Switzerland-based bakery giant Aryzta, which in January warned its annual underlying profits were on course to be 20% lower year-on-year, today (13 March) reported a fall in its first-half earnings.
Aryzta said its underlying net profit dropped 22.4% in the six months to the end of January to EUR109.4m (US$116.9m). EBITA fell 31% to EUR158.5m.
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In January, Aryzta said its underlying fully diluted earnings per share was tracking around 20% behind the previous year, with the bakery products supplier pointing to challenges in North America and the impact of Brexit.
On a reported basis, Aryzta made a first-half loss of EUR139.4m due to debt-related costs.
Aryzta’s first-half revenue fell 2.8% to EUR1.9bn. The company said its underlying revenue fell by 1.6%, with growth of 1% in Europe and a rise of 9.5% in its rest of the world division offset by a 5.2% drop in North America. “The decrease in North America was primarily due to the continuing impact of long-term contract renewals, together with revenue losses from accelerated in-sourcing by co-pack customers,” Aryzta said.
The company said it had struck agreements on price in Europe “to recover a substantial portion of the UK currency effects going forward, which will begin to benefit during the remainder of the financial year”.
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By GlobalDataMainFirst analyst Alain Oberhuber, who covers Aryzta, described the first-half results as a “mixed bag”, pointing to organic growth from the company’s North America and rest of the world divisions that was “slightly better” than expected – but margin and free cash flow lower than his expectations.
