Upfield - comment

Upfield published their Q3 results last night, ahead of their conference call today. With price deflation in the spreadable market, sales were down 10%. Gross profit margin improved by 230bps to 38.6%, but due to the top line decline, actual Gross Profit declined by 6%. More details are likely on the call, but management have reiterated their EBITDA guidance for FY23, albeit lowered its net sales growth target. We will be seeking some answers around Upfield’s commodity hedges, which contributed to lower Gross Profit. Leverage continues to reduce, falling below 7.0x as of September 2023.