The large international fast food chains have had an excellent third quarter. These companies are showing good growth across the board. Not only compared to the corona year 2020, but also compared to 2019. How do these results affect the operating results of the French fries suppliers?
Restaurant Brands International (RBI), the parent company of Burger King, among others, saw global turnover grow by 2021% in the third quarter of 11 compared to the same period a year earlier and 5% compared to the third quarter of 2019. total revenue in the third quarter of this year amounts to $9.378 million and EBITDA (gross profit) $607 million, a growth of 8% compared to last year. In the explanation of the figures, RBI states that with these figures the company is on track to achieve a turnover for the 2021 financial year that is comparable to the pre-corona period, and growth is expected again for 2022.
McDonald's also saw strong growth last quarter, namely 12,7% compared to the third quarter last year and 10,2% on a two-year basis. Total worldwide sales were $13 billion. In the notes to the figures, the company writes that the international markets in the UK, Canada, France and Germany have done relatively well due to fewer restaurant closures and the relaxation of corona measures. McDonald's has adjusted its revenue growth forecast upwards for the fourth quarter of 2021. Profits could be slightly lower due to rising costs.
Turnover is growing, margins under pressure
The listed chip manufacturer Lamb Weston also showed turnover growth in the quarterly figures for the first quarter of 2021 (broken financial year). The company's net sales were $984 million. That is a growth of 13% compared to the same period last year. EBITDA fell by 39% to $123 million.
“Our first quarter figures reflect the broad recovery of the frozen potato products market,” wrote Tom Werner, CEO of Lamb Weston, in the notes to the figures. "But the effects of the extremely warm summer in parts of the American West have had a negative impact on potato yields." In addition, the CEO points to highly inflationary input and transport costs, tightness on the labor market and disruptions in the chains. That puts a lot of pressure on the results. “We therefore expect gross profit margins to remain below pre-coronavirus levels through fiscal 2022,” Werner wrote. The company also reports that it expects that the costs of potatoes per kilo in the American home market will rise during the season due to disappointing quality due to the extreme summer.
Lamb Weston is taking targeted measures to meet these challenges. Most striking, according to Werner, are the actions to compensate for raw material inflation through pricing, to restructure the freight policy and to optimize production and personnel planning.