2010 Results

Monday, 28 February 2011.

The Cocoa & Chocolate business grew 6,8% in sales and confirmed a significant recovery of the Group’s operating result up to € 3.26 M (€ -18.18 M in 2009).

Financing and debt restructuring costs, together with the negative result of discontinued operations and the fall of Forté Pharma’s main business in the first  half of the year had a negative impact on the Natra Group’s net result, which stood at € -12,72 M (€ -53,35 M in 2009).

1. Key considerations


  • The Cocoa & Chocolate business closed 2010 with sales of € 301.95 million (+6.8%) and EBITDA of € 16.21 million, compared with € -4.19 million in 2009. The operating profit of the Natra Group's core business recovered to € 3.26 million compared with € -18.18 million in 2009.
  • Natraceutical closed the year with a turnover of € 38.84 million, EBITDA of € -3.75 million and net result attributed to parent company of € -2.97 million, compared with € -19.11 million last year.
  • On a consolidated level, the Group ended 2010 with sales of € 340.71 million and an EBITDA of € 11.24 million, an operating margin erosion that has placed the Group's operating result in € -3.09 million and the net result in € -12.72 million (compared to € -53.35 million for 2009) mainly due to financing and debt restructuring costs, the negative result of discontinued operations (primarily Torre Oria winery) and the fall of Forté Pharma’s main business in the first half of the year.



2. Business performance


NATRA – Cocoa & Chocolate 

At the end of 2010, Natra Cocoa & Chocolate registered an increase in its turnover of 6.8% compared with the previous year, placing sales in € 301.95 million. Throughout the year, the evolution of the two divisions that form the Cocoa & Chocolate activity (Final Product Division and Cocoa Derivatives Division) remained constant, with strong growth in sales in the Cocoa Derivatives Division (31.5%) and similar sales volumes as last year in the Final Product Division.

The EBITDA margin in the Final Product Division was confirmed at 7.3%, while the Cocoa Derivatives Division achieved some recovery of margins in the last quarter, which allowed to close the year at 2.5%. However, the operating margin of the Cocoa & Chocolate activity as a whole for 2010 stood at a modest 5.4%, despite the recovery from the prior year levels.


Final Product Division

The Final Product business, which at the end of the 2010 represented 73% of Natra Cocoa & Chocolate turnover, includes the production and marketing of tablets, bars, spreads and Belgian chocolate specialities for the private label brand, mainly in Europe.

Sales in this division stood at € 221.09 million, at same levels as in 2009. The traditional sales increase in the second half of the year due to the Christmas season helped balancing the slight decline in sales from previous months (-2.4% at the end of the first half 2010).

Of particular note the good performance of the chocolates range, with an increase of 4.2% versus a decline of 1.6% in the spreads, due to the reaction of the sector’s leading brand following the increase of Natra’s market share in the last year. Despite its lower weight in the total sales of the Division, the range of chocolates is the one with higher margins among Natra’s references and the one which traditionally has the largest demand in the second half of the year. The increase in chocolates sales allowed this product range to increase its relative weight in the overall portfolio of Final Product Division from 2009 to the detriment of other categories. Also, throughout the year, the company has reduced its exposure to the tablets business as a measure to protect its operating margins in a business highly subject to the cost of cocoa.

Sales distribution in the Final Product Division by product range (2010)

Performance was heterogeneous in this Division’s main markets. Remarkable growth of 9%, 10% and 12% in Germany, Holland and Spain, respectively, compared to falls of 10% in France and Belgium and 11% in the UK. The falls in the latter countries respond to the aforementioned reduction in sales of tablets.

Geographical sales distribution in the Final Product Division (2010)

The Final Product Division ended the year with an EBITDA of € 16.05 million, resulting in an EBITDA margin of 7.3%.


Cocoa Derivatives Division

Representing around 27% of the Natra Cocoa & Chocolate turnover, the Cocoa Derivates Division manufactures and sells cocoa-derivative products (cocoa mass, powder and butter and chocolate coating), to be sold to food companies for the manufacturing of their own products.

At the end of 2010, the Cocoa Derivatives unit maintained the significant sales growth achieved throughout the year, reaching € 80.86 million. With this performance, the Division accumulated sales growth of 31.5%. The good development of the Cocoa Derivatives Division's sales was due mainly to an increase of the business in Spain, after gaining Natra relevant trade agreements for the supply of chocolate to new customers as well as by increased demand for cocoa powder in international markets (especially the U.S.).

The Division’s main volume of sales is traditionally concentrated in Spain (50.4%), which accumulated a growth of 29% in 2010. Natra also enjoys international presence for the marketing of its cocoa derivatives, being Germany the division’s second most important market, with 9.9% of the turnover and a growth in the year of 43.8%. The US is the third largest market, with a volume of 6.5% and a cumulative increase in the year of 83.2%.

