Higher costs water down Spadel profits

Belgian water group Spadel has had a good year with a double-digit sales increase, but raw material costs – which rose by almost half – eroded its profits. That will not change this year either, the bottler estimates.

Costs continue to rise

Spadel closed the first half of the year with an 11.2 % increase in turnover and managed to increase its market share in every market. After the sales dip due to the pandemic, volumes have started to grow again. The water producer also launched a number of innovations, such as a new range of soft drinks in the Benelux. In Belgium and Luxembourg, sales rose by almost 10 %, in the Netherlands by 10.5 %, but the biggest growth came in Bulgaria with over 24 % more sales.

On the flip side of the coin, the costs of raw materials rose by 42 % compared to a year earlier, while all ‘inputs’ became 17 % more expensive on average. Higher prices and a savings plan could not sufficiently compensate, and as a result, operating result (EBIT) fell by 33 %.

For the rest of the year, the group anticipates a continued increase in sales figures, but also a continued decline in the operating result – as costs continue to rise. Finding a balance between rising raw material prices and retail prices will be a major challenge in the coming months, says the Spa bottler warned.