Troubled Swiss-Irish bakery group Aryzta has seen its group revenue decline 16.8pc to €811.4m in the three months to 30 April.
The decline was mainly due to a drop in revenue from disposals, accounting for 8.9pc of the decline, and currency fluctuation, which accounted for 6.7pc of the decline, the company said in a trading update today.
In addition, the company said that its third quarter earnings before interest, taxation, depreciation, and amortisation (EBITDA) margins are “below management expectations.”
However Aryzta has today announced a three year €200m restructuring and cost reduction plan aimed at restoring financial flexibility and aligning the company’s assets and cost base with “current and expected business conditions.”
Commenting on the update Aryzta chief executive Kevin Toland said that the company has identified and is addressing the challenges facing the historical business model, and the industry generally, and will stay focused on its core, the frozen business to business bakery model.
“The group has sold selected loss-making assets, rationalised headcount, and under new management put in place a series of efficiency and cost reduction activities to accelerate performance improvement,” Mr Toland said.
Mr Toland joined Aryzta, whose brands include Cuisine de France, last September from the DAA, the operator of Dublin and Cork airports.
In respect of disposals, the company said that the disposal programme is “on track” with over €140m released to-date.
Meanwhile dividends from the company’s Picard arm are “strengthening” the balance sheet.
In Europe the group’s revenue declined by 6.4pc during the third quarter to €409m, while in North America revenue declined a massive 28.2pc to €340.4m, with disposals and currency fluctuations driving the North American decline in revenue.
“The North American business faces continued challenges from sustained high labour and distribution costs, which are not yet recovered by pricing initiatives,” the company said.
By Ellie Donnelly
Source: Irish Independent
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