The La Brea Bakery and Cuisine de France owner reported a 2.1% revenue decrease of €908m ($1.07bn) to €3.8bn ($4.5bn) for FY 2017.
It said its North American profits nose-dived by 5.7% to €1.7bn ($2.01bn) on the back of declines with contract renewal customers.
The company claimed shareholders are also uneasy about former CEO Own Killian’s move away from its core business of niche food production into the highly competitive French retail market with the acquisition of frozen food chain Picard in 2015.
Killian and three other senior management members left the company in March.
According to the Zurich-headquartered company, it paid €10.4m ($12.3m) to the four executives to cover the remaining contractual employment period and the 12-month post-contractual term non-compete agreements.
Aryzta’s new CEO – former Dublin Airport Authority CEO Kevin Toland – took up his role on September 12.
Frédéric Pflanz – executive Board member of Maxingvest, parent company of coffee and retail business Tchibo and personal care company Beiersdorf – will commence as CFO at the beginning of 2018.
Stabilising the company’s operations in North America and managing debt are seen as major priorities for the new management team.
The company said it had taken a non-cash charge of €860m ($1.02bn) for the year, mainly related to significant volume declines and increased labour costs in North America.
Brexit effects cross-border revenues
Aryzta’s European revenues also decreased, by 5.7% to €1.74bn ($2.06bn), primarily due to the challenges in transferring 225 SKUs from its Fricopan facility in Germany to its new bakery facility in Eisleben, as well as the currency impact of Brexit on cross-border revenues and input costs in the UK.
Aryzta also announced its five-year €1.8 billion refinancing has been completed, with the facilities underwritten by Bank of America Merrill Lynch, HSBC, Rabobank and UBS.
The new financing was utilised to repay in full the revolving credit and term loan facilities put in place last year.
Significant butter price inflation also impacted results in the second half of the year.
However, the company’s revenues in its Rest of World business – including Brazil, Australia, New Zealand, Japan, Malaysia, Singapore and Taiwan – increased by 15.8% to €259m ($307m).
Underlying net profit fell 42.5% to €179m ($212m) and EBITDA was down 31.1% to €420.3m ($499m).
Aryzta noted its joint ventures – including the 49% stake in Picard and a 50% interest in Signature Flatbreads – performed well, contributing €21.3m ($25.2m).
The group forecasts its FY2018 EBITDA to be broadly in-line with this year’s results and said it will be refocusing on core B2B Frozen Bakery and European Food Solutions businesses.