The cost of beef has led Canada’s Premium Brands Holdings to lower its forecast for annual adjusted EBITDA.
The processed-meats and deli-foods manufacturer still expects adjusted EBITDA to rise this year but today (10 November) trimmed its guidance due to the “transitory impact of continued increases in the cost of beef raw materials”.
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Premium Brands is now forecasting its adjusted EBITDA will reach C$670-680m ($478.1-485.2m) in 2025 compared to its previous guidance of C$680-700m. In 2024, the group’s adjusted EBITDA reached C$593.7m.
By contrast, the Hempler’s meats owner increased its forecast for full-year sales to C$7.4-$7.5bn from its previous projection of C$7.2-7.4bn.
Premium Brands saw adjusted EBITDA and revenue hit “record” third-quarter highs in the 13 weeks to 27 September.
Adjusted EBITDA stood at C$179.1m, a rise of 12.4% on the third quarter of 2024.
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By GlobalDataThird-quarter revenue reached C$1.99bn, an increase of 19.1% year on year. Volumes grew 10.3% on an organic basis.
“While we generated another quarter of record adjusted EBITDA, our margins for the quarter were below our expectations due to double digit cost inflation for certain key beef raw materials,” president and CEO George Paleologou said.
“Looking forward, we are confident that this headwind is transitory and that the issues causing this most recent rise in beef prices are being addressed. In the meantime, we are taking targeted pricing actions and developing new procurement initiatives to restore margins in the impacted product categories with the objective of putting us back on track to achieve our mid-term targeted annual adjusted EBITDA margin of 10%.”
Paleologou, meanwhile, said Premium Brands’ “acquisitions pipeline has never been more robust”, adding the company is “active on several transactions which we hope to close in the next quarter or two”.
However, he said: “We remain, however, committed to continuing to deleverage our balance sheet over the course of 2025 and fiscal 2026 and any transactions will be done within this context.”
In March, the company revealed the acquisition of Arizona-based premium sausage manufacturer Denmark Sausage for US$21m.
The acquisitive retail and foodservice supplier had announced three other acquisitions in December – the US pair of NSP Quality Meats and Casa Di Bertacchi, plus Canada-based Italia Salami.
Premium Brands booked a third-quarter loss of C$1.7m, versus a profit of C$25.4m in the corresponding period a year earlier.
Nine-month net earnings stood at C$28.8m, against C$84.2m in the first nine months of 2024.
Revenues for the first nine months of this year were C$5.58bn, compared to C$4.83bn 12 months earlier.
