Aryzta AG: announces FY-2023 financial results

Zurich / CH. (aag) Swiss-based Aryzta AG published its results for the Financial Year 2023. Profitability continues to improve, the company said in its Ad Hoc statement. Organic growth increased from 17.9 percent to 21.6 percent, mainly driven by strong pricing of 18.2 percent and resilient volume growth of 3.5 percent supported by solid market momentum for bake-off products. In total, revenue reached EUR 2,123.2 million, up by 20.9 percent compared to the previous period (FY-2022: EUR 1,756.1 million). Aryzta Europe accounted for 88 percent of Group revenue and Rest of the World had a share of 12 percent.

Chairman’s and interim CEO’s summary

Urs Jordi, Chairman and interim CEO: «Our strong organic growth performance of 21.6 percent underpinned the delivery of a much improved profit of EUR 112 million. This was achieved in a period of challenging trading, with persistent inflation, cost of living increases, supply chain and energy costs concerns. Volume growth was supported with a doubling of the share of innovation to 11 percent of revenue. This ensures our products remain aligned with customers’ needs and consumer trends. Our strategy remains focused on organic growth, operating efficiencies and strict cost discipline. This will generate free cash flow to deleverage total net debt below 3x by 2025. We remain on track to deliver further improvements across all key metrics in line with our guidance for the remainder of 2023 and reiterate our mid-term 2025 targets. Achievement of total net debt leverage of less than 3x will open up attractive refinancing options.»

Positive profitability improvement achieved

Gross margin decreased to 31.1 percent due to significant inflation and input headwinds and is still below pre Covid levels (input costs are at index 150 compared to 2020). Ebitda amounted to EUR 271.3 million, increasing the Ebitda margin to 12.8 percent. This positive development was possible because of operational efficiency, strict cost discipline and correct pricing. Profit for the period increased substantially and amounted to EUR 112.0 million compared to EUR 0.9 million during the prior period. This improvement is driven by strong organic growth and cost controls, as well as the effect of the EUR 42.0 million prior period loss on disposal of the Brazil business.

Outlook

Further improvements in all key metrics are expected in 2023 with mid to high teen organic growth driven by volume and price. Ebitda margin expansion is expected to remain supported by growth, efficiencies and cost discipline. The Group continues to generate free cash flow and the focus remains on improving ROIC. The 2025 midterm targets remain valid.