Sector Study: Frozen products
Remarkable boost of the market in 2017
The domestic sector of frozen products is examined in a recent study of Infobank Hellastat S.A. According to Alexis Nikolaidis, Economic Research & Sectorial Studies Senior Analyst, in 2017, retail trade improved, with the revenues of supermarkets rising slightly to the level of 3%, after the losses of the year before. This rise was mostly due to the last two months, since, until then, sales had shown a marginally upward trend.
A key boosting parameter was the food & beverage market, the turnover of which – according to IRI – recorded a rise of 3.2%, with positive trends being identified in all categories. In this upward momentum, the sales of frozen products recovered, showing an increase by 8.4%, which was the highest, compared to other categories of consumer goods.
However, according to sector operators, the broader food market was also favored last year, by the gradual return of the network of Marinopoulos to normal operation, after its acquisition by Sklavenitis.
Companies of the sector implemented promotional programs on a large scale, with regard to the inclusion of their products in discount offers by chain stores, quantity-based offers (additional product included in the package), and coupons with reduced prices. Although this policy supports the volume of sales, it sometimes fails to favor the level of revenues.
This fact is reflected in the relevant price indices of ELSTAT for key product categories of the market, with the average price in frozen fish falling by 2% in 2017, compared to the year before, while the drop in frozen vegetables amounted to 0.4%. On the contrary, the level of prices in frozen fish products rose to the level of 0.9%.Regarding this year, in the first two months already, frozen products have demonstrated the highest rise among all the categories of fast-moving goods, in terms of value and volume, by 4.2% and 7% per annum, respectively.
According to Mr. Nicolas Gouzelos, CEO of Infobank Hellastat, “Demand for frozen products – and food products, in general – can increase further, provided that stable economic conditions prevail, which will be able to improve consumer psychology. This trend was reflected in 2017, and is also expected to prevail this year, during which, it is predicted that the sales of frozen foods will show a significant rise.“.
In the study conducted by IBHS, an analysis takes place of the financial statements of 34 manufacturers. The key conclusions drawn are summarized as follows:
- In 2016, Turnover increased further by 3.7% to €514.4m.
- Total EBITDA boosted by 11%, at €50m, while EBT rose by 15.2% to €22m.
- The EBITDA margin and the EBT margin rose to 7.6% and 3.2%, respectively.
- Capital leverage rose to a high of 2.3 over 1.
- Receivables were collected within a period of 3 months.