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Aryzta AG: Underlying Ebitda stabilized in FY-2019

Zurich / CH. (aag) Swiss-Irish Aryzta AG announced its financial results for the year ended 31 July (FY-2019). Project Renew is progressing well and delivered EUR 26 million savings in FY-2019, which equates to annualised run-rate savings of EUR 40 million, the company said in its statement.

FY-2019 Highlights

  • Key measures of Group profitability improved
  • Underlying Ebitda growth of +1.9 percent and margin growth of +30bps achieved
  • Project Renew realised EUR 26 million benefits, EUR 40 million run-rate savings achieved
  • Group organic revenue flat; total revenue declined (1.5) percent to EUR 3,383 million
  • In North America, underlying Ebitda stabilised and improved but revenue challenges remain
  • Early October binding offer to sell the majority of the interest in Picard received
  • Upon completion; Aryzta would realise 85 percent of the net proceeds of its non-core asset disposal objective
  • Net Debt: Ebitda ratio 1 of 2.43x with significant covenant headroom

FY-2019 Financial Summary

  • Group organic revenue flat; total revenue declined (1.5) percent to EUR 3,383 million
    • Europe organic revenue growth of +1.9 percent
    • North America organic revenue decline of (3.8) percent, after a difficult Q4
    • Rest of World organic revenue growth of +8.9 percent
  • Underlying Ebitda +1.9 percent to EUR 308 million
  • Underlying Ebitda margin of 9.1 percent, a +30 bps increase
  • Underlying net profit of EUR 74 million, increased by 50 percent
  • Operating free cash generation of EUR 144 million is 33 percent above prior year, while cash flow generated from activities reaches EUR 53 million
  • IFRS operating profit of EUR 5 million; IFRS operating loss of (EUR 423) million in FY 2018
  • IFRS loss for the year of (EUR 29) million; IFRS loss of (EUR 470) million in FY 2018
  • IFRS fully diluted loss per share reaches (8.3) cents versus (121.0) cents in prior year

Chief Executive’s Commentary

Chief Executive Officer Kevin Toland: «The steps we have taken in FY-2019, have established foundations on our path towards stability, performance and growth. This is reflected in the delivery of Group level underlying Ebitda stability. We are realistic about and resolved to address the clear revenue challenges presented by our North American business. We will see a further period of negative organic growth in H1 in the North American market with positive evolution expected in H2 as new contract volumes are realised. We expect to see an improved underlying Ebitda performance in the North American region in FY-2020. We expect further underlying Ebitda growth at a Group level for FY-2020 as the benefits of the second year of Project Renew are being realised.»

Project Renew

Project Renew is progressing well and delivered EUR 26 million savings in FY-2019, which equates to annualised run-rate savings of EUR 40 million. Savings in Europe amounted to EUR 11 million, primarily from headcount reductions, manufacturing efficiency including automation projects and supply chain optimisation. North America delivered EUR 15 million savings primarily from a significant management delayering, procurement and manufacturing efficiency gains in bakeries. We expect to see a step-up in manufacturing savings in FY-2020 as we expect a full year of savings impact from initiatives started in FY-2019 as well as from remaining projects in the automation programme which will start to benefit in FY-2020.

Guidance

Aryzta expects to see underlying Ebitda growth for FY-2020 as the benefits of the second year of Project Renew are being realised.

The tables «Group Revenue» and «Underlying Ebitda Evolution» are avaiable in the following PDF file:

20191008-ARYZTA-FY-2019
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