Vion made a loss of almost €90 million last year, according to the annual figures that were finally published today after months of delay. Vion's management claims high and low that better times are on the way after the announced departure from Germany, but must also acknowledge that there are risks that threaten the continuity of the meat company that has been plagued for years.
A bright spot in the figures is that they are less negative than a financial year earlier: In 2022, the loss amounted to €108 million, in 2023 this has dropped to just under €90 million. Of this, €38 million can be attributed to exceptional impairments and restructuring costs related to the departure from Germany. The German divestments should help plug the leak at Vion, so the idea is.
Although buyers have been found for various German locations, Vion is still far from there. The company openly states that there are risks to the continuity of the company. This includes a decrease in the livestock population and animal diseases. These factors will continue to hang over the market when Vion is no longer active in Germany. African swine fever could also suddenly appear in the Netherlands today or tomorrow. The Dutch pork sector would then immediately lose access to export markets outside Europe, with all the consequences that entails. The shrinking livestock population is also mentioned as a risk. In view of various termination schemes (Lbv and Lbv-plus), it is also difficult to estimate how hard the Dutch pig population will be hit in the coming years. According to Vion CEO Ronald Lotgerink, the shrinkage has been faster than expected in recent years.
Solvency almost in danger zone
Furthermore, Vion states that the liquidity and solvency ratios have remained adequate. In 2022, these terms were also used, but solvency fell by 9 percentage points to 30,8%. In 2023, this has fallen further to 26%. In fact, Vion is not yet in the danger zone, but given the decline in recent years, this is about to happen if things do not change quickly. In 2020, solvency was still 46%. Shareholder ZLTO does not seem to have enough capital to step in if things go wrong.
In the coming years, Vion will focus on further cost savings. The goal is to save €150 to €200 million next year. It was recently announced that almost 200 jobs will disappear. The effects of the reorganization plan will be visible in the results from 2025, Vion promises. Vion also expects to be able to refinance loans, with which the company believes it can limit the risks regarding continuity. The recent interest rate decreases are not bad in this respect, although lenders will nevertheless demand high rates given the vulnerability of the company.
New management
Under a new but familiar management, Vion is trying to find more stable waters in the coming years. It was recently announced that CFO Tjarda Klimp will succeed Ronald Lotegerink as the person ultimately responsible next year. The position of CFO that will then become available will also be filled internally.