JBT Foodtech profits slump as demand ebbs in Europe and North America

By Rory Harrington

- Last updated on GMT

Related tags: North america, United states

JBT Foodtech profits slump as demand ebbs in Europe and North America
JBT Corporation said its food operations had experienced a tough year as restructuring costs combined with a fall in demand for processing equipment to drive down profits.

Operating profits for JBT in both the quarter and full year slumped. Q4 operating profits plummeted 28% year-on-year to US$14.4m (€11m) while the full year figure fell 25% to just over $42m, it added.

Fourth quarter revenues for the three months ending 31 December 2011 for its FoodTech division were not as weak – but still dropped 4% to US$151m - mainly on falling demand for freezing and protein processing equipment sales in Europe and North America, it added.

This downturn had been partially off-set by the shipment of a large fruit processing product line and favourable aftermarket volume in the quarter, said the firm.

Restructuring

The firm also posted $10.3m restructuring costs following a streamlining of operations in Europe and North America.

In January, JBT announced that it would be cutting 115 jobs and shifting some operations out of Europe in bid to make annual savings of US$9m by the end of next year.

The strategy means the relocation of certain operations from Sweden, where overhead costs are higher, to lower-cost regions to boost its profit margins.

The move will see it transfer the manufacturing of certain freezer product lines from Sweden to North America and China to better address local market needs and tackle currency impacts in the Scandinavia country.

The shake-up will also involve the reducing its batch sterilization equipment production footprint to “reduce presence in higher cost regions”,​ said the firm.

Mixed results

The company’s AeroTech unit performed better with both full year revenues and operating profits increasing.

JBT Corp said its full year operating profits for both units were $78m compared to $84m in 2010.

“We ended 2011 with mixed results,”​ said JBT chairman and CEO Charlie Cannon. “We were pleased with the strong performance of our AeroTech segment in the year. However, economic uncertainties across key markets in Europe and North America and foreign exchange headwinds impacted FoodTech performance in the year."

 

He added: “We undertook significant strategic actions in 2011 to reduce costs with the goal to improve the long-term margin profile of this segment.”

Related topics: Processing & Packaging

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