Welcome to the audio conference call everyone. It is now 2:00 P.M., so no more participants waiting to enter the call. With that said, I hand over to Daniel, our CEO.
Thank you very much, Milena. Good afternoon, ladies and gentlemen. I would like to welcome you to today's analyst and investor call on the 2021 half year results of the ORIOR Group. With me here in Zurich are Andreas Lindner, CFO of the ORIOR Group, and Milena Mathiuet, Head of Corporate Communication and Head of Investor Relations. We will start on page four with the CEO statement. In the overall context of the reporting period, which continues to be influenced by COVID, we can look back on a good half year 2021. We succeeded in significantly improving the results. At the same time, we were able to initiate important improvements within the strategic key initiative ORIOR New Normal, and launch a long-term sustainable and important project with the expansion of the plant-based production capacities.
Sales growth was at 1.6%, comprising organic growth of 0.9% and a positive currency exchange rate of plus 0.7%. The Convenience segment achieved above average growth driven by all competence centers, and with the exception of Casualfood, the International segment also grew very well. In contrast, the Refinement segment performed slightly less well than the weaker performance we had expected. Another negative driver was the entire food service segment, as well as travel gastronomy. On the one hand, due to the 2020 basis of comparison, which still includes the first months of normal operations pre-COVID, and on the other hand, due to the delayed recovery that we have now been feeling since June in both travel gastronomy and the food service channels. EBITDA increased by a good 32.3% to CHF 31.1 million, which corresponds to an EBITDA margin of 10.6%.
The main factor for this strong increase is the growth with high margin product segments. Another positive driver is the flexibilization of cost and processes, the new financial framework of Casualfood, and the aid and support payments we had received mainly from Germany. In the first half of 2021, we were able to launch as well as implement numerous initiatives and measures along the ORIOR 2025 Strategy. Here are a few examples. An important strategic step is the investment, as already mentioned, in the expansion of our plant-based production capacities. I will talk later again about this in detail. Within the plant development, we will integrate the raw ham production site from Prodor into the main Rapelli plant in Stabio, thus further increasing processing cost efficiency. The implementation work has been started, and we expect the integration to be completed by the second quarter of 2022.
A lot is happening in the area of sustainability and ESG. Some highlights from the first half of the year are listed here. The third GRI sustainability report was published at the beginning of May. We have switched to sustainable hydropower in Switzerland, and thus not only achieved our 2025 target, but also significantly exceeded it. We comprehensively revised the existing code of conduct with a view to the current requirements, and in this context, also decided to introduce a group-wide complaints management system. In addition, we participated in the CDP program for the first time, which gives investors detailed insight into our efforts and our contribution with regards to the climate. We turn to page number five, please. This revenue curve shows the organic growth of the ORIOR Group compared to the first half of 2020.
It is important to note that the first half of last year started with 2.5 COVID-free months. Our sales developed positively until the lockdown by mid of March. Special mention should be made to Casualfood , which recorded a good sales performance in that period. The half year 2021, on the other hand, is entirely COVID dominated, with a negative impact on sales until mid of March. In March and April, we then had the positive effects due to the lockdown one year ago. The peak in March and the leveling off in April is also influenced by the cross-month effect of the strong Easter business. This year, sales were almost entirely March.
Last year, most of sales were in April. In May, the next corona loosening took place and thus normalization of the retail business began, while the slow recovery of the food service area and travel gastronomy started in June. In total, organic growth was at +0.9% in the first half of 2021. Excluding Casualfood, which was hit the hardest, ORIOR Group's organic growth was at good 3.1%. We turn to page number six. Our setup is characterized by the decentralized competence center philosophy, which is supported by autonomous and regionally deeply rooted companies with their own product and brand worlds. This creates proximity to the market and makes the individual competence centers, which specialize in their product categories, fast and agile. We realize joint added values and efficiencies through our group-wide strategic key initiatives, ORIOR New Normal, the ORIOR Champion Model, or the ORIOR Bridges.
