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Consolidated Revenue: Increased by 2.8% year-on-year in Q1 2025.
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APAC BFB Revenue: Grew by 4.1% year-on-year, comprising 84% of the top line for Q1.
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Volume Decline: Overall volumes down by 2.9% for the quarter.
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Gross Profit: Modest increase of 5%.
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Gross Margin: Down 50 basis points on a consolidated basis.
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Core EBITDA: Increased slightly by 3.4%.
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Net Income: Consolidated net income increased by 1.5%.
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Core Net Income: PHP2.9 billion.
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Meat Alternative Sales Decline: Sales decline slowed to 6%.
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Meat Alternative Gross Margin: Increased by 300 basis points.
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Meat Alternative EBITDA: Turned positive with a 140 EBITDA.
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Market Share Gains: Various product lines, including biscuits and oyster sauce, showed market share improvements.
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Debt Reduction: Paid down GBP12 million of external borrowing.
Release Date: May 14, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
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Monde Nissin Corp (MNDDF) reported a 2.8% year-on-year increase in consolidated revenue for Q1 2025.
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The APAC Branded Food and Beverage (BFB) segment, which makes up 84% of the company's top line, grew by 4.1% year-on-year.
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The company's flagship brands, such as Lucky Me, SkyFlakes, and Fita, continue to perform well, with Lucky Me being recognized as the number one most chosen FMCG brand for 10 consecutive years.
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The meat alternative segment showed significant improvement with a 300 basis point increase in gross margin and a positive EBITDA, indicating a successful transformation program.
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Monde Nissin Corp (MNDDF) has effectively managed its cost structure, with palm oil prices peaking and wheat prices reaching a five-year low, which should benefit future margins.
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Despite market share growth, Monde Nissin Corp (MNDDF) experienced a 2.9% decline in volumes for the quarter, particularly in its basic instant noodle SKUs.
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The UK market remains depressed, impacting the performance of the Cauldron brand and the food service business.
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Gross margin for the APAC BFB segment declined by 50 basis points on a consolidated basis, with edible oil costs contributing to the pressure.
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The meat alternative segment still faces challenges, with a 6% decline in sales and a 7.6% decline in volume.
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The company is facing a 10% tariff on imports to the US, which could impact the profitability of its US business.
Q: Can you explain the impairment line item under APAC BFB in today's filing? A: Jesse Teo, CFO: The impairment line item was an error in the segment P&L schedule. We apologize for the mistake, and the corrected schedule will be published tomorrow. You can refer to the earnings presentation or the MD&A section for the correct segment P&L.
Q: Are you on track to meet the impairment calculation guidance with Q1 results? A: Nick Cooper, CFO of Quorn Foods: Yes, the Q1 performance supports our full-year guidance, which aligns with the evaluation model for the impairment calculation.
Q: What drove the decline in food service in Q1, and what is the outlook for this part of the business? A: David Flochel, CEO of Quorn Foods: The decline was due to disappointing menu wins in the last year's Q4 cycle. We are working to improve execution for this year's cycles and are seeing encouraging signs. We aim to get the food service channel back to flat by the end of the year.
Q: With strong volume growth in biscuits, do you have the capacity to meet demand? A: Jesse Teo, CFO: Yes, our CapEx plan includes building new plant sites to support the volume growth in the biscuit segment, particularly for Greyham and SkyFlakes.
Q: How do tariffs impact your US business, and what are your plans for it? A: David Flochel, CEO of Quorn Foods: The US business, which accounts for 5% of our sales, faces a 10% tariff on imports from the UK. Despite this, it still makes a small positive financial contribution. We are reviewing the strategy for our US business and will update later in the year.
Q: How confident are you in your margin guidance given the year-over-year gross margin decline in APAC BFB results? A: Jesse Teo, CFO: We are confident due to favorable commodity lock-ins and cost-saving projects. Palm oil prices have peaked, and we have locked in favorable prices for key commodities.
Q: Can you provide more details on the noodle price and volume decline in Q1? A: Jesse Teo, CFO: The decline is mainly in Instant Mami beef and chicken SKUs, which make up 29% of our volume and saw a 13% decline. We are conducting a study to understand consumer spending shifts.
Q: What led to the change in the source of market share information for UK retail, and why is Cauldron lagging behind the Quorn brand? A: Nick Cooper, CFO of Quorn Foods: We switched to NIQ for broader market visibility. Cauldron is facing competition in its segments, but we are working on innovation and competitiveness to improve its performance.
Q: How has the right-sizing of Quorn been going, and can we expect further cost reductions? A: David Flochel, CEO of Quorn Foods: The right-sizing is on track, and we are focusing on lean operations and supply chain transformation. Further improvements are expected as we align our organization with strategic focus areas.
Q: Can we expect the EBITDA turnaround in the meat alternative business to be sustained for the rest of the year? A: Nick Cooper, CFO of Quorn Foods: We are on track for full-year EBITDA guidance, though delivery will be uneven due to planned media investments to support growth in snacking.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
