Lending restrictions impacting Aryzta revenue

By Jane Byrne

- Last updated on GMT

Related tags Generally accepted accounting principles

Swiss bakery group Aryzta had a decline in revenue of 7.4 per cent, which translated as €800.9m in the first half of 2009, with consumer and customer limited spending power cited as the chief factor for the decrease.

The company said though that operating profit remained constant at €106.5m, with underlying net profit growth of 1.1 per cent to €73.8m for the first six months ended 31 January 2010.

Aryzta is based in Zurich with operations in North America, Europe, South East Asia and Australia, and was formed in 2008 from the merger between Irish food group IAWS and Swiss baker Hiestand.

The group’s brands include Cuisine de France and Delice de France.

Chief executive Owen Killian said the economic recovery had yet to reach consumers, who were still adjusting their spending patterns in response to tough economic conditions: “Credit availability remains difficult for many customers who need to maintain and develop their consumer-facing investment.”

The group claims to be the leading player in the speciality bakery market in Switzerland, Germany, Poland, France the UK and Ireland but tough trading conditions in Europe saw like-for-like revenues for the six-month period falling 10.1 per cent.

Ireland and Britain were particularly hard hit. In other European countries though, revenue growth from new customers partially offset slower revenues, said the firm.

And the Swiss company said that operating profit for the division fell 5.1 per cent to €60.7m. .

In North America, food division revenues fell 2.7 per cent on a like-for-like basis to 254.7 million but operating profit rose 2.8 per cent to €35.3 million as the firm focused on operating efficiencies.

In the company’s food developing markets sector, like-for-like revenue growth was 3.4 per cent, while operating profit grew 126 per cent to €2.1 million in the period.

“There are no signs of any significant consumer recovery in the US with consumers continuing to conserve their dollars and customers not making decisions required to stimulate revenue growth,”​ the company said.

The group said it will continue its focus on maximising cash generation and operating efficiencies and stated that the business has an efficient cash generative business platform and is thus very well positioned to benefit from future economic growth: “The fragmented bakery market offers opportunities for disciplined strategic expansion.”

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