Aryzta revenue down 7% in North America as European growth continues

By Vince Bamford contact

- Last updated on GMT

Aryzta in benefiting from in-store bakery growth in Europe. Photo: iStock - destillat
Aryzta in benefiting from in-store bakery growth in Europe. Photo: iStock - destillat

Related tags: North america

Speciality baking business Aryzta has again reported mixed fortunes across its business – with sales declining in the US and growing in Europe.

Zurich-based frozen and par-baked bakery supplier Aryzta has announced a 7% year-on-year fall in revenue from its North America division to €473.5m ($528.5m) in its third quarter. Factors including disposals and currency movement had contributed to the decline, said the company. Underlying revenue was down 2.3% versus a 4% decline reported last quarter.

Despite the slump, it claimed the North America speciality bakery market was displaying “attractive growth opportunities,” ​adding the sector had responded positively to increased investment in the La Brea Bakery and Otis Spunkmeyer brands.

Aryzta said it has signed all outstanding long-term supply chain contract renewals and that, excluding revenue with customers impacted by contract renewals, underlying revenue growth in North America was 4.7% in the quarter, driven largely by new food items.

Europe revenue up 3.6%

In contrast to the North America performance, revenue from Aryzta’s Europe division grew 3.6% in the third quarter to €420.3m ($470m) despite a 1.4% negative effect from currency movements. Underlying revenue growth increased 3.9% in the quarter.

The company said its performance in Europe continued to benefit from the growth of in-store bakery, driven primarily by demand in the discounter channel.

It added that it had made “good progress​” on commissioning new capacity in Europe, and that further benefits were likely from new efficiency and cost reduction initiatives.

Group-wide efficiencies

Aryzta said it has identified potential for group-wide efficiencies and cost reduction, which will lead to one-time cash non-recurring costs in the current financial year.

These will enhance our future competitiveness in a market that continues to demonstrate attractive growth​,” said Aryzta chief executive officer Owen Killian.

Total group revenue declined 2.4% in the quarter to €949.8m ($1.060m), with underlying revenue growth of 0.9%.

Third-quarter revenue development confirms an improving trend in all regions​,” said Killian. “Outstanding long-term contract renewals are now signed, adding greater visibility to our revenue and validating Aryzta’s investment in the long-term customer partnership model​.”

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