Monde Nissin guides 'single-digit decline' in Q4 meat alternative sales

Monde Nissin [MONDE 8.30, up 1.8%; 62% avgVol] [link] put out a press release to tease a patchwork of FY23 and Q4 metrics. In the Meat Alternatives section, MONDE said that the non-meat protein segment “continues to navigate in a challenging environment”, and MONDE provided guidance that there would be a “single-digit decline for the fourth quarter” in this segment, but that the segment would “[be] at least EBITDA neutral”. MONDE then said that its annual impairment test for the meat alternative segment is “ongoing”, but that the company believes “the family’s financial support will largely cover any potential impairment at the parent level.”

MB bottom-line: It’s not super clear to me what MONDE is talking about when it mentions the “family’s financial support”. If this is referring to the bizarre top-up mechanism that MONDE announced back in November, then I’m not sure how appropriate it is to claim that support to “largely cover any potential impairment” when (1) support is not provided on an annual basis, (2) the one-time top-up would be paid in 2032, and (3) the top-up mechanism caps the family’s commitment at 12% of the value of MONDE’s stock in 2032. I don’t think it’s at all obvious to anyone whether that vague commitment covers whatever impairment charge the meat alternative business will require at the MONDE level for FY23. I don’t like how the company is using this commitment to minimize the importance of the forced revaluations of its meat alternative business and pre-empt criticism of its strategy.       

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