Thursday, 14 December 2017

 

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Baked goods firm Aryzta has seen its revenue fall by 5.5% year-on-year to EUR909.7m in the three months to October 31, according to the financial announcement made by the company.

Group organic revenue declined by 2.6% in the period. Currency had a 2.9% negative impact on revenue.

In Europe, despite the expected reduction from Swiss in-sourcing, the company, whose brands include Cuisine de France, experienced organic growth of 0.6%, which was then offset by negative currency headwinds of 0.9%.

In North America, Aryzta saw its organic revenue decline by 7pc in the three-month period, driven entirely by its Cloverhill business, which Aryzta acquired in 2014.

These are site specific issues relating to volume losses arising from the strategic misstep into the B2C center aisle, high labor turnover, recruitment costs and continuing labor inflation, which remains a key challenge in the US.

Canada is performing well, with solid volume growth driven by both retail and QSR innovation-led product customization.

Currency had a further 4.5% negative impact on revenues in the North American market.

There was some good news, with the company experiencing organic growth of 7.8% in the rest of the world market, however this was offset by a negative currency impact of 5.3%.

Excluding Cloverhill, group revenues grew by 1.3% overall on an organic basis.

Commenting on the results, Aryzta CEO Kevin Toland said that the business challenges remained unchanged from those outlined in September, with Europe continuing to perform to expectation. However, he said that progress at Cloverhill was proving "difficult".

Kevin Toland said: “The business challenges are unchanged from those outlined in September. Europe continues to perform to expectation, including Germany, with broadly based growth across the region offsetting planned Swiss in-sourcing. Progress at Cloverhill in North America is proving difficult. Management’s priority is to continue to identify issues and opportunities to address operating performance and to maximize available free cash flow.” 

Related articles: 

Aryzta Appoints Kevin Toland as CEO 

Important Management Changes for Aryzta

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