediterranea S.p.A. saw significant revenue growth (+14.4%), entirely due to the sustained increase in sales volumes, despite prices overall remaining substantially stable. Margins rose significantly thanks to the higher production volumes and improved industrial efficiency, as a result of the above-stated investments and despite the increase in the procurement costs of certain raw materials and higher tomato-based product processing costs during the 2019 summer campaign due to the unfavourable climatic conditions.
The trading activities of the subsidiary LDH (La Doria) Ltd on the English market reported a significant increase in revenues (+14.7%), and of earnings as a result of sustained volume growth.
The best performance was seen in the sauces line, up 28.9%. Excellent performances also for the other lines, up 15.6% for the “Pulses and vegetables line”, +11.4% for the “Red line” and +13.5% for the “Fruit line”. “Other line” (trading) sales also significantly increased (+16.4%).
Commenting upon the results, the Chairman Antonio Ferraioli, stated “In these difficult months we have not let up, continuing to work with extraordinary commitment to ensure that our products are provided to our clients and consumers. Thanks to the sense of responsibility of all our employees, we are able to ensure the continuity of production for such an essential chain as the agro-food chain”.
According to the La Doria’s comment, “it is expected that the significant increase in packaged food product demand reported in the first quarter of 2020 following the Covid-19 pandemic shall partially be reabsorbed in the remaining part of the year, although sales of food products on the retail channel may continue to grow also as a result of an extension to the containment measures adopted by the various governments and the gradual opening of the HORECA channel as families may reasonably continue to prefer “home” consumption rather than “eating out”.
Source: La Doria
Some complementary data
La Doria is the leading European producer of processed pulses and peeled and chopped tomatoes on the retail channel and among the leading Italian producers of fruit juices and beverages. La Doria is also the leading producer in Europe of private label ready-made sauces.
Revenues in 2019 totalled Euro 717.6 million, of which approximately 95% generated by the private label segment (retail chain brands), with customers such as Carrefour, Selex and Conad in Italy and Tesco, Sainsbury, Morrisons and Waitrose on foreign markets, which represent the main commercial outlet for the Group.
For further details and figures, you can access the complete press release in the documents presented below, or by following the links below: