ZURICH, SWITZERLAND — The board of directors of Aryzta AG has approved a three-year restructuring plan aimed at restoring financial flexibility and improving the company’s asset and cost base to its current revenue run rate. The plan is expected to deliver €200 million in cost savings over three years, Aryzta said.
The announcement was made in conjunction with the release of Aryzta’s third-quarter trading update.
Revenues in the North America division of Aryzta totaled €340.4 million ($399.3 million) in the third quarter ended April 30, down 28% from the same period a year ago.
“Organic revenue declined by 1.3%, while disposals (Cloverhill) and currency had negative impacts of 16.1% and 10.8%, respectively,” Aryzta said. “Against the backdrop of a strong customer base, North America volumes declined nonetheless by 1.9% while price/mix was a 0.6% positive. The North America business faces continued challenges from sustained high labor and distribution costs, which are not yet recovered by pricing initiatives.”
Revenues in the North America division totaled €1,126.8 million in the nine months ended April 30, down 19% from the same period a year ago.
“Aryzta has identified and is addressing the challenges facing the historical business model and the industry generally and will stay focused on its core, the frozen B2B bakery market.”
— Kevin Toland, Aryzta
Overall, total group revenue in the third quarter totaled €811.4 million ($951.6 million), down 17% from the same period a year ago. In the nine months ended April 30 total group revenue was €2,598 million, down 10% from the same period a year ago.
“Aryzta has identified and is addressing the challenges facing the historical business model and the industry generally and will stay focused on its core, the frozen B2B bakery market,” said Kevin Toland, chief executive officer. “As part of the ongoing process, the group has sold selected loss-making assets, rationalized headcount, and under the new management put in place a series of efficiency and cost reduction activities to accelerate performance improvement. As part of this process, we are also today announcing a three-year, €200 million restructuring and cost reduction plan aimed at restoring financial flexibility and aligning our asset and cost base with current and expected business conditions.”