Our positioning has not changed in the first half of 2021. As part of our continuous plant development, we are constantly working on optimizing our structures, processes, and costs. Against this background, the integration of the raw ham production at Rapelli was also tackled. At the same time, we are investing in sustainable modernization, also in favor of sustainability aspects and in future-oriented product ranges, such as the mentioned expansion of our plant-based production capacities. The acquisition of the fourth and final branch of Casualfood is scheduled for autumn 2022. Page 7. With the next two slides, I would like to introduce you to the world of veggie or vegan or plant-based as it is called today. These categories have been growing steadily for many years and have gained additional momentum with the increasing awareness of sustainability issues and also with corona.
ORIOR, namely the competence center Fredag, has been developing, marketing, and distributing plant-based specialties for over 25 years. In 1995, Fredag was probably the first company in Switzerland to list a meat analog product. At that time, veggie and vegan or plant-based was still an absolute mini niche, and Fredag was one of the only producers. Today, this market is divided into three categories, all of which are growing strongly. These categories are the meat analog products with formats such as burgers, nuggets, sausages, or Geschnetzeltes, that's like mince. The second is the vegan and vegetarian specialties with products such as vegetable medallion, vegetable schnitzel, or vegetable burgers, so a lot work with vegetable and plants. The last, the third category, is tofu in all its creation.
Fredag is represented in all three of these categories and has continuously refined and developed its products and is now very well-positioned with a comprehensive range, thanks to a high level of innovation, thanks to various technologies in its own factories, a production in the heart of Switzerland, and thanks to high-quality raw materials. Fredag serves the entire retail sector as well the food service channels in Switzerland. A small but rapidly growing share is also exported abroad into Europe. Sales of meat analog products have increased strongly in the last four to five years. An important driver of this is certainly that not only vegetarians and vegans demand these products, but also increasingly the so-called flexitarians. The basis for the production of meat analog chicken and pork and beef products is the wet extrusion technology, as this is best suited to produce a texture and fiber analog to meat.
Fredag has a long-standing expertise in this area and has been able to benefit from this upswing. Today, we produce in wet extrusion in three shift operation and thus achieve the best possible utilization and productivity. In order to sustainably ensure delivery readiness in this strongly growing category across all channels in the future, we are investing in new, fully equipped wet extrusion lines. The expansion of production capacities will be commissioned by Q1 2022. Page eight. This page gives you an impression of Fredag's broad assortment and current presence in the plant-based market. In addition to the range under our own brands, such as Nature Gourmet, Happy Vegi Butcher, or Noppa's. We produce a wide variety of products for our customers under their house brands. For example, Cornatur or Délicorn or Karma or V-Love, all brands from major retailers in Switzerland.
The food service sector has also been growing for years. Not only the classic gastronomy, but also leading plant-based specialty restaurants such as Hiltl or tibits using our products. Another important element, especially for sales beyond the Swiss border, are the strategic partnerships we are building up and that we are expanding. For more than two years, Fredag has been the leading partner of the startup Plant Meat Limited with its brand, THIS, which very successfully sells the product bacon, that's a bacon, nuggets, and also the minced chicken in Great Britain. Another important and promising partnership has Fredag with the startup Arley, which offers cross-category products such as meat analog, vegan liquid egg, or milk under their Arley Group . The official marketing of the products under THIS brand will start in autumn 2021. We move to page number nine, please.
Our breadth and diversification in categories, in sales channels, customer portfolio, and geographic market coverage makes us resilient. All three ORIOR segments and all competence centers within these segments contribute to the resilience and are important to ensure stability across the whole group. The foil share, which is around 27% today, will grow over 30% as Casualfood continues to recover. We are convinced that this positioning and structure and the strength that comes from it will help us or will be the basis for the further successful development of the ORIOR Group in the coming years. We move to page number 10. During the acute phase of the crisis, the ORIOR New Normal initiative helped us to move forward systematically and consistently focused on priorities. It is an essential pillar of many positive impulses on our development over the past one and a half years.
We have mastered phase 1 and phase 2 very well. The focus is now on the leadership mindset and the remaining three phases. To strengthen the leadership mindset, we have initiated the following measures. We have strengthened the principles of our leadership and consolidated them in the organizational regulations, in the code of conduct, and in internal regulations. We implemented the ORIOR Employee Share Ownership program for the 5th time, giving all key employees the opportunity to participate in ORIOR's success. A long-term incentive plan was also introduced for top management, and at the end of August, we will launch the ORIOR Campus, our internal training and development program. In phase 3, we worked consistently on creating a new lower cost base.
