ZURICH, SWITZERLAND — Revenues in the North America division of Aryzta totaled €462.5 million ($489.1 million) in the first quarter ended Oct. 31, down 7.5% from the same period a year ago.
“This decline consisted of an underlying revenue decline of (4.7%) and disposals of (3.3%), with a positive currency impact of 0.5%,” Aryzta noted in a Nov. 28 trading statement. “The volume decline of (5.7%) in North America largely reflects the impact of volume losses arising from the renewal of long-term contracts completed during F.Y. ’16. This was mitigated by a positive price/mix performance of 1%, primarily as a result of changes in customer product portfolios.”
Aryzta said underlying revenue growth in North America, excluding contract renewals, fell 1.9% in the first quarter, reflecting timing of new business listings.
“These volumes are expected to be replaced by the solid pipeline of new food items,” the company said. “Aryzta’s brand roll-out continues to gain listings, in line with the phased development program.”
Overall, total group revenue in the first quarter totaled €962.3 million ($1,017.9 million) at Aryzta, down 3.3% from the same period a year ago.
|Owen Killian, c.e.o. of Aryzta|
“The revenue development in Q1 F.Y. ’17 is in line with our expectations,” said Owen Killian, chief executive officer. “The weaker underlying revenue development reflects the impact of expected contract renewal volume declines in North America, timing of new business listings, as well as a subdued European performance disrupted by consolidation of manufacturing activities in Germany.“Aryzta remains focused on unlocking the underlying revenue development of its well invested assets and demonstrating its strong cash generating capacity. The material reduction in total group debt funding costs will provide e.p.s. support for F.Y. ’17. Our outlook for both free cash generation and for underlying fully diluted e.p.s. remains unchanged.”