Monde Nissin's Record-High Revenues Ride On 10.5% Domestic Sales Growth In Q1 2022

Monde Nissin Corporation (“Monde Nissin” or the “Company”; PSE stock symbol: MONDE) announced today its unaudited financial results for the first quarter ended March 31, 2022. Consolidated revenue increased 7.2% to Php 18.3 bn for the first quarter on the strong performance of the APAC BFB domestic business.

Photo Insert: Lucky Me! is one of Monde Nissin's iconic brands.

First quarter gross margin showed a 150 bps recovery from Q4 2021 due to pricing actions and volume growth, but decreased to 35.1% year-on-year as input costs continue to rise.

Year-on year, core EBITDA declined by 9.9% to Php 3.6 bn due partly to the company’s continued strategic investments in brand and new product development during the quarter. Relative to Q4 2021, core EBITDA grew 78.1% as operating expenses declined.

Core net income attributable to shareholders for the quarter saw a decrease of 13.5% to Php 2.1 bn, while reported net income ended almost unchanged at Php 2.3 bn, benefiting from lower interest expense due mainly to the repayment of the Arran convertible note and bank loans in 2021.

Asia-Pacific Branded Food and Beverage (APAC BFB)

APAC BFB net sales for the first quarter increased by 8.6% to Php 14.5 bn due to the improving performance of the domestic business, which grew 10.5% to Php 13.7 bn on price increases and continued volume growth for the noodles, culinary, and packaged cake categories. Biscuits also posted volume growth to pre-pandemic level. Meanwhile, the international business declined 15.4% to Php 854 mn due mainly to shipping constraints during the quarter.

Gross profit decreased 4.0% for the first quarter to Php 5.0 bn, with gross margin down 450 bps to 34.4% as price increases taken in the second half of 2021 and first quarter of 2022 partially mitigated rising commodity costs.

Core EBITDA posted a 69.5% improvement in Q4 2021 due to lower operating costs and price increases, but declined 6.4% year-on-year to Php 3.4 bn as pricing actions trail commodity cost increases.

Meat Alternative (Quorn Foods)

Meat Alternative revenue decreased 1.3% year-on-year on an organic basis as the U.K. grocery market remains in decline and as the country continues to experience challenging macroeconomic conditions. On a reported basis, revenue increased by 2.1% to Php 3.8 bn due to foreign exchange gains. Retail sales posted a decline year-on-year as the market rebalances to out-of-home consumption. Meanwhile, food service delivered a record quarter and grew 124%.

Price increases in the U.K. resulted in gross margin recovering to 38.0% in the first quarter from 32.6% in the fourth quarter of 2021, despite increased inflation from recent geopolitical situations. Year-on-year, gross margin decreased by 300 bps.

Core EBITDA showed a sharp recovery from Q4 2021 but declined 42.9% year-on-year to Php 218 mn due to investments in research and development as well as resource strengthening.

Monde Nissin’s financial position remains strong with Php 13.5 bn in cash and cash equivalents and an improved net debt-to-equity ratio of 0.23. Outstanding debt was at Php 7.0 bn as of March 31, 2022. Operating cash flow was at Php 809 mn for the first quarter of 2022.

Concluding Comments

Henry Soesanto, Chief Executive Officer, commented, “While we had a strong start to the year and remain optimistic about the continuation of the growth we are seeing, commodity inflation remains a concern for our APAC BFB business and it is something that we will proactively respond to as the year progresses. We are working hard to continually improve our efficiency and being mindful of our consumers when price increases become warranted, striving to maintain our growth momentum and recovering margin where possible. As for our Meat Alternative business, while the retail environment remains challenging, our market share continues to be stable. Our foodservice segment is also showing sustained momentum as it posted its best-ever quarter. We will leverage on these encouraging signs and work towards overcoming the short-term challenges.”

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