Aryzta first-half sales hit €1.89bn

ARYZTA, the food group formed from the 2008 merger of Dublin-based IAWS Plc and Swiss bakery group Heistand, has reported a solid rise in sales of 36% in the first half to €1.89 billion.

Group earnings before interest, tax, and amortisation rose 52% to €173.1 million while earnings per share increased 34% to 140.3c.

Aryzta, which controls more than 71% of Origin Enterprise, which operates in the agri-business sector, said in the period just gone “the speed and severity of food raw material price increases was unexpected” and has become a major focus in the business.

Chief executive Owen Killian said: “In such an inflationary environment, bakery plays an important role in a food menu or basket and provides an innovate value proposition for consumers.”

He said the major feature of the results was “the enormous contribution” from recent acquisitions, but “we are most encouraged by the improvement in underlying revenue growth as consumers adjust to improving economic circumstances in most markets.”

The clearest example of that dramatic shift was in North America where the group saw food revenues for the six months ended January increase by a massive 140%, helping to push the total food group revenue up to the figure of €1.28bn.

In Europe, food revenues rose 10%, reflecting the slower pace of economic recovery, while food sales in the rest of the world jumped 591%.

The group reduced its net debt by 4.6% to €1.06m.

Food analyst John O’Reilly said the first-half figures were impressive.

He also noted the group was on target to deliver the medium-term earnings targets set at the formation of the group. Anticipated cost savings driven by consolidation of the North American sweet baked-good operations should “go a long way to assuring those targets”, he said. The growth shown in the first-half figures should also help to see those targets realised, he said.

Any concern ahead of the results about “the vulnerability of the business to soft demand and cost pressure should be hugely allayed. We maintain our ‘outperform’ rating,” he said.

Aryzta, which owns Cuisine de France, has operations in Europe, North and South America, Southeast Asia, Australia and New Zealand.