SPECIALITY bakery group Aryzta has reported an 8.6% fall in underlying sales for the year to €3 billion.
Formed out of the merger IAWS and Swiss bakery group Hiestand, the group said sales were affected by sluggishness in the global economy.
Operating profits rose 2.2% to €305 million.
The group, which is quoted in Zurich and Dublin, is proposing a dividend of 36.6 cent.
It warned the operating environment is likely to remain difficult in many key areas of the business.
The group, which owns more than 71% of animal nutrition group Origin, said overall group food sales fell 6.7% to €1.68m over the period but operating profits rose 4% to €227m.
In Europe, underlying sales fell by 8.2%, while in its north American markets sales were down 4.3%, whereas in the rest of the world sales rose 8.4% in the year to July 31, 2010.
A point of note in the accounts was the strong cash flow created in the food operations which at €251m was higher than the operating profits generated in the same period by the group.
Commenting on the results, chief executive Owen Killian said economic conditions for consumers remain tough and Aryzta responded by continuing to focus on operating efficiencies.
It also worked with its retail and food service partners “to provide fresh and convenient, high-quality baked goods at competitive prices,” he said.
Killian expects the operating environment to stay difficult in many key markets and the group is currently focusing “on operational resilience,” he said.
In Europe, the decline in revenue has been mostly evident in Britain and Ireland. The consumer has endured stringent austerity measures, significantly impacting their disposable income, the group said.
Food Europe is a leader in the speciality bakery market in several countries including Switzerland, Germany, Britain and Ireland with sales of over €1bn achieved for the year.Its operating profits fell 2.9% to €131.2m over the period.
Food North America delivered sales of €571.6m which represented a decline of 4.3% and an operating profit that grew 3.6% to €69.9m.
Food Rest of World had sales of €35.8m, an increase of 8.4% while profits were up by 180.9% to €6.0m for the year.
Share in the group were down 2.35% by mid-afternoon, a fall of 80 cents to €33.20.
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