By product range, there was a significant growth of 74.6% in sales of cocoa powder and 46.6% in chocolate coating, each representing 36% and 33% of the Division’s turnover. Sales of cocoa butter, which comprises 21% of the Division, fell by 21% due to internal use of this cocoa derivative to meet the growing demand for chocolate coating.

Natra continues to strengthen its chocolate coating range, due to its higher margins. However, the high cost of cocoa, which during 2010 reached historic highs, led this division to close 2010 with an EBITDA of € 1.99 million and an EBITDA margin on sales of 2.5%, far below the standard levels of this division, which should normally be placed around the 6-7%.


Evolution of cocoa price

Cocoa cost increased from 2,242 pounds a tone in early January 2010 to 2,360 pounds at the beginning of 2011, having reached its historical peak in mid-July 2010, in 2,465 pounds.

Although cocoa prices eased at the end of 2010, standing at 2,029 pounds per tone, the closure of exports declared in Ivory Coast since 24 January 2011 marked a new uptrend, which should correct itself shall the situation in Ivory Coast improve, because the world cocoa crop has been good.



Natra holds a 46.86% stake in Natraceutical, which is fully consolidated in its financial statements.

  • The year 2010 has been marked mainly by a recovery of Forté Pharma’s sales by 3% in the second half stand, after a fall of 30% in the year to June, as well as by the revaluation of 46% of the stake in Naturex.
  • Natraceutical net result stood at € -6.19 million compared to € -44.90 million in 2009, while the unrealized gains from the stake in Naturex generated during the year and not yet incorporated in the profit and loss account reached € 10 million.
  • After the change in the consolidation perimeter due to the integration of the Ingredients Division into Naturex, Natraceutical closed 2010 with a turnover of € 38.83 million and EBITDA of € -3.79 million, the later with € 0.8 million impact due to non-recurring expenses in corporate services. Net result stood at € -6.19 million, compared with € -44.90 million last year.
  • By divisions, the Food Supplements Division (Forté Pharma) closed the year with sales of € 38.19 million and EBITDA of € -1.03 million, compared to a turnover of € 46.72 million and an EBITDA of € 2.04 million in 2009.
  • The Ingredients activity, which Natraceutical participates in through its 33.8% shareholding in Naturex, is picking up merger synergies at good pace, and would provide an estimated EBITDA of € 12.25 million in 2010 should it be globally consolidated in Natraceutical accounts. Pending to know Naturex results for 2010 to be disclosed on March 31, Natraceutical estimates a net profit of € 13.28 million, from which Natraceutical incorporates the corresponding stake (€ 4.49 million). At the end of 2010, and after a stock appreciation of 46.2%, Natraceutical’s stake in Naturex accumulates an unrealized gain, not yet incorporated in the profit and loss account, of € 10.03 million, which raises the stake value at year end up to € 88.31 million.

On February 28, Natraceutical published comprehensive information on the evolution of its business during year 2010. This information may be consulted in the company’s website: www.natraceuticalgroup.com.


Torre Oria

The winery owned by Natra Group, which the company decided to classify as asset available for sale in 2008 due to its non-strategic condition, concluded the year 2010 with negative results around € 2 million.

Natra is finalizing an agreement to transfer the business operation, subject to the approval of the financial institutions participating in the company’s syndicated loan, which already in the second quarter of 2011 will allow stopping the integration of this business into Natra’s accounts.

The agreement provides for the transfer of the winery production and trade and not the real estate assets, which will remain under ownership of Natra, with a lease-purchase option.



3. Financial structure


On December 31, 2010, the Natra Group's net financial debt amounted to € 261.33 million, of which € 82.98 million corresponded to Natraceutical.

In April 2010, the company announced the completion of its financial debt restructuring process. The resulting agreement included the long-term refinancing of all debt, as well as the contribution of new funds, through a syndicated loan with four-, five- and six-year maturities in the case of Natra and a single maturity in 2013 in the case of Natraceutical.



4. Consolidated Profit and Loss Account


The Group’s consolidated profit and loss account of year 2010 is as follows:



5. Consolidated Balance Sheet as of December 31, 2010


The Group’s consolidated balance sheet as of December 31, 2010 is as follows:


About Natra

Natra is a key player in Europe specialising on chocolate products for the private label brand as well as cocoa derivatives for the food industry. Natra is present in over 24 of the 30-top European retailers with a diversified geographical presence, mainly in France (19% of total turnover), Spain (17%), Germany (14%) and Belgium (12%). The company offers one of the most extensive catalogues available in Europe, as well as a constant commitment to the research and innovation of new recipes, packaging and tailor-made solutions. Natra produces candy bars, chocolates and Belgian specialities, tablets and chocolate spreads. The company has five specialised production centres located in Spain, Belgium and France, as well as sales offices in United States and China. Additionally, Natra holds a 46% stake in public company Natraceutical. 

Natra is quoted on the Spanish stock exchange’s market under the ticker NAT. Total outstanding shares: 47,478,280.


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