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.
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.”