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Introduction & Market Context
Ebro Foods (BME:EBRO) reported its first-half 2025 results on July 29, showing the company navigating a complex global environment marked by geopolitical tensions and shifting market dynamics. The Spanish food giant saw consolidated sales decrease by 3.0% to €1,533.4 million, primarily due to price adjustments reflecting lower raw material costs being passed on to consumers.
Despite revenue challenges, Ebro managed to improve its profitability metrics, with Ebitda-A growing 1.1% to €212.9 million and Ebitda-A margin expanding by nearly 30 basis points to 13.9%. However, net profit attributed to the parent company fell 10.9% to €97.0 million compared to the same period last year.
The company highlighted that the first half of 2025 was influenced by complex geopolitical situations, including conflicts in Iran, Ukraine, and Gaza, as well as ongoing tensions in the Red Sea that impacted maritime traffic and logistics costs from Asia. Additionally, tariff tensions and fiscal changes in the U.S. led to significant dollar depreciation against the euro, creating headwinds for the company’s export business.
Quarterly Performance Highlights
Ebro’s rice division, which accounts for the majority of the company’s business, saw sales decrease by 3.9% to €1,187.2 million. However, the division’s Ebitda-A increased by 3.3% to €169.9 million, demonstrating improved operational efficiency. The rice segment’s Ebitda-A margin expanded to 14.3%, up from 13.3% in the same period last year.
As shown in the following financial performance table for the rice division:
The pasta division maintained stable sales at €347.1 million but experienced a 5.0% decline in Ebitda-A to €51.8 million. This performance was attributed primarily to declining fresh pasta sales, which were negatively impacted by summer heatwaves. Despite these challenges, the division’s Ebitda-A margin remained strong at 14.9%, though down from 15.7% in H1 2024.
The pasta division’s financial performance is detailed here:
On a consolidated basis, Ebro Foods maintained its advertising investment with a slight increase of 0.6% to €48.2 million, underscoring the company’s commitment to supporting new product launches and strengthening its brands in competitive markets.
The consolidated financial results show the overall performance trends:
Detailed Financial Analysis
Ebro’s debt position increased during the first half of 2025, with net debt rising to €675.8 million, up 18.0% compared to June 2024. This increase includes dividend payments of €110.1 million during the period. Working capital also increased by €31.6 million at constant exchange rates, reflecting the company’s strategic inventory management.
The company’s capital expenditure during H1 2025 totaled €66.3 million, continuing its investment in production capabilities. The debt leverage ratio stood at 31.2%, up from 25.7% in the same period last year, though still at manageable levels.
The detailed debt performance metrics are illustrated in this table:
The return on capital employed (ROCE-A) remained strong at 13.4%, though slightly down from 13.6% in H1 2024, indicating relatively stable operational efficiency despite market challenges.
Strategic Initiatives
Ebro Foods highlighted several strategic initiatives designed to position the company for future growth. In the rice segment, the company noted that sowing forecasts in Spain have materialized positively, with 100% of the rice-growing area cultivated for the first time in four years. This development, combined with robust stock levels of aromatic and South American rice varieties, positions Ebro well for the second half of the year.
The company continues to innovate with new product launches planned for H2 2025, including new microwave and rice-based refrigerated products. Additionally, Ebro’s industrial footprint in the U.S. provides a shield against potential tariff risks in that market.
In the pasta segment, Ebro reported strong performance for its gnocchi products, with Garofalo posting an 11% increase in sales. The company anticipates that a strong durum wheat harvest will lead to lower semolina prices, potentially easing cost pressures in the coming months.
Forward-Looking Statements
Looking ahead, Ebro Foods anticipates a highly competitive landscape in the second half of 2025, with international prices at historically low levels across both Asia and South America. The company expects a bearish market tone for H2, particularly in the rice segment, as aromatic rice prices have dropped compared to the previous season.
As summarized in the company’s conclusion:
Despite these challenges, Ebro expressed confidence in its market position, noting continued strong performance of its brands across their respective markets. The company plans to maintain substantial investment in marketing and advertising to further strengthen its brand portfolio and support new product launches.
Ebro Foods will continue its dividend policy, with the next payment of €0.23 per share scheduled for October 1, 2025, as outlined in its corporate calendar. The company will report its third-quarter results on October 29, 2025.
Full presentation:
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