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Tayto maker bags €94m as appetite for snacks grows

Group sales at Dusseldorf-based Intersnack hit a record €2bn last year, beating its own expectations.


The increase in revenue was mainly a result of organic growth

The increase in revenue was mainly a result of organic growth

The increase in revenue was mainly a result of organic growth

German-owned Largo Foods, the maker of Tayto crisps, saw its revenue rise last year to €94.6m as it benefited from a solid performance by the brand, and ranges sold under the Hunky Dorys name.

But the revenue rise was modest. The figure for the year was just 2.7pc higher than the 2016 figure.

Dusseldorf-headquartered Intersnack said its Irish arm, which has a manufacturing base in Kilbrew, Co Meath, was lifted by sales of Tayto, KP, Hunky Dorys and O'Donnell's snacks.

"This enabled the company to reinforce its excellent position in the slow-growing Irish snack market," it added.

Intersnack also owns the Hula Hoops brand. The group has wholly owned Largo Foods since 2015, having first acquired a stake in the business in 2011.

The Irish company was founded by Ray Coyle, who continues to own the successful Tayto Park amusement park next to the crisp factory in Co Meath.

The Intersnack accounts note that the goodwill acquired in 2011 for Largo Foods is amortised by €2.3m a year over a useful life of 15 years.

Intersnack's group net revenue rose 4pc to just over €2bn last year. It's the first time that its revenue exceeded the €2bn mark. Its earnings before interest, tax, depreciation and amortisation (ebitda) were 4pc lower at €168.5m, while net income was 34pc lower at €34.6m. The consolidated result fell as increases in fixed costs and higher taxes significantly offset margin growth that arose from the "considerable rise in brand business", said Intersnack.

The increase in revenue was mainly a result of organic growth, and some positive impact from acquisitions. Intersnack has about 10,000 workers, including more than 3,300 who are directly-employed by the group.

This year, Intersnack bought the UK-based crisp company Tyrrells from Hershey, while it also acquired a 25.1pc stake in Spanish snack-maker Grefusa.

The German group's revenue growth in 2017 exceeded expectations, while volume growth met forecasts, according to Intersnack. The volume of snacks sold during the year rose 4.9pc to 511,500 tonnes, due to volume increases in the UK, the Netherlands, and central and eastern Europe.

Operating cash flow plunged to €71.9m last year from €169.9m the year before, primarily as a result of a decline in trade payables and other liabilities, according to Intersnack. The company said the decline was not as bad as had been expected.

The group was also hit by foreign exchange fluctuations, taking a €40.3m hit last year due mainly to the strong devaluation of sterling versus the euro. In 2016, Intersnack took a €27.3m hit due to currency movements.

Management expects Intersnack's sales to rise 5pc this year, and overall revenue to be 6pc higher, with a corresponding increase in gross profit.

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"Uncertainty still prevails especially regarding the impact of currency effects arising in connection with Brexit," it noted.

The group generates sales in a range of currencies from its operations across Europe, including euro, sterling, Swiss francs, Norwegian krone, Romanian leus and Ukrainian hryvnias. It also has a presence in Asia, in countries including India, Vietnam and Singapore.Intersnack has 31 production plants in 14 countries.

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