- Consolidated revenue growth of 1.2% to Php 33.8bn:
- Revenues for Asia-Pacific Branded Food & Beverage (APAC BFB) businesses grew by 1.7%, mainly driven by 68.1% growth in the International business.
- Revenues of Meat Alternative (Quorn Foods and Cauldron) businesses was stable.
- Core net income at ownership was Php 4.3bn, reported net income declined to Php 204mn reflecting non-core and non-recurring items mostly associated with the IPO.
- Market share gains in the Philippines reinforced market leadership – noodles up by 150 basis points, and biscuits by 80 basis points.
- Quorn Foods’ 4th fermenter was commissioned in July and adds significant headroom capacity to support growth.
- Quorn Foods was awarded by KFC UK as New Product Development Supplier of the Year for 2021
MAKATI CITY, PHILIPPINES – August 12, 2021 – Monde Nissin Corporation (“Monde Nissin” or the “Company”; PSE stock symbol: MONDE) announced today that net sales in 1H 2021 reached Php 33.8bn, up 1.2% compared to same period last year. A balanced portfolio and increased APAC BFB international sales helped sustain the H1 2020 sales level.
Core EBITDA declined 14.5% to Php 7.2bn compared with the same period last year, primarily driven by increased investment in new product development and higher advertising and promotion spent for brand building. A substantial increase in gross margin at Quorn Foods was more than offset by a tapered gross margin for APAC BFB due to rising commodity costs.
Monde Nissin’s unaudited core net income at ownership declined by 12.9% to Php 4.3bn in the first half of 2021 compared to the same period last year. Unaudited reported net income declined to Php 204mn, which primarily includes non-core and non-recurring items such as price difference and interest on redemption of the Arran convertible notes at the IPO price of Php 13.50 per share, IPO-related expenses, and deferred tax liability adjustments reflecting revised corporate tax rules in the UK.
Asia-Pacific Branded Food and Beverage Business (APAC BFB)
APAC BFB sales increased by 1.7% to Php 26.2bn in the first half of 2021 versus last year. The increase was primarily driven by the international business, up 68.1% compared to same period last year. Domestic business declined by 1.3% as the growth in noodles was offset by decline in biscuits. Revenues in the first half of 2020 reflected the surge in relief orders from the Taal Volcano eruption in January and February as well as pantry stocking at the beginning of the COVID Pandemic.
Despite the marginal decline in revenues in the Philippines, market share gains were achieved in core product categories. For the 12 weeks to June 2021 versus year ago according to Nielsen: noodles were up 150 basis points to 69.9%, while biscuits gained 80 basis points to 31.1%.
Gross profit declined to Php 9.6bn in 1H 2021 from Php 10.3bn in 1H 2020, with margins contracting 3.4%, resulting from unfavorable sales mix and higher commodity input cost. Core EBITDA declined by 13.0% to Php 6.3bn from Php 7.3bn due to increased advertising, promotional, and selling costs compared to a weaker expense base last year. The benefit of price increases taken in June 2021 should ameliorate margin pressure in the second half of the year.
Meat Alternative (Quorn and Cauldron)
Net sales in the meat alternative business declined by 0.6% to Php 7.5bn versus the comparable 2020 period, reflecting softness across the U.K. and U.S. retail market. Retail sales were adversely impacted in the second quarter as a relaxation of COVID restrictions resulted in greater out-of-home consumption.
Gross profit reached Php 3.1bn, up 6.8% in 1H 2021 versus same period last year. Gross margin expanded by 2.9% to 40.9% in the first half of 2021 due to price increases taken in the U.S. and U.K. in late 2020 and early 2021, respectively. Core EBITDA decreased by 23.9% from Php 1.2bn to Php 886mn, primarily driven by increased investments in new product development, advertising, promotions for consumer marketing, and organizational development.
