Key Takeaways
- Monde Nissin expects impairment charges of £80-100 million for its Quorn meat alternatives in fiscal 2024, following significant sales declines.
- The company’s newly appointed CEO, David Flochel, aims for the Quorn division to achieve positive EBITDA by 2025.
- Despite sales challenges, Monde Nissin anticipates a lesser impairment charge compared to the previous year.
Sales Declines Prompt Impairment Charges for Quorn Division
Monde Nissin, renowned for its instant noodle products, has announced potential impairment charges ranging from £80 million to £100 million (approximately $101 million to $126 million) for its Quorn mycoprotein-based meat alternatives business in the fiscal year 2024. This forecast comes after the division reported double-digit sales declines in the fourth quarter.
In 2023, Monde Nissin introduced a business-to-business (B2B) ingredients division aimed at selling mycoprotein to other companies. The company has recently appointed David Flochel, the former head of Heineken UK, as the new CEO, part of a broader restructuring initiative focused on achieving positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2025.
Sales figures for Quorn reflected a mid-single-digit decline year-over-year in the third quarter, with conditions deteriorating further in the fourth quarter. Monde Nissin’s press release indicated expectations of a 15% decline in constant currency sales compared to the prior year for the fourth quarter. The company attributed this decline partly to fewer selling weeks compared to the previous year but remains optimistic about achieving a positive EBITDA even amid ongoing revenue challenges.
The annual impairment assessment for Quorn reveals a significant impairment charge this year, projected to fall between £80 million and £100 million. While this charge is substantial, it is considerably lower than the impairment recorded in the previous year.
Quorn products, which are high in protein and fiber while being low in saturated fat and calories, are derived from Fusarium Venenatum—an edible filamentous fungus first identified in soil in Buckinghamshire, UK, during the late 1960s. The fungus is cultivated using a controlled fermentation process in large steel tanks. Quorn made its debut in the UK in 1985 and entered the U.S. market in 2002. Monde Nissin acquired the brand in late 2015 for £550 million ($695 million).
As Monde Nissin navigates these challenges, the company continues to explore innovative paths to enhance the performance of its Quorn division while adapting to the competitive landscape of meat alternatives.
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