Bakery giant Aryzta has reported a 0.6% increase in organic revenue in its Europe division in the third quarter of its financial year, as the business' post-COVID turnaround continues.
Europe volumes were down 0.3%, with price/mix up 0.9% in the period.
'Europe continued to be impacted by COVID-19 restrictions in the period,' the group said in a statement. 'However we have seen improvement across the majority of our markets, and the roll out of vaccinations and the re-opening of economies will support bakery consumption, which has been significantly impacted by the restrictions to date.'
The group reported a 14.1% organic revenue increase in its Rest of World operations and a 2.6% increase in continuing operations in the quarter, it said.
Total organic group sales were up 6.2% in the quarter on a constant currency basis, as the period lapped the start of the COVID-19 crisis last year, a period that saw the business hit hard.
“The swift conclusion of the Aryzta North America disposal in the period and a resumption of organic growth underscores the progress being achieved in a short time," commented Aryzta chair and interim chief executive, Urs Jordi.
"While Q3 revenue development was positive in terms of volume and price/mix for continuing operations across the majority of our markets, some have yet to turn positive and work is actively ongoing to accelerate this. The need for pricing to recover widespread inflation factors in new tenders and contracts is being addressed through active customer communication and proactive professional procurement pricing.”
The group said that it is not providing guidance for the remainder of the year, 'given ongoing challenges and uncertainty surrounding COVID-19' and reopening plans in the markets in which it operates. It will report full-year 2021 results on 4 October.
Commenting on its performance, analysts Cathal Kenny and Roland French of Davy wrote, "Aryzta’s Q3 revenue performance was modestly behind our forecasts, with revenue from continuing operations +2.6% year-on-year (Davy: +4.6%). While performance was impacted by mobility restrictions through the period, we anticipate an improving trendline through Q4 as key European markets re-open.
"Widespread inflation is a key call-out from the release and will put pressure on price recovery over the coming quarters. The absence of full-year EBITDA guidance may weigh on the equity."