French botanicals giant Naturex said first half results had been dented by a difficult macroeconomic environment and exchange rates, despite restructuring and acquisition moves.
Net income for the group was down 26.1% compared to the first half of 2013. Naturex's Chairman and CEO Thierry Lambert said the trend towards natural ingredients remained strong, yet sales had been hit by circumstances beyond the company’s control including destocking by certain customers in the US, where the market was “moreover less buoyant than in the past”.
"Our results for the 2014 first half were directly impacted by a worldwide economic and geopolitical situation that has significantly deteriorated against the backdrop of a very unfavourable foreign exchange environment, resulting as a primary consequence in readjustments by our customers of their procurement plans and significant destocking,” he said.
The firm reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of €24.2m in the first half of 2014 compared to €28.4m in the same period of 2013. Meanwhile net income came in at €7.5m compared to €10.1m in 2013 after a tax expense.
Staff costs rose by 5.6% (€1.9m) once the integration of its two acquisitions Chile Botanics and the US firm Vegetable Juices had been accounted for. However, the firm added that external charges had decreased by 8.5% due to both lower sales and a greater efficiency of insourcing.
Lambert said the company was optimistic moving forward since it would have a “more favourable comparison base” and a “good pipeline of projects”. The group hoped its Vegetable Juices acquisition would help it strengthen its position in the US market, while its buy of the Chilean Quillaja extract specialist would give it a technical edge.
Food and beverage was seen as a key segment for sales for the firm which also covered nutrition and health, personal care and toll manufacturing. The company said its food and beverage segment had “bolstered sales for the 2014 first half with quarterly levels exceeding all quarters of the prior year, attributable in particular to a better structured commercial organisation more focused on market applications, and despite the weakness of demand in Western Europe”.
The half year also saw the closure of its Californian production site Shingle Springs, which affected 17 workers.