Orior, the Switzerland-based fresh meats and pasta business, said it can no longer abide by its previously-announced financial guidance due to the uncertainties created for the listed-business from coronavirus.
While Orior noted retail demand has “increased sharply”, its foodservice operations, including its Casualfood business headquartered in Germany in which it holds a majority stake, has seen a “dramatic” decline.
Like other countries, the Swiss government has enforced social distancing measures and work-from-home policies, along with ordering the closure of restaurants and entertainment outlets to curb the spread of the virus.
Casualfood mostly operates in airport terminals, supplying products such as sandwiches, salads, muesli and smoothies, but the travel sector has also been hit hard as Switzerland imposed border restrictions with neighbouring countries. Its foodcart businesses include Hermann’s, Italissimo, Mondo, Natural and Quicker’s.
“Reliable projections of the course of business in 2020 are not possible due to the current uncertainties,” Zurich-listed Orior said in a statement. “Our priorities are keeping employees safe and healthy and maintaining a high level of supply readiness.”
When Orior issued its 2019 annual report, the company said: “We expect 2020 to be a good year with every business segment contributing to organic growth. The expanded scope of our operations [Casualfood] has enhanced both our stability and our resilience. The general market environment will remain challenging, but our pipeline is full of strong arguments for our products, concepts and services.”
In an update, Orior now says: “The previous guidance for fiscal 2020 can, for now, not be confirmed due to the uncertainty regarding future circumstances. The extraordinary circumstances the world is currently facing as a result of the coronavirus pose challenges at every level and in every area.
“As a food and beverage company, Orior is part of the national food-supply network and is doing everything in its power to perform its duties as best it can.”
Orior’s net sales rose 3.4% in 2019 to CHF596m (US$614.4m), while EBITDA climbed 4.2% to CHF61m. But net profits dropped 1% to CHF31.4m.
Despite the coronavirus outbreak, the company said all of its manufacturing facilities are operational but running at a “high rate of capacity and under heightened safety and protective measures”.
However, it cautioned that the weakness in foodservice “will not be completely offset in the near term by the increase in sales with food retailers”.
Orior added that Casualfood has had to close most of its points of sale in airports, mainly in the Benelux countries, with affected workers supported by government-led programmes.