French vegan food maker Bonduelle’s full-year profit drops

French vegan food firm Boundelle reported a drop in its full-year operating profit, citing unfavorable weather conditions impacting crops, the COVID-19 crisis, wage inflation, and supply chain disruptions.

The war between Ukraine, once known as the breadbasket of Europe, and Russia has sent food and energy prices to record highs, while summer drought in crucial agricultural regions like France reduced grain harvests and cut inventories.

Additionally, the ready-to-eat fresh activities of Bonduelle’s Fresh Americas division declined over the fiscal year 2021-22 due to a less dynamic market, price increases aimed at preserving margins, and the termination of sales of non-contributing ranges to certain clients, which was not balanced by new contract wins.

The reduction of the ready-to-use fresh food business in North America is weighing on the group’s performance in the short term and according to CEO Guillaume Debrosse, does not call into question the relevance of this acquisition.

Bonduelle Group provides canned, frozen, and fresh processed vegetables and ready-to-eat dishes. THe group reported an operating profit of 96.6 million euros ($94.6 million), excluding IFRS accounting effects, for the 12 months ended June 30, 2022, compared with 100.4 million euros in 2021, corresponding to a current operating margin of 3.3%.

The owner of Cassegrain and Bonduelle brands expects revenue growth of 8%-11% in fiscal 2022-23 with a current operating margin of 2.5%, citing the volatile environment and the partial sale of its long-life activities in North America.