The sustainable flexibilization of costs and processes, as well as the new financial bases of Casualfood are central and supports the improvement path quite significantly since last autumn. In shared services finance, we have already implemented accounts receivable and accounts payable in two units, with another four units in the pipeline. In addition, we have introduced digital workflows in the area of accounts payable in the majority of the Swiss units. Another important part of the new basis is the ongoing work on our plant development. In this area, as mentioned at the beginning, we have started with the integration of Prodor into the main Rapelli factory. Phase 4 is about the new growth opportunities due to changing market and consumer needs. We call this phase new horizons. A few comments on this. We opened our Smartseller flagship store in Ljubljana by mid-June.
This is a milestone in the still very uncharted venture between Casualfood and the Heinemann brothers. We are convinced that many small to medium-sized airport operators will take a look at this concept on site and will be convinced by the unique business model. Another example are the e-commerce projects. The Albert Spiess webshop was further developed and is now also available for Spiess Europe. Under the Happy Vegi Butcher brand, we will launch webshop this week, and the Biotta range at brack.ch was successfully launched. We move to page number 11. ORIOR sustainability or ESG is very important to us. The issues we address in this area are constantly increasing in importance from all sides. On the one hand, the market, especially customers and also consumers, and on the other hand, suppliers and partners. We are also noticing an enormous wave of ESG awareness in the entire capital market.
At the same time, social political initiatives, requirements, and regulation are intensifying within these topics. At ORIOR, we are taking this path out of conviction, not just because we have to, but because we want to and because it secures our future viability. ESG is very comprehensive. I am glad and very grateful that we began to systematically address these issues about four years ago. In this sense, we are also driving the topics and goals within ESG integratively and at all levels of business activity. On the one hand, we link them into our rolling and medium and long-term planning, and we measure and evaluate progress and derive measures and projects from this. Some examples of measures and projects we have advanced in the first half of 2021, and those advancements are listed here. As mentioned earlier, we decided to switch to sustainable hydropower for all ORIOR Switzerland.
With this step, we were able to achieve our 2025 climate target early on, or even significantly exceed it. We are now working on the design and formulation of a new climate target, also taking into account global and national ambitions. In the social area, for example, we have seen increased sales of organic products and launched a Biotta juice in Demeter quality. Demeter is probably the strictest organic label available on the European market today. Within governance, we have also made a lot of progress in the last few months. For example, the introduction of minimum shareholdings for the board of directors and the executive board, and the launch of the first long-term incentive plan for management. Progress on ESG has been given a 25% weighting. We have also anchored our commitment to the importance of ESG issues in the organizational regulations.
I would like now to hand over the work to Andreas Lindner, CFO of the group, for the financial report. Please, Andreas.
Thank you very much, Daniel. Ladies and gentlemen, I would also like to welcome you warmly to this call. I will be happy to guide you through the financial results of the first half of 2021. I will start my review of the first six months with the Convenience segment on page 12. Our four convenience companies increased sales by 13.5% to CHF 108.1 million in the first half of the year. All competence centers contributed to this exceptional strong growth. The retail channel performed very well. The food service channel failed to grow, partly due to the pre-Corona performance in the first three months of the previous year. Since June, the recovery has now been clearly noticeable. The plant-based product range has shown consistently good growth over the past three years, with double-digit growth being generated in the reporting period.
In order to ensure long-term supply availability for the wide plant-based range distributed in all channels, we will invest in the expansion of production capacities. The project has now been launched, and the first deliveries from the new production lines are scheduled for early 2022. Strong demand for fresh pasta, organic products, and regional ranges is also continuing and received an additional boost from the corona pandemic. This development is in line with the general increase in demand and awareness of the sustainability aspects of the products. As a result, consumers are increasingly willing to pay a premium price for high-quality products. I switch to the Refinement segment on page 13. The Refinement segment developed weaker than expected and achieved sales of CHF 125.1 million in the first half of the year, a decrease of -5.1% versus the same period of the previous year.
