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Miko reports 12% decrease in 1H turnover due to coronavirus’ impact on coffee service

Miko Group

TURNHOUT, Belgium – Miko, the Euronext Brussels listed specialist in coffee service and plastic packaging, posted a decrease in turnover, operating profit (EBIT), operating cash flow (EBITDA) and net profit in the first half of 2020, of 12.51 %, 53.08 %, 19.53 % and 61.99 % respectively.

Group turnover saw a considerable downturn of 12 %. This is linked to the COVID-19 crisis, which resulted in coffee sales to the hospitality sector practically coming to a standstill during lockdown, while the sale of coffee to office-based businesses significantly decreased as people were forced to work from home.

The lockdown affected all our home countries and resulted in a drop in turnover of 29.31 % to EUR 43.6 million. The consequence is that the Miko coffee service department suffered an exceptional deterioration in EBITDA of 57.92 % to EUR 4.4 million.

A substantial offset for the major pressure on sales within the coffee service department was achieved by a rise in sales within the plastics packaging department, and this primarily within the home care and margarine-tubs units, in which several new projects were launched.

Moreover, both plastics units succeeded in gaining a share of general growth seen in the retail market during lockdown. Turnover increased by 7.14 % to EUR 56.5 million. This translates to a healthy increase in EBITDA of 32.09 % to EUR 9.1 million within this department.

Frans Van Tilborg, CEO of the Miko Group: “We have been asking our employees to perform under the most exceptional of circumstances over the recent months. Many were prepared to continue working extremely hard throughout the Corona crisis, while others had no option but to remain at home for reasons of technical unemployment. We must express our thanks to all our colleagues.

The pandemic has also taken its toll on our organisation. We are not in a position to predict the extent of the possible future damage that we might suffer. While we see a clear improvement in sales, now that the lockdowns in our various home countries have been lifted, it is clear that we cannot make any predictions in relation to second waves or the long-term effects on the economy. And that is why we cannot comment on our expectations.

Nevertheless, we will unrelentingly aim to make up for the damages suffered. In line with this, we have not hesitated to implement reorganisations amongst most of our coffee service subsidiaries. Further efficiency-enhancing measures are currently being studied. We went ahead with the relaunch of our Bruynooghe coffee, a brand based in West Flanders, which was restyled and rebranded just before the pandemic.

And we have seen some very favourable responses! We plan to accelerate our current IoT (Internet of Things) and digitalization projects. And COVID-19 will undoubtedly bring opportunities where external growth is concerned… Since our leverage multiple is currently at 1.76, our financial situation remains healthy.”