2014 Annual Report 49
MANAGEMENT REPORT
Net income for continuing operations amounted to 44.8 million compared with 55.1 million in 2013.
Net income from operations discontinued, sold or in process of sale was insignificant in amount.
Bongrain SA s consolidated net income for the year amount- ed to 39.1 million, compared with 48.9 million in 2013
EMPLOYEES The Group employed on average (including temporary staff and at fully consolidated entities) 19,246 employees in 2014 compared with 18,395 in 2013, a rise of 4.6%. Headcount rose by 1% on a like-for-like basis.
Their deployment by business segment was as follows: Cheese Products: 73.1%; Other Dairy Products: 23.3%; Unallocated employees: 3.6%.
CAPITAL EXPENDITURE The Group s investment in tangible and intangible fixed assets fell by 5.8% in 2014, to 164.4 million compared with 174.6 million (*) in 2013.
Its deployment by business segment was as follows: Cheese products: 53.3%; Other Dairy Products: 41.9%; Unallocated investment: 4.8%.
Acquisitions of subsidiaries amounted to 8.4 million in 2014 compared with 74.4 million in 2013.
RESEARCH AND DEVELOPMENT Bongrain SA has always considered research and development expenditure as key to innovation and thereby to growth of its businesses. Consistently with our business culture and operat- ing principles, development activities are organized into tech- nological divisions in order to meet the specific requirements of each business. They are transversally coordinated and focus on balanced diet and the exploitation of milk s nutritional qualities.
All research and development expenditure is classified by nature and charged to profit or loss as incurred.
FINANCIAL POSITION The Group s balance sheet continues to reflect a satisfactory financial position.
Equity rose by 14.5 million, compared with the 2013, to 1,219.8 million.
The Group s syndicated loan financing was renewed in 2014 for a period of up to seven years. On this occasion the definition of the Group s net debt was modified to exclude the liabilities associated with put options granted to non-controlling inter- ests in the Group s subsidiaries, which are henceforth classi- fied as part of other non-current liabilities since their overall amount is judged material for the Group.
Net borrowings increased by 27.3 million to 470.2 million and represent 38.5% of equity compared to 36.8% as of December 31, 2013.
The financial ratios imposed by the Group s covenants have been respected.
Bongrain SA has no significant exposure to financial market risks. As in the past, its foreign exchange risks are limited by the policy of locating production units close to their commercial markets. Interest rate risks are limited by a policy of prudent hedging.
EVENTS AFTER THE YEAR-END No material event has occurred since the year-end.
OUTLOOK The economic disruption of 2014 may be expected to be attenuated in 2015, but the year is nevertheless liable to be influenced by the end of milk quotas, concentration of retail distributors, the evolution of the world s geopolitical crises and the slowdown in growth in the emerging countries. With- in this context, the Group will continue to adapt by adjusting its organization and continuously improving the value of its brands and the quality of its products. It will continue through- out 2015 to unroll its strategy based on innovation, develop- ment of market shares and improvement of competitiveness.
(*) Data is expressed on the basis of the previously reported figures for 2013 restated for the impact of IFRS 11.