Swiss-Irish baking group Aryzta moved into profit last year following significant restructuring of the business, according to the company’s annual report. The group, which owns the Cuisine de France brand here and supplies the likes of McDonald’s and Subway, published its report and results for the year to July 30th, 2022, on Monday.
It shows the group made an overall profit of €900,000 for the period, which was a turnaround from a loss of €235.8 million the year before. “This reflected the benefits of the significant changes and reorganisations made over the past two years to reduce costs, simplify the organisation structure and focus on profitable organic growth,” the group said. “The strong performance was achieved against a backdrop of supply chain disruption and significantly higher cost inflation, especially energy.”
Total revenue increased by 15.1 per cent to €1.8 billion, with businesses accounting for 60 per cent of group revenue exceeding pre-Covid revenue levels at constant currency.
Group organic revenue growth of 17.9 per cent was driven by strong volume growth of 12 per cent supported by price/mix growth of 5.9 per cent.
On a regional basis, Aryzta Europe reported organic revenue growth of 19.3 per cent. Aryzta Rest of World organic revenue was 10.5 per cent higher. All channels performed strongly, achieving double-digit organic growth.
However, the group cautioned that “significant inflation challenges remain” as war, supply chain disruptions and elevated demand drive inflation across all inputs. “Little respite in these trends is expected in the near term, and further price increases are expected,” it said.
Aryzta chairman and interim chief executive Urs Jordi said he expected the company’s performance to improve further in the coming year.
“I am pleased to report that Aryzta has achieved an underlying net profit of €45.6 million in 2022, the first profit for many years. This reflects the benefits of the significant business performance acceleration and structural and operational changes undertaken. The consolidation of our business model has significantly progressed, and we are improving on all levers of value creation. This has supported the significant improvements in our financial position during the past year.
“Aryzta has lower total net debt. While being in the middle of a challenging period of cost inflation, nevertheless we expect to report further improvements in our performance in full year 2023.”
The Aryzta board also announced Mr Jordi has agreed to continue as interim CEO of the group until the end of 2024, when the board will have selected a permanent candidate for the role. “The board extends its appreciation to the chairman for agreeing to continue with the dual mandate,” it said.
In terms of outlook, Aryzta said current trading trends “remain unchanged despite the challenging macro-environment and the recently-published mid-term guidance for the period 2023-25 is reiterated”.