Aryzta enjoys 13% revenue growth as food services rebound

Cuisine de France owner warns that inflation will negatively affect its prices this year

Swiss-Irish food group Aryzta enjoyed organic revenue growth of 13.3 per cent in the six month period to January 2022 as food services witnessed the "greatest recovery" from the Covid-19 crisis.

Aryzta, which owns the Cuisine de France label here and supplies the likes of McDonalds and Subway, said the performance was driven by volume growth of 11.3 per cent as "society normalisation took hold".

It achieved overall organic revenue growth of 13.3 per cent. Pricing impact accelerated in the second quarter and this trend is expected to accelerate further in the second half of its financial year to recover costs.

Disposals reduced revenue by 2.7 per cent, primarily due to the disposal of the Brazil business in the first quarter. Total revenue from continuing operations increased by 11 per cent to €835.3 million in the period.


Food service witnessed the “greatest recovery” as the impact of Covid-19 waned and society reopened and normalised. Organic growth here was 30.7 per cent, while fast food achieved growth of 10.9 per cent and retail improved by 6.5 per cent.

Regionally, Europe performed “very strongly”, achieving an organic growth of 14.3 per cent as restrictions eased across many of Aryzta’s markets.

The rest of the world delivered a “resilient” organic growth of 7.7 per cent after it was impacted negatively by longer Covid-19 restrictions in Australia and New Zealand.

The performance reflected “stronger customer engagement” across all markets and channels and the “success of the simplified structure and agile decision making process”, the group said.

“Product innovation and renovation also increased as customers looked for more customised products,” it continued. “This helped deepen customer engagement leading to beneficial mix changes.

Underlying earnings before interest, taxes, depreciation, and amortisation (Ebitda) in the period increased to €104 million, reflecting growth of 36.7 per cent and underlying Ebitda margin acceleration of 240 basis points to 12.5 per cent.

These improvements “reflect the combination of an acceleration of organic growth, business simplification, cost reductions and disciplined costs management as well as good gross margin protection”.

The company’s operating free cash flow amounted to €11 million, representing a reduction of €16.5 million in the cash flow of continuing operations versus the prior period.

The main driver of this was an investment in working capital to support growth and the resilience of its supply chain. It was also impacted by one-off effects including calendar timing, temporary Covid restrictions and the disposal in Brazil.

Capital expenditure increased by €5.7 million to support additional growth driving investments. These effects were partially offset by higher Ebitda and reduced non-recurring expenses.

Total restructuring costs for continuing operations were €3.9 million, a “significant decline” from the €39.7 million incurred the previous year.

Its net debt increased to €299.6 million due to the €182.9 million of hybrid dividend payments net of the disposal proceeds received mainly for Brazil of €110.9 million.

Aryzta warned that inflation across all input costs from labour, raw materials, logistics and particularly energy “continue their upward trend”, with prices and availability of these key inputs remaining very volatile.

“The expectation is for further significant price effect in the second half to deal with the upward inflation trends across all inputs,” it added.

The expectation for full year 2022 is for organic revenue growth in a range of 12 per cent to 14 per cent, while the group reiterated the underlying Ebitda margin guidance.

Aryzta chairman and interim chief executive Urs Jordi said: "Organic growth accelerated due to strong volume growth and further positive pricing to support a double digit revenue growth performance.

“Profitability also improved reflecting the benefits of our simplified structure, disciplined cost management and strong organic growth, despite supply chain volatility and significantly higher input costs.

“Management is focused on sustaining the improved business momentum as well as its financial performance to further build a sustainable organic growth driven business.”

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter