Deoleo held its General Shareholders Meeting today following a key year in which the group completed implementation of its restructuring agreement, regaining financial and equity equilibrium and returning to profit after six consecutive years of losses. The meeting, at which 58.60% of Deoleo SA shareholders were represented, made use of telematic technology to safeguard participants’ health in the light of the continuing pandemic situation.
Shareholders endorsed the performance of the Board of Directors of Deoleo SA and the annual accounts and reports for 2020. They also approved an amendment to the Articles of Association and the Regulations of the General Shareholders Meeting in order to facilitate the same telematic approach in the future.
The Chairman and CEO of Deoleo, Ignacio Silva, outlined the changes the company has undergone in recent months, concluding that “Deoleo is a totally renovated project”. Thanks to low debt, penetration into markets with high growth potential, the strength of its brands and its agility in adapting to new market trends, he said, it “is in a privileged position in the sector, with unbeatable tools to face the future with resilience and offer value solutions for the industry as a whole”.
He stressed that Deoleo began a new chapter in 2020, marked by growth and stability. In addition to recovering financial stability, reducing its debt by more than 60% and achieving more flexible financing terms, Deoleo closed the year with a net profit of 57 million euros terms, a stunning achievement compared to the 11-million-euro loss sustained in 2019.
Silva said the dramatic upswing has been driven by good performance in sales volumes, which did better than the market average in most regions, as a result of which our brands increased their market shares. Measured in terms of sales volume, market shares grew in 2020 in all of Deoleo’s key retail locales. In the United States they increased by 2.8 percentage points, by 1.1 points in Spain and by 0.7 in Italy. Silva said the trend continued in the first quarter of 2021, with 1.1 percentage-point growth in the US and 2.9 points in Italy. It has also been a very positive start to the year for the business in Northern Europe, with Deoleo gaining in France, positioning itself as the second player there, and in Germany, where, after growing 2.2 percentage points, it has achieved a 25% share in the organic olive oil segment.
The factors behind the business recovery were discussed in depth at the meeting, highlighting the strength of Deoleo’s brands and the effectiveness of different commercial strategies implemented in each market. However, Silva also pointed out that increased household consumption, caused by the Covid-19 health crisis and the resulting social restrictions, also had a positive impact on the company’s operating results in 2020.
As announced at the presentation of 2020 results, Deoleo initiated a review of its business plan after its goals were surpassed by the group’s strong performance. Silva said the company is currently working on a redraft and expects to complete it during the third quarter of this year. He said the aim is to adapt the group’s roadmap to changes that have taken place in the market, while keeping its DNA intact. This consists of focusing on brands and quality, responding to the need to improve perceptions of olive oil and keeping the consumer at the centre of all of the group’s strategic decisions.
Strengthened position in the face of the challenges and demands of the sector
Silva emphasised that, as a result of all the changes experienced in recent months, Deoleo is today much better prepared to respond to the demands in its operating environment. This includes a readiness to contribute to the necessary transition towards a more just and sustainable economic and social model.
The group, which is finalising a new sustainability strategy, was very active in the areas of the environment, social impact and good corporate governance throughout last year. In recognition of this work, Ecovadis, the world’s leading sustainability rating agency, awarded the company a gold medal in the environmental sustainability category at the beginning of 2021 and placed Deoleo among the top 5% of the most valued companies in this regard.
This is the most recent recognition received by the company in recent months and confirms the new paradigm for Deoleo, equipping it to bring a long-term vision to strategic management. As Silva pointed out, this is precisely what the market is also valuing, as evidenced by strong share-price performance, multiplying 2.5 times last year following completion of the capital increase, the favourable review by S&P and Moody’s of Deoleo’s credit rating, and publication of sponsored research by Renta 4, which in early May began following the stock with an “overweight” recommendation and a target price of 0.62 euros per share.