Aryzta posts revenue decline after US contract losses
It came after the company saw expected contract renewal volume declines in the US. However, CEO Owen Killian said this dip was in line with expectations.
The company posted total sales for the three months to the end of October of €962.3m ($1.02bn), with underlying revenue down 1.2%.
The Swiss Irish food firm said its European operations saw a “solid volume performance” of 1.8%, but revenues dipped 1.4% to €436.3m ($464.6m), due to currency volatility and the €150m ($156m) investment in additional bakery capacity at its manufacturing site in Germany.
Its North American revenues were also down by 7.5% to €462.5m ($492.4m), attributed mainly to the drop of long term contract renewals with a small number of key customers in the US.
Conversely, good performance was felt in the Rest of the World markets, which jumped by 21.1% to €63.5m ($67.5m).
According to Killian, Aryzta remains focused on “unlocking the underlying revenue development of its assets and demonstrating its strong cash generating capacity.”
It expects financial costs for 2017, including hybrids, to be between €80-€95m ($85-$100m).
The reduction in total group debt funding costs will provide earnings per share (EPS) support for the upcoming financial year.
Aryzta specialises in baked goods and owns the Cuisine De France and Otis Spunkmeyer brands, among others. The Zurich-based company reported a €3.82bn ($4.06bn) revenue in 2015, down from €4.8bn ($5.1bn) in 2014.