On the one hand, the main driver was a strong prior year comparison basis. We grew by 3.7% in H1 2020. On the other hand, also the tight raw material situation, especially bio organic meat, as well as changes in the product range. We deliberately avoided and refrained from certain tenders and revenue in favor of a healthy margin. In addition, we were confronted with unforeseen challenges during an IT system change at Rapelli, which temporarily, that is from mid-April to June, led to slowdowns and delays in logistics. These problems have now been resolved. On the positive side, there were various innovations and new launches to report, such as the launch of the new Pure Nature line under the Albert Spiess brand in the Coop, the My Energy snack brand, and the Aperitivo line also posted good sales growth figures.
We are also very satisfied with the Albert Spiess online store. I will now turn to the International segment on page 14. Our companies abroad achieved sales of CHF 74.7 million, just short of the previous year, which still contained two and a half normal and very good pre-corona months, making direct comparison somewhat difficult. Especially the amount of Casualfood is significantly influenced by this effect. Without Casualfood, the segment growth would have been a very good 6.2%. Culinor grew well in the first six months, thanks to the expansion of the customer base and new listings in the fresh menu segment, the steadily growing home delivery segment also continued to perform. Albert Spiess and Spiess Europe are also doing very well. They are both in the trend categories, organic and regionality, which generally perform well.
Casualfood continued to suffer from the sharp reduction in air traffic and the absence of travelers. Since June, a slow recovery has now begun in the travel gastronomy sector. The rental contracts renegotiated last year and early 2021 have put Casualfood on a new flexible cost basis that will have a lasting impact on profitability. One highlight, as mentioned before, is the opening of the Smart Seller flagship store in Ljubljana. Smart Seller is an integrated concept introduced in a joint venture with Heinemann that unites the food beverage, the convenience, and the duty-free world, and was developed specifically for small airports in Europe and their needs. Now on page 15, we see the composition of sales growth. The ORIOR Group increased net sales in the first six months by 1.6% to CHF 291.9 million. We had no acquisition effect in that reporting period.
The remaining final tranche, Casualfood of 11%, will not follow until September 2022. Organic growth was 0.9% and was driven by the great development of the Convenience segment. The Refinement segment recorded a weaker development, the reason for which I explained earlier, but a significant part of this is also due to the strong prior year comparison. Food service and travel gastronomy were weak in the first five months, and it's only since June that we have felt a slow recovery. The exchange rate effect was positive in the first half and amounted to 0.7%. This resulted in a total increase in net sales of 1.6% for the entire group. Excluding the exchange rate, that means organic, the growth amounted to 0.9%, and excluding the most affected unit, Casualfood, the organic growth would have been a good 3.1%.
I now turn to page 16 and to the consolidated income statement up to EBITDA level. As mentioned earlier, the ORIOR Group has generated net sales of CHF 291.9 million in the first half, an increase of 1.6% year-on-year. Absolute gross profit increased by plus 3.5%, driven by the good performance of the high margin ranges, such as plant-based facilities, fresh pasta, and other innovations. EBITDA amounted to CHF 31.1 million, an increase of 32.3%. The good operating result, as well as other operating income in the amount of CHF 6.1 million, which includes the COVID-related aid and support payments received for Casualfood in the amount of CHF 5.7 million, contributed to this performance. The previous year figure of CHF 4.7 million included the insurance payment for the defaults in the food service channel amounting to CHF 4.4 million. The EBITDA margin increased from 8.2% to 10.6%.
The main reason for this increase, in addition to the positive effects mentioned earlier, were the sustained flexibilization of costs and processes. It is important to mention that even without the special factors in this and last year, for example, the insurance payment, the short work compensation, and the received economic aid, the EBITDA margin increased to almost 2 percentage points, which demonstrates the operational improvement and the path we have embarked on. I now turn to page 17 and come to the main drivers of the EBITDA changes. Compared to the margin for the first half of 2019, of 10.2%, we recorded various corona-related negative drivers in the first half of 2020, which temporarily pushed the margin down to 8.2%. As already communicated, we immediately implemented comprehensive measures. A strong driver was the slump in sales of food service customers due to regulatory restrictions and closures.
