La Lorraine Bakery Group (LLBG) achieved a revenue of EUR 1.17 billion, which is a growth of 32% compared to 2021, including the price increase effect. LLBG announced it updated its five-year growth plan, with a projected annual revenue growth of around 10%. The company also aims to become net zero for its own CO2 emissions by 2039, when it celebrates its 100th anniversary.
“We posted a healthy financial result in 2022, thanks to important new investment projects and strong innovations. Despite price increases, we do see pressure on the margins because we are not fully compensating for the important inflationary effects of raw materials, energy and wages,” explains Guido Vanherpe, CEO of La Lorraine Bakery Group. “In the next years, LLBG wants to become a bigger but above all a better company, thanks to our renewed sustainability strategy that goes hand in hand with our deeply rooted entrepreneurial spirit.”
After a difficult COVID year and an encouraging comeback-to-growth year in 2021, LLBG saw exceptional revenue growth by 32%, achieving 1.17 billion EUR.
The EBITDA amounted to EUR 137.1 m, a growth of only 11% due to the escalated inflation of raw materials, energy & services. In 2021, this growth was 14%.
“Although the effects of Covid were mostly neutralized in 2022, the ongoing and unpredictable conflict in Ukraine, the unprecedented energy cost, its impact on raw materials costs, increasing wages and the overall strong inflationary effects, continued to put our margins under pressure. Managing these cost increases as much as possible through price increases has been key to safeguarding the financial health of the company and remaining a trustworthy business partner for our stakeholders,” the company explained in an announcement.
After resuming investments in 2021, 2022 was a record investment year for La Lorraine Bakery Group with capital expenditures of EUR 195 million, to create new capacity with new artisan bakery and sweet-on-the-go production lines. Additionally, the company invested in the construction of new production facilities and warehousing capacity. The larger projects are in Belgium (Erpe-Mere, Oostende), Romania, Poland and the Czech Republic, as well as with Joint-Venture partners in Greece and Italy.
“2022 was yet another challenging year due to the disruptive war in Ukraine, and once again required an enormous effort to ensure the supply of raw materials and to partially neutralize the effects of cost inflation in the market. Putting our Russia plans on hold was an important setback, but thanks to the agility, resilience, and passion of the entire LLBG team we adapted our plans and focused on growth opportunities in other markets. We realized solid volume growth, supported by a never-seen investment in new production capacity and scaling of strong product innovations. Reaching more than 1-billion-euro sales was a symbolic milestone within our ambitious long-range plan”, explains Guido Vanherpe.
The company highlighted its ambition to grow by over 50% by 2027, with a multi-channel presence across Europe and the Middle East. “It’s time to step up, because when it comes to our planet, there’s no time to waste: our future depends on what we do today. Every kilogram of CO2 counts, and it is essential that we decouple our growth from our carbon emissions”, says Vanherpe.
“In 2022 we have made sustainability an integral part of our next five-year strategy, with clear and bold ambitions for 2027 and in 2039, the year of our company’s 100th anniversary, we want to be net zero for our own CO2 emissions. This is also reflected in our new purposeful mission ‘baking a better world together’, ” he adds.
As defined in the newly published 2022 Sustainability report, LLBG has selected 10 company-wide projects to deliver its sustainability ambitions, with measurable targets to track the company’s progress.
2023 mapped out
In 2023, LLBG expects its revenue to continue to grow, driven by its investment program – worth around EUR 200 m – in new production capacity in Western & Central Eastern Europe.
The group EBITDA is expected to grow further thanks to volume and product-mix effects.
The company also expects that it will continue to suffer from decreased margins – as a percentage of revenue – due to the significant inflationary effects of 2022 and their further impact into 2023.
Photo: La Lorraine Bakery Group Facebook