Embattled baked goods company Aryzta, which owns Cuisine de France, has lost a fourth top executive as the group faces into an unprecedented restructuring after issuing the latest in a string of profit warnings last month.
The managing director of Aryzta's European and Asia-Pacific bakeries operation, Frank Kleiner, has signalled he will leave the company by the end of July.
Earlier this week, Aryzta – formed out of the 2008 merger of Dublin-listed IAWS plc and Swiss-based Hiestand – said its chief executive Owen Killian, chief financial officer Patrick McEniff and head of the Americas division, John Yamin, had each tendered their resignation and would leave by July 31st.
While it is believed that Mr Kleiner is leaving for personal reasons, unrelated to the company’s woes, his departure leaves a further major gap to be filled. A spokesman for Aryzta declined to comment.
Sources said that US executive search giant Korn Ferry International is among firms in talks to be retained by Aryzta to find replacements for Mr Killian and the other senior executives.
Early speculation in industry circles on potential candidates for the CEO role has centred around names including Hilliard Lombard, Aryzta's former European boss, who left early last year to become managing director of the Irish business of Valeo Foods, owner of the Batchelors and Fruitfield brands.
Greencore chief executive Patrick Coveney is also being tipped as a potential candidate. However, market sources said the role is unlikely to appeal to Mr Coveney, especially as he has just completed the transformational $747.5 million (€702.2 million) acquisition of US company Peacock Foods in a deal that will quadruple Greencore sales in that market. Spokesmen for Mr Lombard and Mr Coveney declined to comment.
The leading potential internal candidate would appear to be Dermot Murphy, Aryzta's chief operating officer for Europe who, along with two other senior managers, was appointed to the group's executive team this week to support an orderly transition at the top, sources said.
"I think the new chief executive will have to be an external appointment, as there's nobody in the company with the level of experience needed to carry out the amount of restructuring that lies ahead," said Jean-Philippe Bertschy, an analyst with Vontobel, the Swiss private bank.
Aryzta's woes can be traced back to March 2015, when the stock was sold off after it posted weaker-than-expected results. Two weeks later, it announced the purchase of a 49 per cent stake in French frozen foods company Picard from London-based private equity firm Lion Capital. The €447 million deal was badly received by investors.
A subsequent series of profit warnings and disappointing earnings, largely as a result of problems in the US operations, has seen Aryzta’s market value plunge by 53.5 per cent over the past two years to 2.93 billion Swiss francs (€2.75 billion).
Fintan Ryan, a London-based analyst with German investment bank Berenberg, says Aryzta may sell the licence for brands in the US while retaining the contract to produce baked goods for the new owners. Aryzta's recent troubles stem from its US subsidiary Otis Spunkmeyer pushing its cookies and cakes onto retail shelves in direct competition with brands that had outsourced baking to the company. Many of these customers have pulled contracts as a result.
While Mr Killian last month ruled out need for of Aryzta to raise equity as it goes about refinancing €600 million of debt within the next year, Mr Ryan said “the question of whether the company will raise capital is definitely on the table”.
“I don’t think there is an acute need,” said Mr Ryan. “But ultimately this will come down to the new management team.”