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Investing.com -- Orior stock dropped 2% after the Swiss food company announced a restructuring plan aimed at reducing its debt over the next 18 months, as its net debt to EBITDA ratio reached 5.2x in the first half of 2025.
The company reported first half organic sales decline of 1.8% YoY to CHF305 million, which came in above analyst expectations of CHF298 million. However, EBITDA fell sharply by 29% YoY to CHF16.3 million, below the consensus estimate of CHF17.1 million, with margins contracting 190 basis points to 5.4%.
As part of its debt reduction strategy, Orior plans to partially close an Albert Spiess production site and merge it with Rapelli, while also considering the sale of Culinor. These moves are expected to reduce debt by "high double digit CHF million" over the next year and a half. The company has also extended its credit facility agreement until 2029.
Performance across segments was mixed, with the Convenience division seeing organic sales decline by 5.9% YoY due to tender losses in fiscal year 2024. The Refinement segment showed growth of 4.7% YoY, driven by solid performance from Rapelli and price increases. The International segment declined by 1.9% YoY, with Culinor underperforming while Casualfood delivered satisfactory results.
Orior’s EBITDA margin was negatively impacted by rising pork prices, as the company passes on raw material cost increases with a delay, resulting in a gross margin decline of 227 basis points YoY. Despite these challenges, free cash flow turned positive at CHF10.7 million, compared to negative CHF13.2 million in the first half of 2024.
For the full year 2025, Orior has revised its organic sales guidance to a decline of 2-4%, an improvement from the previous forecast of a 4-6% decline. The company now expects an EBITDA margin of 5.9-6.3%, slightly adjusted from the previous 6.0-6.4% range.
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