A “notably better” economy in North America contributed to improved year-over-year earnings and revenues within the Food North America division at Aryzta A.G. in the first half of fiscal 2013. EBITA in the six months ended Jan. 31 rose 7% to €90,738,000 ($117,917,000), up from €84,955,000 in the same period a year ago.
Revenue for the Food North America unit rose 11% to €740.5 million ($962.3 million), with underlying revenue growth of 2.2% and additional contributions from acquisitions of 2.7%.
“The underlying revenue growth in North America was almost entirely due to change in product mix and increased volumes,” the company said. “This reflects the continued progress on deepening customer relationships and leveraging the broader range of Aryzta food offerings within the region. The performance also benefited from somewhat stronger consumer spending trends in North America compared to Europe.”
Aryzta also said it completed two small acquisitions in the Food North America segment during the period, adding complementary bakery capability and de-risking expansion.
“During the period Food North America also discontinued its direct-store delivery business, resulting in the closure of 50 distribution centers and 224 truck routes,” the company said. “Additionally, the group disposed of its 50% interest in a joint venture previously held as part of the Food North America segment.”
In a March 11 conference call with analysts, Owen Killian, chief executive officer, said Aryzta plans to concentrate on progress in North America and Europe, which combine for more than 90% of the company’s business.
“In relation to repositioning in North America, our customer-centric strategy is progressing well with cross functional teams already in place,” Mr. Killian said. “Formerly what would have been 10 separate businesses are now operating as one with a single-instance E.R.P. We’ve had excellent management engagement in these customer-centric teams. We have made some new acquisitions and these provide a greater bakery selection and these are already fully integrated into our E.R.P. system as we speak.
“We’ve exited our direct-store distribution business, and this facilitates a greater regional penetration through third-party distribution. We’ve got a substantial innovation pipeline introduced to our customers, and the organizational focus is firmly now on the customer and growth across food categories.
“The fiscal 2014 focus is now on the bakery investment and optimizing our network. And the financial targets that we’ve announced for 2015, they look achievable in relation to the business in North America.”
EBITA within Food Europe totaled €77,611,000 ($100,868,000), up 5% from €74,164,000 in the same period a year ago. Revenues for the group rose 2% to €641.6 million ($833.8 million).
“Macro-economic conditions remained challenging across the region throughout the period, with continued fragile consumer spending, due to increased government taxation and employment concerns,” Aryzta said. “Investment in upgrading facilities continued throughout the period, and the new bakery in Poland is expected to begin production during the second half of the current financial year. This will help satisfy increased demand from Q.S.R. customers in the region. Additional capital investment in the roll-out of the Food Group single-instance E.R.P. platform also contributed to progress to plan during the period.”
Total Food Group EBITA rose 4% to €186,311,000 ($242,164,000) during the first six months, up from €178,832,000, while Total Food Group revenue increased 8% to €2,068 million ($2,687 million).
