Cuisine de France owner Aryzta ‘on track’ to deliver full-year profit

Cuisine de France owner Aryzta has reiterated its profit guidance for the 2023 financial year after delivering group revenue growth of 20 per cent in the three months to the end of October.

In its first trading update of the new fiscal year, the Zurich-headquartered company said first-quarter revenues grew by 19.8 per cent across the group’s operations, particularly in Europe, where Aryzta achieved organic revenue growth of more than 22 per cent. This was driven by “very strong” growth of 19.7 per cent in the price of its products, the company said.

The company is not seeing any reduction in upward inflation trends, chairman and chief executive Urs Jordi said on Monday.

“Aryzta is communicating closely with all customers and working hard with them to manage these significant inflationary pressures. However, the persistent high level of cost inflation is such that further pricing will have to follow,” he said.

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“We reiterate our full year 2023 guidance to deliver further improvements across all key metrics, with performance expected to accelerate in the second half of the year. This takes into account the risks around the ongoing challenges of inflationary price recovery and the highly uncertain macroeconomic environment.”

The update comes after the Swiss-Irish baking group, which had struggled in recent years, delivered a €900,000 surplus in the year to the end of July, the company said in October. That compared to a loss of €235.8 million the year before.

The Irish Times reported earlier this month that a major shareholder advisory firm had highlighted its concerns about Aryzta’s plans to allow Mr Jordi to continue in his dual roles of chairman and chief executive.

Institutional Shareholder Services (ISS) said that a “qualified vote” to re-elect Mr Jordi as a director and chairman was warranted at the group’s upcoming annual general meeting on November 30th. However, it added that the group had offered a “compelling rationale” for Mr Jordi to continue in both roles for the time being.

Concerns about a 702,000 Swiss franc (€716,500) bonus paid to Mr Jordi and €391,000 of retention bonuses to other executives in 2021 drove an investor revolt against the group’s remuneration report at its agm last November. However, ISS has welcomed Aryzta’s “responsiveness to shareholder concerns” by saying that it will refrain from making such payments in future.