Henry Soesanto, Monde Nissin’s CEO, commented: “Our business proved resilient in the first half of the year achieving modest topline growth. We undertook some price increases in June to partly recover rising commodity input costs and continue to implement supply chain cost savings. We have achieved significant progress on several long-term growth initiatives, laying the foundation for growth in both our APAC BFB and Meat Alternative businesses”
Mr. Soesanto went on to say “These initiatives include adding needed production capacity in the Philippines and UK, commercialization of products aligned with our aspiration, increasing new product development, and expanding brand awareness activities. In our Meat Alternatives business, Quorn Foods introduced several new SKUs, five of which are in the top 10 UK retail new products in the meat alternative space. We are pleased with the progression of global QSR discussions and very happy for Quorn Foods to be recognized as the KFC UK NPD supplier of the year for 2021, highlighting our commitment to the QSR space.”
|in Php mn||1H 2021 Revenue||Reported Growth|
|Total APAC BFB||26,239||1.7%|
|Meat Alternative||United Kingdom||5,869||-0.4%|
|Rest of the World||968||0.1%|
|Total Meat Alternative||7,520||-0.6%|
|in Php mn||1H 2020||1H 2021||Reported Growth|
|Core net income at ownership||4,884||4,254||-12.9%|
Monde Nissin’s financial position remains strong with Php 31.3bn in cash and cash equivalents and an improved debt to equity ratio of 0.83. Outstanding debt was at Php 24.8bn in 1H 2021. Operating cash flow was at Php 5.2bn for the first half of 2021.
Outlook for the rest of the year
Mr. Soesanto concluded by saying “The price increases we took in the Philippines in June should partly alleviate the pressure on gross margins, but we must be mindful of the difficult circumstances our consumers are currently going through. The recently announced stringent quarantine in the National Capital Region and some other parts of the country will be difficult for many. Monde Nissin being a consumer-focused company, my main priority is to continue to earn their long-term support and trust through fair treatment and good value products. For Quorn Foods, I fully hope to see a much faster growth in the second half of the year. It’s too soon to talk of full year earnings guidance but I believe mid-single digit revenue growth for the full year should be possible.”
About Monde Nissin
Monde Nissin Corporation is a global food and beverages company headquartered in the Philippines, with a portfolio of iconic and market leading brands across fast-growing categories, including Lucky Me! noodles, SkyFlakes crackers, Fita crackers, Monde baked goods and Quorn meat alternative products. The Company aspires to improve the well-being of people and the planet, and create sustainable solutions for food security. That aspiration is reflected in our commitment to continuously improve our products to make them more delicious, nutritious, and better for the planet. For more information, please visit www.mondenissin.com.
Quorn Foods is a global market leader in healthy, sustainable protein. Headquartered in Stokesley, North Yorkshire in the United Kingdom, the company offers a wide range of great-tasting products to appeal to the rapidly expanding group of people wanting to reduce their meat consumption. The company employs around 900 people and exports to 15 countries around the world, including Australia, Singapore and the United States. Quorn® is one of the United Kingdom’s top 40 FMCG brands. Quorn Foods is the reporting group which includes a main trading company, Marlow Foods Ltd. Quorn Foods encompasses all international operations of Quorn® and Cauldron®. For more information, please visit www.quorn.com.
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This communication may contain forward-looking statements. These forward-looking statements are based upon current expectations and assumptions regarding anticipated developments and other factors affecting MONDE. Forward-looking statements are not historical facts, nor are they guarantees of future performance.
Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. Among other risks and uncertainties, the material or principal factors which could cause actual results to differ materially are: MONDE’s brands not meeting consumer preferences; MONDE’s ability to innovate and remain competitive; MONDE’s investment choices in its portfolio management; the effect of climate change on MONDE’s business; MONDE’s ability to find sustainable solutions to its packaging materials; significant changes or deterioration in customer relationships; the recruitment and retention of talented employees; disruptions in our supply chain and distribution; increases or volatility in the cost of raw materials and commodities; the production of safe and high quality products; secure and reliable IT infrastructure; execution of acquisitions, divestitures and business transformation projects; economic, social and political risks and natural disasters; financial risks; failure to meet high and ethical standards; and managing regulatory, tax and legal matters. A number of these risks have increased as a result of the current Covid-19 pandemic.
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