Aryzta’s Q1 results show strong growth

SPECIALITY bakery group Aryzta’s first-quarter results to the end of October 2010 show strong revenue growth boosted by recent acquisitions.

The Zurich-based group, which owns Cuisine de France, did not give a profit figure for the three months to the end of October 2010, but said Earnings Per Share (EPS) for its 2011 financial year should reach 45 cents.

The figures show sales in the food group rose over 55%, driven by acquisitions, which accounted for 51.3% of the total increase.

Total sales for the period reached €970.8 million, of which its 71% subsidiary Origin Enterprises accounted for €338.9m.

On the food side the returns show a varied pattern, with Ireland and the British market struggling due to weak demand.

The Irish market now accounts for just a small part of the group’s total business, which is in the process of being integrated with the Hiestand operations to form a single unit to service both markets.

Food Europe revenue grew by 8.1% to €289.7m, with acquisitions contributing 7.4% of that increase.

Underlying revenue declined by 2.4% while Aryzta said sales declines in Britain and Ireland is moderating.

Revenue growth is starting to emerge in continental Europe supported by continued investment in new field sales staff focused on the independent segment, its statement said.

North American revenue grew by 125.1% to €299m, with acquisitions contributing 117.0% while underlying sales fell by 1.4%.

Rest of the World revenue grew by 569.9% to €42.3m with acquisitions contributing 527.3%.

Further investments of ($48m) are being made in Asia and Latin America to service the quick-service restaurant (QSR) segment, announced in August 2010.

That involves investments in bakeries in Taiwan, Singapore and Malaysia (not yet completed) as well as the construction of a new bakery in Brazil.

Commenting on the outlook, chief executive Owen Killian said the group would continue to “focus on product innovation and customer support. Servicing the needs of economically hard-pressed consumers requires an even greater investment in product selection and availability”.

NCB Stockbrokers welcomed the results and has a ‘buy’ recommendation on the stock.

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