Aryzta insists well positioned to capitalise on consumer trends

Aryzta insists well positioned to capitalise on consumer trends

Bakery group Aryzta booked a near 13% increase in full-year revenue this morning (28 September), as the contribution from acquired businesses and favourable currency exchange more than offset declining organic sales.

Looking at continuing operations, which excludes the contribution from agrifood business Origin Enterprises of which Aryzta is no longer a shareholder, revenue rose 12.6% to EUR3.82bn (US$4.26bn) in the 12 months to 31 July. Acquisitions and currency exchange accounted for 7.1% and 7.7% of growth respectively. Underlying sales dropped 2.2%, due to a 6.2% decline at Aryzta's North American unit.

MainFirst analyst Alain Oberhuber said organic growth missed his expectations of a fall of 1.6% but noted "a gradual improvement in North America".

EBITA increased 5.7% to EUR514m, with EBITA margins down by 80 basis points to 13.5%. The lower margin was driven by a 160 basis point drop in Europe and a 30 basis point decline in North America. The rest of the world segment maintained its margin at 11.65%.

Underlying net profit from continuing operations – excluding the divested Origin Enterprises business - increased 1.7% to EUR330m.

Aryzta CEO Owen Killian said the company has continued to invest in updating its customer proposition and transition to a "speciality" food business. "Aryzta has been in constant evolution to remain relevant to consumers as changing consumer trends negatively impacted parts of our business. This involved significant capital investment of EUR1.3bn and acquisitions of EUR2.4bn to reposition the business since FY 2010. Aryzta is now fully focused on speciality food, with the divestment of our Origin investment and reinvestment in Picard."

Click here for our analysis of Aryzta's investment in French frozen food retailer Picard, a deal announced in March.