EQS-Adhoc: Brödernas files for corporate restructuring

Restaurant group Brödernas today filed a corporate restructuring application to secure the future of the group. During the restructuring process, Brödernas restaurants will be open as normal.

Brödernas, including Brödernas Group AB (publ), today filed for corporate restructuring. The aim of the restructuring is to secure the group’s long-term financial stability and address the economic challenges that have arisen in the aftermath of the crisis. among other things the pandemic, inflation, higher interest rates and higher rental costs.

Brödernas’ request for corporate restructuring requires court approval. The restructuring process is then expected to be carried out over the next three to six months. During this time, both financial and operational changes will be implemented to return to a sustainable and profitable business. In connection with this, Brödernas also publishes a long-term financial plan including a turnover and profitability forecast for 2024, 2025 and 2026 based on the objectives of the corporate restructuring.

Background and reasons for Brödernas’ corporate restructuring

Brödernas was founded in 2017 and today operates approximately 70 restaurants across the country with approximately 500 employees and more than four million guests annually.

Recent years have been marked by a series of unforeseen events that have created difficult conditions for the restaurant industry. The pandemic and the fallout from Russia’s invasion of Ukraine have led to severe inflation with significantly higher costs for raw materials and other operating expenses. This, together with rising interest rates and reduced purchasing power of consumers, has changed the circumstances for the group and the restaurant industry in general.

Brödernas’ restaurants have also been hit by significant rent increases. The average increase over the past two years is 18% as a result of index adjustments in the rental agreements. In addition, the increased use of third-party home delivery services is negatively impacting profit margins.

“Despite extensive measures to address these challenges, including the sale of unprofitable restaurants, renegotiation of supplier agreements, streamlining staffing levels and launching a loyalty program, the financial situation has unfortunately become unsustainable for us,” said Richard Forsshéll, CEO from Brödernas.

Brödernas therefore believes that the restructuring of the company is a necessary step to secure the future of the group and protect the jobs that Brödernas creates.

“Brödernas has a solid foundation and a strong brand. With the right measures, I see good opportunities for the group to regain its strength and remain an important player in the Swedish restaurant market,” says Lars-Henrik Andersson, the intended administrator. by Cirio Advokatbyrå.

Long-term financial plan including turnover and profitability forecast

In connection with the corporate restructuring application, Brödernas also publishes certain preliminary estimates regarding the financial development of the group for the remainder of 2024 and for the full years 2025 and 2026. These figures are Brödernas’ estimates, based on some very uncertain assumptions . among other things that the reorganization of the company is completed as intended. The figures have not been revised or reviewed by Brödernas’ accountant and the final result may differ significantly from Brödernas’ estimates. Brödernas makes a preliminary estimate that the group’s 2024 revenue will be approximately SEK 542 million and EBITDA will be approximately SEK -26 million. For the full year 2025, Brödernas estimates that sales will be approximately SEK 563 million and EBITDA will be approximately SEK 7 million. For the full year 2026, Brödernas estimates that sales will be approximately SEK 597 million and EBITDA will be approximately SEK 36 million.

For more information please contact:

Richard Forsshéll, CEO Brödernas

Email: (email protected)

This information is of such a nature that Brödernas Group AB (publ) is obliged to make public under the EU Market Abuse Regulation (EU No. 596/2014). The information was submitted for publication, via the contact person provided, on October 16, 2024 at 9:00 AM CEST.

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