Swiss food and beverage group Orior has initiated a comprehensive restructuring program aimed at reducing its debt.
Additionally, the announcement occurs alongside the company’s report of diminished first-half sales and profits.
In a statement accompanying the results, Orior mentioned that the restructuring includes a review of “all strategic options” for Belgium-based Culinor Food Group, with a potential sale on the table. Furthermore, the company is planning to reorganize its Albert Spiess unit and streamline group structures.
Orior maintains that its current position is fundamentally sound but requires “clear sharpening,” focusing more on the Swiss market.
Interestingly, the group has acknowledged that the anticipated synergies from its Culinor acquisition in 2016 have not materialized.
Additionally, Albert Spiess will undergo significant changes over the next year. The unit has reportedly been “insufficiently profitable for a long time” and requires realignment, as the group noted.
Consequently, all products without a direct link to the Graubünden region in eastern Switzerland will be moved to Rapelli in Stabio, resulting in a minimal operation at the Schiers site.
This transition will directly impact around 90 of the 130 employees in Schiers. Orior is preparing a social plan to mitigate the effects, while the Ganda direct shop in Landquart is also slated for closure.
Orior stated: “This planned reorganisation is both drastic and difficult. However, it appears necessary in order to preserve the Albert Spiess core product group and brand and return the company to a sustainable economic level.”
For the first half of the year, net sales fell by 2.9% to Sfr304.9m ($378.05m). EBIT plunged by 55.2% to Sfr4.1m, while net profit attributable to shareholders dropped by 78.9% to Sfr1.3m.
Despite reducing net debt to Sfr173.3m from Sfr181.4m at year-end, the leverage continues to remain high at 5.2x adjusted EBITDA—over double the group’s target of below 2.5x, according to the group.
Moreover, the group will simplify its legal and organizational structures to cut costs and enhance efficiency, including merging Albert Spiess AG and Rapelli SA.
Orior plans to accelerate debt reduction through property disposals and sale-and-leaseback transactions, targeting a substantial reduction in the high double-digit millions within 18 months.
