SCHLIEREN, SWITZERLAND — Total revenues at Aryzta AG fell 20.3% to €672.6 million ($808.2 million) during the first quarter ended Oct. 31, dragged down by coronavirus-related declines in the company’s foodservice operations, the Schlieren-based company noted in a Dec. 1 trading update. Aryzta said the declines outweighed improvements recorded in the company’s quick-service restaurant and retail channels.
“The Q1 results were broadly in line despite the significant COVID-19 related disruptions and associated higher costs and suboptimal capacity utilization rates,” said Urs Jordi, chairman and interim chief executive officer. “I want to thank all our employees directly for their enormous efforts to ensure that our customers continue to enjoy high levels of service and high-quality products.
“The next phase of Aryzta’s journey back to improved performance, reduced complexity and the empowerment of local teams has commenced. Our new business model changes to a simpler country focus model with deeper customer relationships. This will lead to organic growth, lower costs and improved margins, and all of this guided by the significantly enhanced bakery, financial and turnaround experience at governance and operational level.”
Aryzta North America sustained an organic revenue decline of 16.2%, which included a volume decline of 15.7% with a price/mix effect of 0.5%.
“COVID-19 cases continued to climb across the US and the Canadian metro areas, and more restrictions are expected albeit not on a national level,” Aryzta said. “QSR was adversely affected by the closure of restaurants and public places but key customers have been able to partly mitigate this by stronger take-out and drive-thru services and an improved digital offering. Foodservice continued to lag due to the wide-spread restrictions on in-restaurant dining, working from home and other restrictions stemming from the COVID-19 pandemic. The retail channel remained relatively stable in this period.”
In Europe, Aryzta reported an organic revenue decline of 15.7%, comprising a 0.1% price/mix decline and a volume decrease of 15.6%. Aryzta said most countries in Europe recently have experienced an uptick of COVID-19 cases, and additional restrictions or lockdowns were imposed by governments.
“Large retail remained relatively robust even though revenue was impacted by social distancing regulations and ongoing changes in customer behavior to packaged goods,” the company said. “QSR performed comparatively well despite restrictions to indoor dining. Foodservice is still significantly impacted by COVID-19 restrictions.”
Elsewhere, Aryzta said its Rest of World operations sustained an organic revenue decline of 9.9% in the quarter. Foodservice and QSR have been affected by a second wave of restrictions in several countries in Asia Pacific, Aryzta said, while certain countries, such as Japan, have been impacted by a lack of tourism. Meanwhile, demand in the QSR channel has held up relatively well, compared to other markets, due to drive-thru and delivery services remaining open, Aryzta said.