Aryzta: First Quarter 2015 Trading Update

Zurich / CH. (aag) Swiss Aryzta AG announced its trading update for the first quarter 2015, ended 31 October 2014. Commenting on the results, Aryzta AG Chief Executive Officer Owen Killian said: «Food Group revenue increased by 17.8 percent in the period, with a modest increase in underlying revenue supported by a strong increase in revenue from acquired businesses. We anticipate an increased momentum in underlying revenue through the second half. Our focus is to deliver value for our customers, while unlocking the benefits of our newly created business platform. With our increasing market relevance, we have confidence in our unchanged medium-term guidance of seven to twelve percent growth in underlying, fully diluted EPS».

Food Group

Food Europe revenue grew by 7.0 percent in the first quarter to 404.1 million EUR. Underlying revenue growth was up 3.1 percent and there was a contribution of 2.7 percent from acquisitions. Currency had a positive 1.2 percent impact. The trends in Europe remain positive, reflecting improving stability in Aryzta Food Solutions and strong growth within large retail. The underlying Q1/2015 European revenue growth also benefited from the transfer of production volumes previously produced in North America.

Food North America revenue increased by 30.5 percent in the first quarter to 475.5 million EUR. Underlying revenue growth declined by (3.2) percent, while there was a very strong contribution from acquisitions of 31.2 percent. Currency had a positive 2.5 percent impact. The trends in North America reflect the impact of the SKU rationalisation process, which is aimed at freeing up capacity for larger customers and optimising medium-term margin delivery. Approximately 40 percent of the decline in underlying revenues relates to changes in the North American fundraising distribution model and transfer of certain volumes previously produced in North America and shipped internationally to now be produced directly within those regions. While the transfer of production volumes will impact sequential quarterly underlying revenue growth in FY-2015, the pipeline of new customer revenue is expected to offset those impacts by financial year end.

Food Rest of World revenue increased by 6.9 percent in the first quarter to 58.2 million EUR, as a strong underlying growth performance of 6.1 percent was supported by a positive currency movement of 0.8 percent. The trends in Food Rest of World are consistent with previous quarters.

Origin Enterprises

Origin Enterprises PLC, Aryzta´s subsidiary and separately listed company, has separate funding structures, which are financed without recourse to Aryzta. At 31 July 2014, Origin´s net debt amounted to 11.9 million EUR equivalent to a net debt: Ebitda ratio of 0.14 times. Origin released its first quarter trading update on 24 November 2014. Details are available at originenterprises.com.

Outlook

Guidance is unchanged from September.

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