AMSTERDAM — During a capital markets update for analysts and investors, Corbion management outlined its “Advance 2025” strategy development and introduced updated targets for 2024-25.
One major initiative includes the company’s restructuring program, designed to accelerate free cash flow. Since the restructuring was announced in October 2023, its focus has revolved around adjusting Corbion’s organizational structure to reduce complexity, enhance focus and expedite decision-making, according to a press release from the company.
“I am pleased to report a 2023 full-year outcome in line with what we indicated in October of last year,” said Olivier Rigaud, Corbion CEO. “This performance was realized in a challenging geopolitical and macro-economic environment. Although we see a sequential improvement in some of our key markets, we have embarked on a restructuring program designed to achieve significant free cash flow delivery and enabling leverage reduction.”
To achieve those goals, Corbion has transitioned from three business units to two: Health & Nutrition and Functional Ingredients & Solutions.
The Health & Nutrition unit will combine Corbion’s nutrition, pharma and biomedical polymer capabilities, allowing it to focus primarily on high-growth and high-margin market segments. Under the Functional Ingredients & Solutions unit, Corbion will integrate food, biochemicals and lactic acid to emphasize growth, enhanced operating efficiencies and mix improvements to maintain its foothold as a global supplier of ingredient solutions for food manufacturers including commercial bakeries. This unit will encompass about 81% of Corbion’s core portfolio, with 76% of that dedicated to food.
“We have developed a simpler, more efficient and focused organization consisting of two business units and will implement appropriate measures to deliver annualized cost savings of around €55 million,” Rigaud said.
“Modern business must adapt to remain relevant, and that is exactly the shift Corbion is taking on” — Jennifer Lindsey | chief marketing and digital officer, head of transformation | Corbion
Moving into the transition phase, execution of the programs identified during the restructuring will be led by Jennifer Lindsey, the company’s chief marketing and digital officer and head of transformation along with a transition team, to identify efficiencies and best practices working end-to-end throughout the global Corbion organization.
“It is no secret that today’s global business environment is constantly changing,” Lindsey said. “Modern business must adapt to remain relevant, and that is exactly the shift Corbion is taking on. Agility in execution, identifying areas of opportunity to change, to challenge, to leverage our core competencies and interdependencies for the benefit of our customers, the markets we serve, and our employees is where we are focused.”
In addition to streamlining its business units, Corbion is also centralizing supply chain and R&D functions and conducting a comprehensive review of operating expenses, capital programs and working capital.
Looking to the year ahead, Corbion anticipates the volume/mix growth to be approximately 2% to 6% and driven primarily by growth in the Health & Nutrition unit and upward momentum in the food sector.
Corbion’s adjusted EBITDA organic growth core activities is projected to be greater than 15% for the full year. That number excludes the estimated full-year EBITDA impact following the divestment of its emulsifier business in January.
“The recent announcement of the disposal of our emulsifier business not only completes a strategic realignment of our portfolio,” Rigaud said. “But it also contributes to bolstering the balance sheet.”
For more information on the restructuring and “Advance 2025,” visit the Corbion website.
