Aryzta Struggling with Headwinds and Weak Revenues in North America
30 May 2017 --- Irish-Swiss baked goods group Aryzta is struggling to regain its footing as it publishes its third quarter revenue update for the period ended 30 April 2017.
According to the trading statement, total group revenue increased 2.7% in Q3 to €975.2 million (US$108.6 million). Underlying revenue was flat, while currency added 2.7% growth. Group underlying revenue comprised a negative volume impact of 2.7% and a positive price/mix impact of 2.7%.
On a sequential quarterly basis, Group underlying revenue growth improved by 2%, reflecting a strong performance in Europe, a modest improvement in North America and some weakness in rest of world markets.
“The Group is experiencing ongoing margin pressure from increased headwinds relating to labor issues and negative operating leverage from weaker revenue in North America and from optimizing European capacity, which will take significantly more time to address than expected,” says the statement.
Aryzta Europe Q3 underlying revenue increased by 4.3%. On a quarterly sequential basis underlying revenue growth increased by 3.7%. Meanwhile in North American Q3 underlying revenue declined by 4.3%, which reflects a 1.5% quarterly sequential improvement from the 5.8% decline in Q2.
The specialists in the frozen bakery sector and global supplier of baked goods to the foodservice, retail and to quick service restaurants, has been experiencing tough times recently and the company has been rebuilding its senior team.
New chief executive Kevin Tolan, who used to work for global nutrition group Glanbia and has a deep knowledge of the food sector, replaces Owen Killian.
In terms of its Board, Aryzta announced James B. (Jim) Leighton as the first of two planned additions to its Board as an Independent Non-Executive Director. The appointment is subject to approval by Aryzta shareholders at its AGM.
The Board has also appointed HSBC as its advisers in relation to an evaluation of alternatives for its 49% investment in Picard.
“Work continues on this brief and the Board will communicate any substantial change to the market as early as is practicably possible,” continues the statement.
