The Dutch company said this increase was mainly driven by higher cattle purchase prices, with some cost inflation passed on to the market in the form of higher prices.
Sales volumes fell by 5.4%, which Vion said was due mainly to market circumstances in Germany.
In 2022, Vion said it was forced to cope with a number of global market dynamics, such as the coronavirus pandemic, export restrictions due to African swine fever, a significant decrease in available livestock in Germany and a tight labour market.
Furthermore, the meat producer said the energy crisis that followed the invasion of Ukraine fuelled inflation, which had already started to increase in 2021.
Price increases in the supply chain were absorbed before being passed on to the consumer. Although this boosted turnover, Vion said it had a negative impact on margins and earnings.
“Market developments in Germany have been faster than we anticipated due to African swine fever, and we have therefore reduced and consolidated a significant portion of our slaughter capacity in that market," commented CEO Ronald Lotgerink.
"By contrast, the German foodservice operations again performed strongly due to the chain strategy pursued. Dutch capacity is in line with the market, although we continue to keep a sharp eye on this with the view to building a foundation for long-term sustainable growth and further consolidating our close partnerships with our farmers and customers in the supply chain.”
'Change that Matters'
Vion said it decided to accelerate its strategy in 2022 with the 'Change that Matters' programme.
The programme envisions improving performance by €150 million every year by 2025. Vion aims to achieve this by adjusting its production footprint and implementing operational improvements, cost savings and commercial initiatives.
Having been fully implemented by early 2023, the company said this programme is already ahead of schedule.