Deoleo shareholders endorse next stage aimed at stability and growth
Deoleo resolves financial situation, returns to profitability on positive business dynamics
Ignacio Silva, Chairman, CEO, calls for premium quality in olive oil category to consolidate Spanish leadership in the industry
Silva recognises team’s commitment and professionalism throughout Covid-19 crisis in enabling Group to continue offering ‘essential service’ amid severe challenges
Deoleo held its first Annual General Meeting today since completing its restructuring process last June. The meeting, in which 58,382% of the share capital of Deoleo, S.A. was represented, complied with all safety measures and restrictions in force, and shareholders were able to participate by online means.
The Meeting approved the Board of Directors’ management and 2019 annual accounts for Deoleo, S.A. Shareholders also approved, by a large majority, several proposals aimed at adapting the company’s corporate governance to its new situation.
Deoleo Chairman and CEO Ignacio Silva highlighted during his speech that the group’s situation has changed radically since the last shareholders meeting in January, when the restructuring agreement reached between Deoleo and its lenders was approved.
During the first half of the year, Deoleo completed execution of this agreement, which allowed the company to begin “a new chapter, looking to the future with calm and optimism”, Silva said. He stressed that Deoleo’s financial situation has been completely resolved. The Group reduced its debt by 66% – to 190 million euros – at the end of the first half of 2020, and has net equity of 400 million euros, offering the stability needed to focus on executing its long-term project.
Silva said Deoleo has a “clear and proven” roadmap, as demonstrated by the business recovery observed since 2019, which accelerated at the beginning of this year. In the first six months, the group returned to profit for the first time in six years, and at the end of June, earnings came to 16 million euros, excluding the extraordinary impact of the restructuring process. Taking the effect of this process into account, net profit increased to 251 million euros.
Chairman Silva explained to shareholders that the figures prove Deoleo can rely on a solid base to sustain medium- and long-term growth thanks to the commercial strategy and measures adopted in recent years. Although the increase in household consumption due to the Covid effect has helped to boost olive oil sales, Deoleo had already observed growth in the months prior to the pandemic. In fact, Deoleo volumes increased by around 17% in January and February,
The pace of recovery in sales, which have grown above the market average in basically all business units, allowed Deoleo to widen the gap ahead of its competitors. In North America, the company increased its market share by 3.1 percentage points in the first half of the year, while in Spain, a more mature market, the share increased by 1.7 points.
Leading the transformation of the olive oil industry
However, Silva recalled that Deoleo is at the beginning of this new stage and remains prudent with regard to the challenges the company will have to face in the future. He signalled the need to attach a high premium to the olive oil category, ensuring that quality is preserved throughout the value chain. Deoleo is convinced that this is an essential requirement to consolidate Spain’s leadership in the industry. This is a very demanding challenge that Deoleo is prepared to lead by acting with honesty and integrity, he said. However, Silva recognised that the whole sector will need to work in a coordinated way if this objective is to be achieved.
Another major challenge in the short and medium term will be how companies and the industry adapt to the changes that the Covid-19 crisis could bring about among consumers. Silva expressed pride in how the company has responded over these months and thanked his team for its commitment and professionalism. However, he acknowledged that uncertainty remains high, which makes it difficult to anticipate the real effect this situation will have on the industry. He called for unity and responsibility on the part of institutions, economic agents and citizens in order to protect society’s health and safety, while providing the necessary tools to minimise the economic impact and boost recovery.