Annual results: Vion transformation on track

In 2023, Vion made a decisive move to become the most
sustainable protein company in Europe. The company is committed to building data-driven sustainable supply chains, ensuring that both customers and farmers can achieve their ESG (Environmental, Social, Governance) goals.

Vion has chosen to divest its German operations and focus on strengthening its activities in the Benelux region. Throughout 2023 and into 2024, Vion divested loss making units and succesfully sold other units in Germany.

The successful Change that Matters programme, which began in 2023, will be completed in the months to come, with the full impact expected by 2025. The costs associated with this transformation have impacted the company’s net results.

A new management team will drive the vision forward, ensuring Vion’s leadership in sustainable, responsible food production.

Key financial messages (1):

• Vion increased its turnover from continuing operations by 3.5% to EUR 5.1 billion which was primarily driven by high pig prices in the home markets. Sales volume fell by 6.9% mainly due to Vion’s limited export capabilities resulting from these high prices.
• Normalised EBITDA increased from EUR 67.4 million in 2022 to EUR 74.7 million in 2023.
• Normalised EBIT for 2023 stands at EUR 11.9 million (EUR 0.5 million in 2022).
• Impairments and restructuring costs to support our transformation amounted to EUR 38 million (EUR 58.2 million in 2022).
• Results from discontinued operations (loss making sites in Germany) amounted to EUR 49.5 million (EUR 28.7 million in 2022).
• The company reports negative net results for the year of EUR 89.7 million (2022: EUR 108 million). These results include transformation costs and losses of discontinued operations.
• Market risks like lower herd sizes, strong pricing fluctuations and animal diseases together with timing of German divestments continue to be a risk for managing going concern.
• Management mitigates the risks through the Change that Matters transformation programme, divestment of German assets and refinancing Vion.
• In 2023, the Change that Matters transformation programme generated improvements exceeding EUR 90 million, driven by over 300 initiatives across the whole company.
• Closing of the Germany divestment transactions in 2025 will give Vion the opportunity to refinance in line with future needs.
• Liquidity and solvency metrics remained adequate with higher pig and beef prices creating a larger-than-normal impact.

(1) 2023 financial statements were impacted by discontinued operations in Germany. For comparison purposes, Vion also reclassified the 2022 financial numbers of discontinued sites.

Intense competition in the global pork market from the USA, South America and China, combined with political and regulatory challenges in the European agricultural sector, inflation, shifting consumer preferences, and other factors, have led to structurally reduced exports outside the EU, shrinking herd sizes in Northern Europe, and elevated animal prices within the EU.

As announced earlier this year, Vion is shifting its main strategic focus towards advancing welfare and sustainability standards in collaboration with farmers, customers and partners in the Benelux region. Strengthening relationships with retail and food service clients across Europe will allow Vion to expand its downstream processing and enhance value-added products and services. This will reduce exposure to the volatile global commodity export market. The goal is to become Europe’s most sustainable protein company, providing both animal and plant-based proteins.

Despite challenges, Vion’s ‘Change that Matters’ transformation programme generated over EUR 90 million from 300+ initiatives. This programme aims for an annual improvement of EUR 150-200 million by 2025, enhancing efficiency and resilience.

“With a leaner and more focused organisation, we will be better positioned to channel our investments into data-driven chains, sustainability and animal welfare, which remain at the core of our strategy. This will not only strengthen our operations but also create a lasting positive impact on the entire chain,” says Ronald Lotgerink, CEO of Vion Food Group.

Ambition: Climate-neutral by 2045
In 2023, Vion made progress in reducing emissions and advancing sustainability. The company validated its Science-Based targets and created specialised teams to focus on climate-impact reduction.

Vion also focused on expanding its blockchain-driven data infrastructure, connecting pig farmers to improve the accuracy of carbon footprint calculations. Vion increased the number of connected Dutch dairy farmers significantly. As part of its scope 3 emissions strategy, Vion included greenhouse gas emission requirements in its code of conduct that will be part of the supplier evaluation.

New Management Team
As part of its ongoing transformation, Vion establishes a new management board, effective at the start of next year. Tjarda Klimp, currently CFO, will step into the role of CEO, while Mattijn Bak, currently Chief Transformation Officer (CTO), will assume the position of CFO. Additionally, Leon Cuypers, the current Chief Operating Officer (COO) for Benelux, will continue to lead Vion’s operational business in the company’s core focus region as COO.