Ebro Foods: The Dividend King of Spain
Global growth, steady dividends, and hidden value?
When thinking of Spain, most investors picture vibrant beaches or iconic companies like Inditex (Zara’s parent company) or Banco Santander. However, there’s a less glamorous but equally compelling player in the Spanish stock market that deserves attention—Ebro Foods. This Madrid-based food giant is a standout, not only for its robust fundamentals but also for its unique dividend policy, which diverges from the norm in Spain and globally. Let’s dive deeper into what makes this €2.43 billion company tick and why it’s worth a closer look.
Ebro Foods is the result of a strategic transformation that began in 2000. By shedding less profitable businesses like dairy and sugar and focusing on core strengths, Ebro emerged as a global leader in rice production with a strong position in premium and fresh pasta. This success is driven by a growth model anchored in R&D and product innovation, efficient raw material sourcing, and a balanced strategy of mergers, acquisitions, and organic growth. Today, Ebro stands as a testament to the power of strategic focus and adaptability.
What Does Ebro Foods Do?
Ebro Foods specializes in the production and distribution of rice, pasta, and premium convenience foods, generating revenue primarily from these two staples:
Rice accounted for 79% of total revenue in 2023.
Pasta contributed the remaining 21%.
The company operates in over 80 countries with a diverse portfolio of more than 80 brands, including household names like Tilda, Garofalo, Brillante, Carolina, and Mahatma. Despite its Spanish roots, Spain contributes only 7.7% to Ebro’s revenue. Its global revenue breakdown highlights the company’s geographic diversification:
Europe: 36%
Americas: 33%
Rest of the World: 23%
This diversification and focus on branded, high-margin products provide resilience to market fluctuations, making Ebro a dependable choice for investors.
Quarterly Results: Resilient and Growing
Ebro Foods’ latest quarterly earnings, reported on October 30, 2024, reflect the company’s sound strategy and operational strength.
Net Profit: €169.2 million, up 20.8% year on year.
Adjusted EBITDA: €308 million, up 8.3%, driven by strength in the Pasta Division.
Revenue: €2,346.8 million, a 1.7% increase, despite price adjustments in key markets to support consumers.
Net Debt: €511.3 million, down €59 million from year-end 2023, even after paying €114 million in annual dividends and investing €100.7 million in CAPEX.
For the full year, Ebro forecasts an adjusted EBITDA of €402–407 million, reflecting the success of its business focus on value-added categories and operational efficiency.
Core Business Highlights
Rice Division
The Rice Division remains the company’s backbone, posting a turnover of €1,837.4 million and an adjusted EBITDA of €241.4 million. Notable achievements include:
Global brand strength: Carolina® and Mahatma® in the U.S. and Tilda® in the UK, Australia, and the Middle East, all seeing strong growth.
Favorable raw material conditions, particularly in the U.S., where early harvests signal lower prices.
Pasta Division
The Pasta Division posted a turnover of €512.4 million and an adjusted EBITDA of €79.4 million. Key highlights include:
Premium growth: Garofalo achieved 16% global growth in premium pasta.
Fresh pasta success: The Lustucru launch in France and Olivieri’s performance in Canada drove fresh pasta growth.
Raw material prices: Durum wheat semolina prices are expected to fall, though potato flake prices may rise due to poor harvests in northern Europe.
Why Is Ebro Unique?
1. Tri-Annual Dividend Payments
Ebro Foods pays dividends three times a year, a rarity not only in Spain but globally. Just last week, the company announced its 2025 dividend plan: