Bakery group Aryzta sees revenues rise and hints at further acquisitions

Bakery group Aryzta has said that consolidation opportunities to extend its market share continue to exist, although financial discipline and strong cash generation will remain its key strategies.

The Zurich-headquartered group yesterday reported third-quarter revenues (for the three months to the end of April) of just over €1.37bn. This represents a year-on-year rise of nearly 17%. Group revenue for the first nine months of its financial year (which runs to the end of July) grew by just over 7%, year on year, to €3.47bn.

Like-for-like third-quarter revenue growth in Aryzta’s North American division amounted to 2.7%, with the previously under-performing European arm up by over 4% and the rest of the world ahead by 7.4%.

Management has also kept full-year guidance — of double-digit growth in underlying fully-diluted earnings per share — unchanged.

Aryzta chief executive Owen Killian said the two acquisitions management announced in March — bakery businesses in the US and Canada — were completed in the period under review and contributed to the overall improved revenue. He also hinted at the prospect of more deals being done.

“Consolidation opportunities, to extend market share and customer relevance in what is a fragmented sector, continue to exist. Financial discipline and strong cash generation remain key strategies underpinning future growth and diversification,” Mr Killian said.

Analysts noted the step-up in organic growth, particularly the European growth and the early benefits of the Aryzta transformation initiative improvement programme.

“Through its change programme, Aryzta is laying the foundations for the next phase of development, while creating a more sustainable business model,” said Davy Stockbrokers’ Cathal Kenny.

Liam Igoe of Goodbody Stockbrokers added: “The improved performance in like-for-like growth in the third quarter reaffirms our belief that Aryzta will see the benefits of transformation initiative improvement materialise in its sales and profit growth in the next few years.”

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