Announced today during its Capital Markets Day for analysts and investors in Amsterdam, Corbion management has named Creating Sustainable Growth as its aim in its strategy update for the period 2018 to 2021.
Corbion has built a solid foundation for the company in the past years with its Disciplined Value Creation strategy, the company notes. The new strategy aims to deliver higher organic sales growth of between 3 and 6 percent annually.
“Since 2014 we have made great strides in strengthening Corbion, building one coherent company, and creating value in a disciplined way,” comments Tjerk de Ruiter, CEO of Corbion. “We are now ready for the next phase of increased organic top-line growth and continued value creation for our stakeholders.”
“We aim to be the leading innovator for sustainable ingredient solutions by offering conscious choices, uniquely tailored to create customer value,” De Ruiter adds. “Our ambitious sustainability goals are aligned with the United Nations Sustainable Development Goals to create maximum positive impact.”
Growth initiatives
In Ingredient Solutions, Corbion has prioritized the following growth initiatives:
• In Bakery, it will expand in Latin America, while in the US it will target faster-growing segments such as sweet goods and the foodservice channel.
• In Meat, Corbion will extend the current antimicrobial/preservation product portfolio to a wider offering of ingredient solutions.
• In Biochemicals, it will continue with the portfolio approach based on lactic acid, boosted by new innovations such as the resorbable polymer applications in Biomedical.
In Innovation Platforms, Corbion's portfolio contains several initiatives that are on the brink of contributing meaningful sales levels in PLA (in a joint venture with Total) and DHA (in a joint venture with Bunge), according to Corbion. In addition, other organic acids such as FDCA and biobased succinic acid will remain part of its strategic innovation program.
To support these growth initiatives, Corbion has promised to invest more in R&D. The R&D expenses as a percentage of sales will increase from 3 percent to 4 percent, while at the same time the organization will be adapted to accommodate the solutions model, with an increased focus on customer needs, co-creation and sales support.
Financial guidance 2018 to 2021
Corbion, therefore, sets out its financial guidance for the “Creating Sustainable Growth” period as follows:
• Ingredient Solutions: Net sales growth of 2 to 4 percent per annum (1 to 3 percent in Food, 3 to 10 percent in Biochemicals), while maintaining EBITDA margin greater than 19 percent and ROCE greater than 20 percent per annum throughout the period. Recurring capex is expected to be on average €40 million (US$46.4 million) per annum.
• Innovation Platforms: To better reflect the underlying performance, in addition to reporting IFRS figures, disclosure of proportionately consolidated joint venture figures will be provided for net sales and EBITDA. Net sales growth (including proportionately consolidated joint ventures) 10 to 30 percent per annum. EBITDA (including proportionately consolidated joint ventures) approaching break-even in 2021, while the maximum loss is not expected to exceed €-35 million per annum for the years 2018 and 2019. Recurring capex (including proportionate share in JV capex) of € 20-30 million per annum.
• Progressive regular dividend policy: Ambition to pay out annually a stable to gradually increasing absolute dividend amount per share.
