Aryzta’s shares slid off five-year highs on Monday as the Swiss-Irish baked goods group reported that organic sales growth eased sharply in the three months to the end of October.
Organic revenue growth during the period slipped to an annual rate of 6.5 per cent from 13.4 per cent for the previous quarter and 22 per cent for the same period last year, driven by an easing of price increases as well as a dip in sales volumes expansion.
However, the company said that it managed to increase its earnings margins sequentially during the period, which it refers to as its fiscal fifth quarter as it moves its financial year from the end of July to align with the calendar year.
Shares in Aryzta, owner of the Cuisine de France brand in Ireland and supplier of par-baked goods to customers from McDonald’s and Subway to Lidl, Aldi and Dunnes Stores, closed down 7.1 per cent at 1.596 Swiss francs in Zurich, having reached a five-year high of 1.75 francs on Friday.
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“The positive organic volume growth reflects the competitive advantages of the bake off category for our customers in a challenging consumer environment,” said group chairman and interim chief executive Urs Jordi.
“We reiterate our expectation for further sequential margin expansion for the remainder of 2023, supported by efficiencies and strict cost discipline.”
Aryzta’s key European business performed “strongly” during the fifth quarter, led by good volume performances in Germany, France and Poland. European channel performance remained consistent with previous quarters.
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Rest of world organic growth was driven by price while volume dipped 0.4 per cent, largely due to temporary issues around the timing of promotional activities in quick-service restaurants.
Mr Jordi, a baker by training and who was appointed chairman over three years ago as part of a boardroom coup, has focused ever since on selling non-core assets following a period of debt-fuelled acquisitions, cutting unsustainably high borrowings and repositioning its baked goods to cater for evolving tastes.
The company has lowered its focus on commodities breads and moved more towards speciality offerings, such as sourdough, high protein and clean-label products.