This affected several units, in particular, the Convenience segment and of course, Casualfood, which almost came to a complete standstill. The product and channel mix has shifted, which has also resulted in a margin squeeze. We have introduced various countermeasures to cushion the negative drivers. With the ORIOR New Normal initiative, we've created a new basis in many areas. This also included the general fitness program to sustainably increase cost efficiency. Where appropriate and necessary, employees were temporarily placed on short-time work. Due to the damage caused by the official closure of our food service customers, we were able to claim insurance benefits of CHF 4.4 million from our epidemic insurance for the 2020 financial year, which at least partially cushioned the damage incurred.
In the first half of 2021, we were able to continue the improvement path started last year and increase the EBITDA margin to 10.6%. This improvement was driven by the good performance of high-margin product ranges, for example, the plant-based line, the sustained flexibilization of cost structures and processes, and Casualfood's new financial framework. The latter related in particular to the renegotiation of lease contracts and the reduction of structural costs, which are now taking effect. In addition, we received Corona-related aid and support payments in Germany due to the slump in sales and the lack of air passengers. Negative EBITDA drivers were the continued lower sales in the travel, catering, and food service channels, and the weaker development of the Refinement segment. The airline industry remains challenging.
It continues to develop well below pre-corona levels and led to a loss at Casualfood also in the first half of 2021 in purely operational terms, excluding the economic aids. I turn to page 18 and thus to the consolidated income statement below EBITDA. The good improvement in operating results is also reflected in EBIT, which rose by 70.7% to CHF 17.1 million. The development of income taxes is influenced by the Casualfood loss last year. As we do not capitalize deferred taxes on loss carry-forwards, the tax rate in the first half last year was relatively high at 21.8%. In the first half of 2021, the tax rate is at 15.3%, slightly below the expected long-term range of 16%-20%. The minority interest related to the outstanding 11% in Casualfood.
In the previous year, Casualfood has still made a loss despite the support payments, but in the first half of 2021, a balanced result was achieved overall. That is, the operating loss was compensated by the new financial basis and the financial support payments. Due to the aforementioned effects, net profit increased by 62.3% to CHF 13.5 million, which corresponds to a margin of 4.6%. On page 19, it shows the main items of the consolidated balance sheet according to Swiss GAAP FER. There were no particular changes in the balance sheet compared with the previous year. Shareholders' equity amounts to CHF 67.9 million with current bonds to an equity ratio of 18.2%, slightly better than in the previous year. However, our focus is clearly on bringing the equity ratio back above 20% as quickly as possible.
The shadow calculation that is including goodwill results in an equity ratio of 36.8%. On page 20, we see the development of the debt ratio since half-year 2017. Until 2019, the leverage ratio always remained below 2.5 despite acquisitions. In half-year 2020 and full-year 2020, we see a temporary increase due to corona. In half-year 2021, we have again reduced the ratio below 2.5, and it is our declared goal to continue to keep the leverage ratio below this healthy target value of less than 2.5. The next and last tranche of Casualfood in the amount of 11% is scheduled for 2022, and will therefore not affect the leverage ratio in 2021.
I turn to the cash flow and dividends on page 21. Due to the good operating results, the operating cash flow reached CHF 27 million in the first half of the year, which corresponds to a cash conversion of a solid 87%. The previous year figure is distorted, that is too low, because the insurance payment of CHF 4.4 million was accrued in the half-year report, but then was only received later on in July last year. As far as dividend is concerned, a slight increased distribution of CHF 2.33 per share was made this year. This in the context of an attractive dividend policy with a steady increase of the absolute dividend. ORIOR has always slightly increased the dividend in absolute terms since its IPO in 2010. We have also committed ourselves to this attractive dividend policy for the future as part of the ORIOR 2025 Strategy.
We are proud of our shareholder base, which is characterized by long-term oriented investors. With these words, I give back to Daniel.
Thank you very much, Andreas. We will now move on page number 22 and the outlook for the second half of this year. We expect a good second half year. We expect the food service and traveling gastronomy businesses to continue to recover. In the retail business, we expect a further decline driven by the disproportionate performance in the same period last year, and an increase in cross-border shopping. This assessment is based on the assumption that the overall Corona situation will not change significantly again. In the second half of the year, we will introduce New Normal measures. An important and future-oriented project is, as mentioned, the expansion of the plant-based production capacities.
