Swiss food and beverage group Orior has warned its 2023 results will come in “below expectations and guidance” because of an “accumulation of adverse factors”.
The Zurich-based company pointed to trading conditions it endured in the second half of the year.
“Rising input costs led to higher retail prices, which in turn caused consumers to increasingly choose lower-priced Orior products, resulting in a product mix with lower margins,” the group said in a trading update issued today (24 January).
It also pointed to pork prices rising significantly, which put pressure on margins in the fourth quarter.
“At the same time, it was not possible to realise all of the planned growth potential initiatives. Combined with modest Christmas business, these effects became more accentuated towards the end of the year,” Orior added.
The company, behind brands including Albert Spiess cold meats, Biotta vegetable and fruit juices and Pastinella pasta, now expects to generate net sales of SFr643m ($743.6m) during the 2023 financial year and an EBITDA margin of around 9.2%.
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In August, it forecast net sales in the range SFr662m to SFr678m and an EBITDA margin between 9.8% and 10.2%.
In 2022, Orior generated net sales of SFr636.7m and an EBITDA margin of 10.1%.
Despite the lower guidance, the company suggested the ambitions of its Orior Strategy 2025 plan are “in principle confirmed”, as they included organic growth of 2-4% and an EBITDA margin of greater than 10%.
Digging into the performance of its various segments, Orior, which is listed on the local SIX Swiss Exchange, said its ‘refinement’ segment was particularly affected and – despite deli products brand Rapelli’s “solid performance” – will end the year with “negative growth”.
It added: “The Orior convenience segment matched the previous year’s results, thanks in part to Biotta’s pleasing performance, while the Orior International segment, with the exception of Spiess Europe, did very well overall and is reporting high, single-digit organic growth.”
The company made no specific reference today to its plant-based offerings. In August, CEO Daniel Lutz said Orior remained “fully convinced of the future viability and growth potential” of this category despite “poor” first-half sales.
More generally, Orior said today changing economic factors are being assessed on an ongoing basis adding it is introducing measures to increase growth and improve its profitability.
The company said it will provide detailed information about its 2023 annual results, the outlook for the current financial year and the medium-term targets defined in the Orior Strategy 2025 on 13 March.