Aryzta shrugs off market volatility as revenue soars
Revenue at food group jumps 53pc to €2.6bn as acquisitions kick in
Published 27/09/2011 | 05:00
Aryzta chief executive Owen Killian has said he doesn't believe that the resurgence in economic volatility in its key markets in the past number of weeks will have any significant impact on the food group's revenues.
Mr Killian was speaking after Aryzta -- which was created three years ago after IAWS made a major acquisition -- posted strong full-year results, with revenue at its core food group activities jumping 53pc to almost €2.6bn as the effects of two large acquisitions last year hit the top line.
Earnings before interest, tax and amortisation jumped 55.6pc to €322.2m.
Aryzta's food products, including bread rolls and pastries, are aimed squarely at the consumer market, with the group generating 46pc of its revenue from the division in Europe, 47pc from North America and 7pc from the rest of the world.
When the economic crisis first took off in 2008, the company was affected by revenue declines as consumers reacted to tougher conditions by tightening their spending.
But Mr Killian argued yesterday that most had already made adjustments to their spending habits and unemployment levels, while higher than previously, had not risen as much as expected.
"We have substantial financial market volatility and this impacts more than banks and stock markets," Mr Killian pointed out. "It has implications for consumers. The implications manifest themselves as weak consumer spending."
He added that economic growth was important for consumers and consumer behaviour was important for economic growth, but since 2008 consumers had been fragile, with less income and higher taxes.
"We cannot depend on GDP growth to increase our revenues, so our response is to leverage our key customer relationships to grow revenue," he said.
As part of that plan, Aryzta, which has 48 manufacturing sites around the world and 100 distribution centres, is spending €100m a year over the next three years to "unlock revenue and efficiency opportunities".
Mr Killian said the group's food service business had been more greatly affected than its retail food sales as more consumers sought to save money by eating at home.
However, he said that the group remained committed to its full-year earnings targets for the current financial year which ends next July, and added that earnings goals for 2013 were "still attainable".
Aryzta, which is based in Switzerland and formed after IAWS acquired Swiss baker Hiestand in 2008, also owns 71pc of agri-group Origin Enterprises.
It received an €8.5m dividend from Origin in the last financial year, up from €7.6m in the previous year.
Shares in the group closed up 2.3pc in Switzerland and 2.6pc in Dublin at €32.80.