Aryzta: €300m spend on efficiency

ARYZTA, the Irish-Swiss bakery group, is to invest €100 million per annum for the next three years improving internal efficiencies.

That investment, which is due to begin in 2012, will aim to build on what has been a strong performance this year.

Yesterday, the company — which grew out of the 2008 merger between IAWS and Swiss bakery group, Hiestand — reported a 53.5% increase in revenue, to just under €2.6 billion, for the 12 months to the end of July.

Pre-tax profits were up from just over €253m to €333m, while net debt was reduced by over 10% to €955.5m. A full-year dividend of 46.52c has been proposed.

On a group basis — when Aryzta’s 71.4% stake in Irish agri-services company, Origin Enterprises is included — revenue was up by nearly 29% to €3.88bn, with underlying fully diluted earnings per share rising by 27.1% to 310.1c.

Last week, Origin reported a near 11% increase in operating profits and a 17% rise in revenue for its latest financial year.

Aryzta is saying that the consensus forecast for its current year (up to July 2012) earnings per share — of 338c — “appears reasonable, at this early stage of the year”, adding that its 2013 underlying earnings per share target remains at over the 400c mark. It added that it expects to boost revenue by €78m in its current year; mainly on the back of first-time contributions of previously announced acquisitions in Britain and the Far East, which are due to be completed in the first quarter of 2012.

Chief executive Owen Killian said 2011 was a year of “substantial repositioning” for the company and that next year will be one of “significant change” for the group, operationally speaking.

“Aryzta is now much better positioned opposite consumers, with greater global access to limited-serve restaurants and retail; complementing our well-established deeply distributed foodservice business,” he added.

Mr Killian noted that consumer confidence improved during the 12 months, but said that the company would be working with its customers to try to manage input price inflation, as consumer are still faced with tough economic conditions.

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