Profits Fall Over Eight Percent at Aryzta

27 Sep 2016 --- Contract renewals in the US are to impact the 2017 revenues at Aryzta, which has reported that pre-tax profits fell 8.3 percent year-on-year to €365.5m ($410m) in the year ending July 2016.

Aryzta, which was formed between the 2008 merger of Ireland's IAWS and Switzerland's Hiestand, reported revenues of €3.95bn ($4.4bn), up 1.5 percent.

The Irish-Swiss baked foods group said revenue growth had been "subdued" by the impact of contract renewals in North America during 2016, which will also impact its financial performance next year.

However, Aryzta said the contracts had now been signed off and that the negative impact they had on sales had been mitigated by growth in all regions.

However, its shares were down close to two percent after the results were announced.

Aryzta Chief Executive Officer Owen Killian said: "Consumer demand for high-quality speciality food is increasing, whether out of home or through modern retail, focused on freshly baked and prepared food, offering convenience and choice."

Revenues in Europe came in at €1.75bn ($1.97bn), up 6.1 percent while they were down 1.8 percent to €1.91bn ($2.15bn) in the US.

In Europe, it said investment in enhanced bakery capacity in Germany had impacted production and new product development.

Its Food Solution business in Ireland and the US showed a "good recovery" but its business in France suffered from a drop off in tourism numbers due to heightened security concerns.

In Switzerland, the strong Swiss franc continues to impact its pricing, Aryzta said.

It said its recent European acquisitions of Fornetti and La Rousse performed well during the year.

Last year, Aryzta invested €450.7m ($506m) in a 49 percent interest in the French speciality food business Picard.