Sunday 18 August 2019

Revenue falls at Cuisine de France group Aryzta

Kevin Toland, CEO of Aryzta. Photo: INM
Kevin Toland, CEO of Aryzta. Photo: INM
Ellie Donnelly

Ellie Donnelly

Embattled Swiss-Irish baked goods firm Aryzta has seen its revenue fall by 5.5pc year-on-year to €909.7m in the three months to 31 October.

In Europe, despite the expected reduction from Swiss in-sourcing, the company, who's brands include Cuisine de France, experienced organic growth of 0.6pc, which was then offset by negative currency headwinds of 0.9pc, according to the group’s revenue update.

The growth in Europe was driven by an improved price mix.

However in North America, Aryzta saw its organic revenue decline by 7pc in the three month period, driven entirely by its Cloverhill business, which Aryzta acquired in 2014.

Problems at the Cloverhill facility include volume losses arising from the misstep into the business to consumer centre aisle, high labour turnover, and recruitment costs.

Currency had a further 4.5pc negative impact on revenues in the North American market.

There was some good news, with the company experiencing organic growth of 7.8pc in the rest of the world market, however this was offset by a negative currency impact of 5.3pc.

Excluding Cloverhill, group revenues grew by 1.3pc overall on an organic basis.

Commenting on the results, Aryzta CEO Kevin Toland said that the business challenges remained unchanged from those outlined in September, with Europe continuing to perform to expectation. However he said that progress at Cloverhill was proving "difficult".

"Management’s priority is to continue to identify issues and opportunities to address operating performance and to maximise available free cash flow," Mr Toland said.

Earlier this month the Irish Independent revealed that Aryzta, which has its roots in Irish agri group IAWS, has been slapped with a major lawsuit in the US that exposes the impact its manufacturing difficulties in America have had on customers.

Tennessee firm McKee Foods - which owns the high-profile Little Debbie brand in the US and has annual sales of about $1.5bn (€1.27bn) - claims that it will lose millions of dollars in profits because Aryzta couldn't fulfil its orders properly.

Meanwhile in October, the Sunday Independent revealed that Aryzta is facing continuing losses at its US Cloverhill facilities following an immigration crackdown which forced out 800 workers.

More than a third of its staff had to leave the US operation after a federal audit of a third party staffing agency found that hundreds of workers did not have the correct paperwork.

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