Swiss-Irish baker Aryzta said organic revenue declined 2.5 per cent in the first half of its financial year, with its North American business continuing to lag.
The company, which makes burger buns for McDonald's and owns the Cuisine de France brand, said total revenue fell 3.2 per cent to €1.66 billion in the six months to January 31st.
North American organic revenue fell 5.3 per cent to €704 million, the group said. Although European revenue was down 2 per cent to €807.3 million, Aryzta said this was on track, with the rest of the world showing an 8.6 per cent increase to more than €144 million.
Underlying earnings before interest, taxation, depreciation and amortisation (Ebidta) were €169.8 million, a 12 per cent rise. However, on a like-for-like basis, that figure represented a loss of 6.3 per cent.
Aryzta generated an underlying net profit of €34.4 million, with operating free cash generation of €55.7 million over the six months. Cash-flow generated from activities was €23.2 million.
"Europe has delivered ebitda and margin growth consistent with its focus on profitable volume and increased operating efficiency. North America, while reporting sequentially improved revenue, is behind in terms of its Ebitda outcome," said Aryzta chief executive Kevin Toland. "Factors impacting North America profitability are being addressed and we expect an improved performance in the second half of the year."
Cost cutting
Aryzta is in the middle of a three-year cost-cutting scheme to save €200 million, entitled Project Renew. The company said the cost-cutting project was gathering momentum, with cumulative savings of €57.4 million since launch, and it was on track to reach €70 million.
The group said it expected underlying earnings to improve when the full-year results were published, assuming there was no major impact from the current coronavirus outbreak.
“Aryzta continues to make strategic and financial progress with our portfolio refocus to a frozen B2B business now complete,” Mr Toland said. “We continue to expect to deliver underlying Ebitda growth for FY20, excluding effects of IFRS 16, as the overall business stabilises and the benefits of Project Renew are further realised.”
