FDBusiness.com

Zurich-based ARYZTA has completed its transformation to a business fully focused on speciality food following completion of the disposal of its 68.1% stake in Origin Enterprises, the agri-services group, including €225 million post year-end. For the year ended 31 July 2015, ARYZTA reported a 12.6% increase in revenue to €3.820 billion for the continuing operations of its core Food Group, reflecting the benefits of acquisitions and favourable currency factors, although underlying revenue declined by 2.2%.

Revenues at its Food Europe business increased by 3.8% to €1.647 billion with 1.0% underlying growth, while its Food North America revenues increased 22.4% to €1.942 billion but with a 6.2% underlying decline. Food Rest of World revenues increased 4.7% to €231 million with 3.3% underlying growth.

ARYZTA’s EBITA increased 5.7% to €514 million as Food Europe’s contribution declined by 7.9% to €212 million and Food North America’s profit rose by 19.4% to €275 million. Food Rest of World increased EBITA by 4.6% to €27 million.

The group EBITA margin decreased by 80 bps to 13.5% with Food Europe’s margins declining by 160 bps to 12.9% and Food North America’s margins by 30 bps to 14.2%. Margins at Food Rest of World were maintained at 11.6%.

Owen Killian, chief executive of ARYZTA, comments: “ARYZTA has been in constant evolution to remain relevant to consumers as changing consumer trends negatively impacted parts of our business. This involved significant capital investment of €1.3 billion and acquisitions of €2.4 billion to reposition the business since FY 2010. ARYZTA is now fully focused on speciality food, with the divestment of our Origin investment and reinvestment in Picard.”

ARYZTA paid €446.6 million for a 49% strategic stake in Picard, a speciality premium French food business.

He continues: “FY 2015 has been a disappointing year for shareholders as underlying revenue growth failed to materialise, resulting in negative operating leverage. Our focus is now on delivering the underlying revenue growth potential of the business, which is expected to generate a tenfold expansion in free cash generation in FY 2016 to €200 million+ and building further thereafter. We expect to achieve underlying fully diluted EPS in the range of 365- 385 cent for FY 2016.”