Satisfied to have navigated well in turbulent waters
Solid results, that’s the summary of the 2021 balance for Iceland Seafood International (ISI). Despite not being exactly as expected, with sales reaching €449 million (21% higher than last year) and normalized PBT of €12.5 million (€7.5 million higher than in 2020), their CEO, Bjarni Ármannsson, is satisfied. “The full year 2021 results were overall at the lower end of our expectations, but given the highly volatile and rapidly changing external environment, we are satisfied to have navigated well in turbulent waters”, he says.
Southern Europe division, a key driver of results
Significant sales growth in the Southern Europe division has been one of the keys for those results, but not the only one. Iceland Seafood International’s acquisition policy and the reorganization of their structure in the area have also been successful. All production is now concentrated in one location instead of three, and the reduction in overhead and admin has been fully implemented.
“Our VA-S-Europe division had exceptionally strong results and we are reaping the benefits of the merger between IS Spain and Icelandic Iberica in 2019 as well as the acquisition of Elba in early 2020. This has created a strong entity that really shined in 2021 being a key driver for majority of the group profit generation. Similarly, our S&D division had its best year ever resembling the group’s strong position in trading and its long-term relationship with suppliers, especially in Iceland”, Ármannsson explains.
Moreover, the addition of Spanish company Ahumados Domínguez will further strengthen their position in the retail market and create a platform for the sale of high-quality cod products from Iceland under a strong consumer brand. Bjarni Ármannsson explains: “Our investment in Ahumados Dominguez at the end of Q3 last year was a milestone in having a premium brand in Spain, our key market in smoked salmon products, one of our key categories”.
Problems and delays in the UK
That good performance in the Southern Europe division was also seen in Ireland, where sales were up 8% like-for-like from 2020. The Irish operation was well prepared for Brexit from the beginning of the year and was, therefore, in a better position to serve local customers than UK suppliers.
And it is there, in the United Kingdom, that Iceland Seafood International encountered the biggest hurdles last year. The integration process following the merger of IS Barraclough and Havelok in the UK is proving more complex and costly than expected. Brexit, Covid 19, but also disruptions and cost increases in several supply chains, plus a difficult labor market, are gravely affecting the whole process. The company has taken steps to strengthen the local management team and later this month, Glen Mathews, former Hilton/Icelandic Seachill production manager, will join the company as managing director.
“We highly welcome Glen Mathews and have high expectations of him and the management team in the UK. We believe that in the long term, we’ll be well positioned and that our investment will result in a strong market position for the future in UK retail and foodservice”, ISI’s CEO states.
Challenges are there, but Bjarni Ármannsson, is optimistic: “Looking towards 2022 we are mindful of current challenges, but see good opportunities in the market”.