Page 19 - PARMALAT 2017 ANNUAL REPORT

With data stated at constant exchange rates and comparable scope of consolidation, obtained by excluding the results
of the activities acquired in 2016 (Parmalat Australia YD and Sadefox) and in 2017 (Silac, Chile and the Karoun group in
the United States), and excluding the results of the Venezuelan subsidiary, the Group’s performance shows that net
revenue held substantially stable but profitability contracted, as shown in the table below:

Constant exchange rates and excluding Venezuela
Year
(amounts in millions of euros) 2017 2016 Variance Varian.%
Net Revenue 6,231.5 6,223.9 7.6 +0.1%
EBITDA 440.5 461.6 -21.0 -4.5%
EBITDA % 7.1 7.4 -0.3 ppt
Constant scope of consolidation, exchange rates and excluding Venezuela

Net revenue grew slightly, rising by 0.1%, with a positive contribution by all of the Group’s sales regions, except for
Latin America.

EBITDA, with data on a comparable basis showed a decrease of 4.5% attributable to all sales regions, Latin America
and North America in particular, except for Oceania.

The reduction of the Group’s profitability is mainly due to a deterioration of the sales mix, with a decrease in the
volume of more profitable branded products. In addition, primarily in the second half of the year, challenging
situations developed in some of the areas where the Group operates, with a negative impact on its performance.
In Latin America, the instability of some economies, coupled with the difficulties faced in highly competitive markets,
Mexico and Brazil in particular, and an increase in the cost of the components of production faced by many of the
Group’s operations, made it impossible to benefit from the results of the reorganization process applied to industrial
activities and logistics and the revamping of the product line.
The North American operations, the Canadian subsidiary specifically, faced increases in the cost of some production
components that could not be offset by adjustments to sales prices. In addition, in the second half of the year, it
incurred nonrecurring costs and difficulties in the challenging process of upgrading its production facilities.
In the Oceania region, the profitability of the local subsidiaries improved compared with the previous year thanks to
the reorganization of manufacturing activities, sales initiative aimed at enhancing branded products and the effect of
a positive market trend.

Report on Operations – Revenue and Profitability 17