Deoleo achieves double-digit growth with sales of €996 million and EBITDA of €33 million

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Deoleo, the world’s number one olive oil company, closed 2024 with double-digit EBITDA growth, reaching €33.4M, a 10.4% increase compared to the previous year. In a challenging 2024 marked by raw material shortages and high volatility, the group has demonstrated the resilience and strength of its business model. Defending the unit gross margin, alongside the strength of its iconic brands, solid commercial management, operational efficiency, and financial discipline, have been key in managing the business after two years of industry crisis.

The defense of the unit gross margin was made possible by proper management of the price variation transfers to customers. This, combined with maintaining volume, allowed sales to increase by 19%, reaching nearly one billion in revenue (€996M).

Regarding the customs litigation faced by the Italian subsidiary of the group, Carapelli Firenze, S.p.A., which was reported to the market last November, and given the uncertainty generated by the unfavorable ruling received for the first time in the second instance, and following a prudence approach, Deoleo has decided to fully provision the amount that has been finally claimed in the corresponding payment request. The recording of this provision (which resulted in a net tax impact of -€48.1M) has been the main factor leading the company to report losses for the fiscal year.

As in 2023, the complex context of high prices in 2024 also had a negative impact on consumption, which, by the end of the year, fell by -8.1% in Spain, -2.2% in Italy, and -8.2% in the United States.

Despite this, the group’s market shares performed well, reflecting strong commercial execution and the resilience of its brands, increasing by +0.6 percentage points in Spain by the end of 2024, and remaining unchanged in the United States at 13.6%.

Cristóbal Valdés, CEO of Deoleo, highlighted: “The company has faced a challenging year, marked by raw material shortages and volatility, in which our business model has demonstrated its strength. The defense of gross margin, efficient commercial management, operational efficiency, and the leadership of our iconic brands have been decisive in achieving double-digit growth in sales and EBITDA. We begin a new phase with optimism, backed by favorable harvest forecasts for the current year, and with full financial stability, which will allow us as a company to focus on strengthening our strategy to achieve more ambitious goals that will drive our roadmap forward.”

Solid financial indicators

The group closed the 2024 fiscal year with a net financial debt/EBITDA ratio of 3.5x, compared to 4.0x in the previous year. This was made possible by positive cash generation from EBITDA and efficient working capital management. As a result, net financial debt decreased by 4%, and the company achieved a strong cash position of €53M, 72% higher than the previous year.

Last January, the company announced a binding agreement to refinance its debt maturing in June 2025. The negotiation of the documentation for this agreement is well advanced, and the group is confident in closing this process in the coming weeks, and in any case, within the current quarter.

The agreement ensures the group’s financial stability for the next four years. It also has the support of the main shareholders, who will cover any expenses arising from the litigation in Italy. The rating agency Standard & Poor’s has given it a positive assessment in its January 2025 report, also highlighting the company’s strong business prospects from the new harvest and maintaining the company’s debt rating.

Updates on the litigation in Italy

Following the market announcement made last November regarding the customs litigation with Carapelli Firenze, Deoleo has received the formal payment request, which now amounts to €65M, compared to the €89M initially estimated by the company with a cautious approach.

According to the legal advice obtained from its Italian lawyers, the group firmly believes that there are strong arguments supporting a favorable outcome for the appeal. Carapelli Firenze has already appealed the ruling before the Italian Supreme Court and will request a suspension of the payment of the fine in the coming days.

2025: Renewed vision and encouraging forecasts

After the binding commitment reached to fully refinance the group’s debt, the group enters a new phase after two years of industry crisis and faces 2025 with a renewed vision and the goal of strengthening its strategy under the new leadership of Cristóbal Valdés, who was appointed CEO at the end of last year.

Furthermore, the positive shift currently taking place in the olive oil market will support the company’s growth acceleration. In Spain, the 2023/2024 season was very poor, marking the second consecutive year with only 854 thousand tons. In contrast, the ongoing 2024/2025 harvest is estimated to be around 1,400 thousand tons, which represents a 64% growth.

Globally, the latest data from the EU estimates total worldwide production for the 2024/2025 season at 3,390 thousand tons, compared to 2,563 thousand tons in the previous season (+32%).

Regarding the evolution of average oil prices in Spain, according to the Ministry of Agriculture, Fisheries, and Food (MAPA), a shift in trend is observed, with a 52% drop compared to the previous season and a 19.6% decline relative to the average of the last two seasons.