Ferrero profits rise 14% as it grows in emerging markets

By Oliver Nieburg

- Last updated on GMT

Rising presence in developing nations drives Ferrero sales gains in fiscal 2014. Photo credit: Zoha Nve
Rising presence in developing nations drives Ferrero sales gains in fiscal 2014. Photo credit: Zoha Nve

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Ferrero has reported a before tax profit rise in fiscal 2014 driven by a growing presence in Brazil, Russia and countries in Asia.

The Italian company said in a release that group sales were up 3.9% on the previous year to €8.1bn ($8.8m), while before tax profits rose 14.2% to €907m ($989m).

“Despite the difficulties faced internationally, this growth is the result of an extraordinary dynamism in the development of new markets: the sales of Ferrero products have matched and in some cases even improved from previous years’ results in Asia, Russia, United States, Canada, Brazil, Mexico and Turkey. The markets of the Middle East are also in a phase of strong growth,” ​it said.

The group also reported good growth in its core markets of Germany, Poland and the UK, but its business in the main Southern European markets was stagnant or slightly down due to the economic crisis.

Getting the balance right

Ferrero is the world’s fourth largest confectioner with a 5% share behind Mondelēz, Mars and Nestlé, according to Euromonitor International.

Jack Skelly, a food Analyst at Euromonitor, recently said Ferrero had successfully balanced growth between developed and emerging countries. He said the company grew sales in Russia and China over the past five years by $600m and still achieved value gains of $550m in developed markets such as France, Italy and the US.

Brand performance and investments

Ferrero said in its release Nutella and Tic-Tac were doing well, but it highlighted rising volumes for Kinder Joy (+29%), Kinder Bueno (+10%), Kinder Surprise (+9%) and Ferrero Rocher (+6%).

The firm made €537m ($585m) in new investments during the year predominantly to strengthen production in Germany, Canada, Italy India, Brazil, Mexico and China.

ConfectioneryNews reported earlier this month​ that Ferrero was planning its first confectionery factory in China to heap pressure on market leader Mars.

The company's CEO recently said the firm "is not and will not be up for sale"​ following speculation after the death of owner Michele Ferrero in February.

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