ZURICH, SWITZERLAND — In what has been a year of significant change that has included the placement of new leadership and a refocus on core strengths in the B2B frozen bakery and European food solutions, Aryzta AG sustained sharp declines in its North American operations.
In the year ended July 31, Aryzta North America EBITDA plummeted 43% to €170,096 ($202,057), which compared with €300,132,000 in fiscal 2016. EBITDA margins declined 620 basis points to 9.5% from 15.7%.
“These very significant declines are the result of negative operating leverage following an overall reduction in volume and are further impacted by increased labor input costs and additional brand marketing investment behind the business-to-consumer (B2C) center aisle food offering, which has not been successful and has now been stopped,” Aryzta said.
Aryzta North America revenues in fiscal 2017 decreased 5.7% to €1,799.1 million ($2,136.9 million) from €1,908.1 million.
Aryzta said the decline in revenues initially was driven by declines with contract renewal customers and was further compounded by co-pack customers in-sourcing volumes earlier than anticipated.
Overall, EBITDA at Aryzta decreased 31% in fiscal 2017 to €420,307,000 ($499,226,000) from €609,640,000, while underlying net profit fell 42.5% to €179,026,000 from €311,542,000. Revenues fell 2.1% to €3,796,770,000 from €3,878,871,000.
