Tulip Food Company is returning its second-best results ever

Tulip’s owners are pleased with the second-best results in the company’s history in the form of primary earnings (EBIT) of approx. DKK 260 million. There is no doubt that the past year has been characterised by extremely difficult conditions which have put our organisation under considerable pressure. Therefore, I am pleased with the results even though sky-rocketing commodity prices have meant that they are slightly below last year’s record earnings, says CEO Flemming N. Enevoldsen Tulip has been faced with increasing costs of, for example, raw materials and packaging. One by one, competitors in the meat-processing industry have downgraded their outlooks in a year where the ingredients for producing, for example, sausages, bacon and cold cuts reached unseen heights. At the end of the financial year, Flemming N. Enevoldsen stresses that the challenging times are far from being over. Unfortunately, the world market is still in the throes of the economic crisis and characterised by increasing unpredictability. I therefore expect FY 2011/12 to be another difficult year, says the CEO. Adjusting to market conditionsTulip is currently operating in a market where both shops and food companies throughout Europe are struggling to get used to the changing conditions. Many of the commodity price increases are here to stay. This is due, among other things, to increasing demand, especially in China, for the raw ingredients which Tulip uses in large quantities, and this means that we simply have to adjust to new price levels, says Flemming N. Enevoldsen. On the other hand, he is pleased that the company’s growth targets have been met. We have realised our target for organic growth. This is clear evidence that Tulip’s products are still very much in demand worldwide. At the same time, we have focused strongly on streamlining the organisation and cutting costs, and as a result Tulip is now a far more efficient company, explains Flemming N. Enevoldsen. However, the focus on lower costs must be combined with looking at the opportunities offered by the current market conditions. The best strategy is to invest in recessionary times if company finances permit, and if the company deserves the confidence of its owners. We must therefore make the most of the challenges facing every company in the business to further strengthen Tulip’s position, says Flemming N. Enevoldsen. New form of incorporationIn the course of the financial year, the partnership company Tulip Food Company became a limited company (A/S). This has had considerable finance cost and tax implications, so drawing comparisons with last year’s net profit is therefore not easy. The net effect of this step is approx. DKK 53.3 million for the financial year.