As part of our ongoing plant development, we will also push ahead for the aforementioned integration of Bodar at Rapelli, and we will start a new planning for the transfer of production capacities from our Le Patron plant in Itingen to the Le Patron plant in Böckten and to the Rapelli plant in Stabio. We are also introducing group-wide talent management and succession planning, strengthening the leadership mindset, which is also part of our ORIOR New Normal. Page 23. We confirm our sales guidance for the 2021 financial year, published in March 2021, with organic growth of between 0.8%-2.4%. The main drivers continue to be the organic, plant-based, and regional specialties products segments as well as Culinor and from summer on, Casualfood. In terms of profitability, we are increasing our guidance from 9.8%-10.2% to a new 10.2%-10.5% for the whole year.
Important elements of this increase are the further growth with higher margin product segments, the sustainable flexibilization of cost and processes, the new financial basis of Casualfood, as well as further aid and support payments from the German state, which are expected for H2. Today, we can confirm around EUR 2 million for H2. Further benefits are possible, but in total expected to be lower than in H1. Page 24. We confirm the full year guidance for tax rate and CapEx. Page 25. Two or three words on ESG and what the focus will be in the coming months. In recent years, we have focused primarily on developing and embedding our sustainability strategy and on producing GRI compliant reporting. Now, we have started to open our perspective with the aim of strengthening our impact and influence along all ESG topics within ORIOR, also beyond ORIOR.
In this context, we have recently signed the framework agreement with United Against Food Waste. This is an industry alliance in the food service sector to actively promote the reduction of food waste. Other examples are the intensified exchange with rating agencies such as MSCI, ISS, and Inrate, or the participation in the CDP program. We will also be publishing ORIOR's first sustainability report shortly. You can see other key topics on this side. I would like to mention that since April this year, we have been holding focused ESG investor meetings on request in order to explain and to discuss the comprehensive topics in depth. We now move on to page 26 for a brief outlook on the key drivers and challenges in our three segments. Convenience. We expect further slight growth with high-margin products.
Among the positive drivers, I would like to mention the new Biotta fresh juice in 1 L format, as well as the successful modernization of the Wellness Week and the new concept of My Juice Day . In the pasta segment, demand is at a high, stable level, especially for our al dente pasta, our premium ranges that we are marketing under our licensed brand, Garofalo, or that we are producing for our key customers. Possible challenges are the availability of raw material in the organic vegetable sector due to the bad weather we have witnessed this summer. This applies in particular to carrots and beetroot, both in Switzerland and Germany. We just need a few nice warm days, and then this issue should be significantly reduced. We stay positive. Page 27, refinement.
In refinement, we expect a decline in development due to the strong previous year, the changes in the product range, and also the availability of some organic meat raw material. Among the positive drivers, we would like to mention the further development in the clean label area and the launch of the Pure Nature brand by Albert Spiess. The Pure Nature snacks are produced without nitrate, curing salt, and have a natural and intense taste. These products are available at Coop and Migros. Possible challenges are the bad weather affecting the barbecue range, as well as the tourist gastronomy in Graubünden and in Ticino. Another factor is the volatile raw material prices for pork and the scarce availability, as just mentioned, especially for organic meat. We turn to page number 28. In the International segment, we expect generally good growth, and especially growth coming from this summer onwards from Casualfood.
Among the positive drivers, we would like to mention the expansion of Culinor sales channels to Holland and France. Sales of the SteamDream fresh menus in Holland are developing very promising. Gesa in Germany is also showing a sustained good development in the D2C business. A possible challenge is the further course of the pandemic with regards to travel gastronomy. This brings us to the end of our presentation. Thank you very much for your attention, and we are now happy to answer any questions you might have.
Ladies and gentlemen, if you have a question, you can raise your hand, or you can also pose the question into the chat function. I think there are no questions at the moment. We're going to wait a little longer. Yeah, Daniel, there are no questions. I hand back to you for the statement.
Okay. Thank you very much, Milena. Thank you all very much staying with us for the presentation of our half year results. It has been a pleasure, and please don't hesitate, in case of any question, to contact Milena directly. We will be glad to answer whatever is of interest from your side. Thanks a lot. I wish you a great finish of this day, and have a good time and lots of success. Goodbye.
Thank you. Bye-bye