Flora - comment

The key investor debate for Flora Food Group remains the sustainability of revenue growth. Management continues to guide to low single-digit net sales growth, which is still expected to be largely price-led, while volume/mix declined by 2.4% in FY25 following a 1.2% decline in FY24. These headline figures mask a shifting business mix, with the mature spreads category, historically the cash engine, likely experiencing a steeper underlying decline. We intend to undertake further work to assess the medium-term growth outlook for FY26 and beyond.

Operationally, the group delivered a second consecutive quarter of organic growth in Q4, with net sales up 1.1%, driven by pricing and strong AMEA performance, as Europe stabilised and the Americas remained under pressure. Margins softened as input cost inflation and mix effects outweighed pricing and savings, although EBITDA remained resilient. For FY25, sales broadly stabilised with a clear second-half inflection, supported by new categories and foodservice, while leverage remained elevated at 6.4x; refinancing actions and the planned LATAM disposal support a renewed focus on deleveraging into 2026.