Page 8 - Food&Drink Business magazine September 2022

NEWS
Noumi news: litigation, divestment, disappointing FY
FRENCH coffee company Sunday Collab International has launched proceedings against noumi in the Queensland Supreme Court, regarding distribution rights in Europe of Milklab products.
Sunday Collab alleged it had an agreement with noumi that it would be Milklab’s exclusive distributor in Europe and certain adjacent markets. It is seeking 17 million euros (AU$27.8 million) in lost profits as well as additional costs and expenses.
Sunday Collab was founded by French pro-surfer Reid Pinder. Its Australian operations involve investment from pro-surfer Joel Parkinson – friends with Pinder since their teens – and ironman Luke Cuff.
Parkinson was one of the founders of Balter Brewing that was sold to Asahi Beverage’s Carlton and United Breweries in 2019.
Noumi said no agreement was executed by either party and Sunday Collab’s claims were without merit, adding that the claim for lost profit was “wholly unsupportable”.
It said the alleged losses are misconceived and would not succeed because Sunday Collab had little evidence of previous distribution experience with dairy or plant-based beverages, the highly competitive nature of the European market, and the significant disruption and broader economic challenges due to Covid that continue to
affect supply chains and distribution networks.
Noumi is already facing a joint class action in the Victorian courts alleging the company breached the Corporations Act, the Australian Securities and Investments Commission Act, and the Australian Consumer Law Act.
AUSTRALIAN
MILK HOLDINGS DIVESTMENT
Meanwhile, noumi has divested all its shares in Australian Fresh Milk Holdings to meet obligations of its settlement with US almond growing group Blue Diamond.
The shares were sold to NewAustralia Holdings and Leppington Pastoral Investments.
NewAustralia Holdings is a subsidiary of mining and energy company New Hope Group, which also has agricultural operations, while Leppington Pastoral Investments is a Perich company, connected to the family’s private investment business Arrovest, which is the major shareholder in noumi.
CHALLENGING TIME EXACERBATED BY HERITAGE HEADACHE With revenue down five per cent and adjusted operating earnings before interest, taxes, depreciation, and amortisation (EBITDA) dropping 68 per cent to $7.3 million, noumi continues
to weather the effects of its previous life as Freedom Foods Group as well as current challenging business conditions. Its net loss after tax was $161.1 million.
Noumi faced the same challenges as much of the business world – Covid impacts, geopolitical instability, rising transport and energy costs, workforce availability, and supply chain disruptions – compounded by large increases of the farm gate milk price.
Its massive 68 per cent drop in adjusted operating EBITDA did not include discontinued operations, restructuring costs, the US litigation settlement, and onerous contracts provisions. The company said it was because of impacts on sales volume, input cost inflation and productivity.
As the business sought to distance itself from the Freedom Foods Group legacy, it rebranded, offloaded its Cereals and Snacks division to Arnott’s Group, sold its seafood unit, and repositioned itself on the remaining Plant-based Beverages and Dairy & Nutritional divisions.
Currently, Dairy & Nutritionals accounts for 67 per cent of revenue, Traded Milk two per cent, and Plant-based Beverages 31 per cent.
Noumi’s statutory net loss of $161.1 million was due to the $55.6 million settlement of the US litigation and one-off non-cash asset impairments of
$95.7 million. Restructuring costs were $6.5 million and onerous contracts $4.7 million.
Flagship brand Milklab and the Plant-based Beverages business continued to be the company’s bright spot, with revenue up 7.2 per cent to $164 million and adjusted operating EBITDA up 30 per cent to $33.4 million.
CEO Michael Perich said
the division now accounts for almost a third of group sales and Milklab’s “stellar run” continues with sales up
26.4 per cent on FY21. The brand Australia’s Own sales were up 16 per cent.
The same couldn’t be said
for the Dairy & Nutritionals business, with Perich saying the company was “very disappointed” with its financial performance.
Dairy & Nutritionals was significantly affected by cost inflation and Covid impacts on key operational turnaround initiatives. Its net revenue was down 9.1 per cent ($36 million) to $358.3 million.
1HFY22 was impacted by a $10 million Lactoferrin disruption and in 2H, cost inflation had an $8 million impact and masked productivity gains in Q4.
Perich said while it hoped to deliver improved results in FY23 and was negotiating with export customers to pass on higher raw milk prices, it was unlikely to fully recover price increases in FY23. ✷
8 | Food&Drink business | September 2022 | www.foodanddrinkbusiness.com.au