Aryzta’s Third-Quarter Results – What The Analysts Said

By Steve Wynne-Jones
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Aryzta’s Third-Quarter Results – What The Analysts Said

Bakery firm Aryzta has posted what the company’s CEO, Kevin Toland, described as a “sequential improvement” in group organic revenue in its third quarter.

The group reported a 1.3% increase in revenue in the quarter, which, it reported, reflects the ‘ongoing stabilisation’ of the business.

Here’s how leading industry analysts viewed its performance.

Cathal Kenny, Davy

“Sequential organic growth improvement reflects contrasting trends across core markets – outperformance in Europe, which was price/mix led, was offset by weakening volumetric trends in North America.

“The latter dynamic is likely to persist for a couple of quarters. Project Renew remains on track and continues to anchor our organic EBITDA growth assumptions. We do not envisage any material change [to] our FY 2019 EBITDA forecast.”


Jason Molins, Goodbody

“The key highlights from the results statement are: (i) Europe reported 4.4% organic growth – vols +0.7% and pricing +3.7% – with Switzerland strong, France, Poland and Eastern Europe in line, which helped offset a challenging performance in [the] UK and Ireland; (ii) North America reported -3.8% organic revenue declines, with volumes down 4.9%, primarily driven by the retail and foodservice channels.

“Management notes that profitability has been stabilised in the region, and (iii) the Rest of World division achieved a strong out-turn, with 8.9% organic growth – GBY 5.0% – and management notes that, in the medium term, it will require additional investment due to capacity constraints.

“Overall, Aryzta achieved a solid out-turn in organic revenue growth in the period, with a sequential improvement delivered. The group is now targeting ‘low single-digit EBITDA growth’, compared to its previous guidance of ‘mid- to high single digit’. Consequently, we are likely to nudge down our FY19 EBITDA forecast by [approximately] 2%, noting our previous forecast of €312.8 million had represented [approximately] 5% underlying growth.”


“Aryzta issued a mixed Q319A trading statement marginally behind expectations. Management also clipped EBITDA guidance. In its H119A results, management reiterated previous guidance for mid- to high single-digit organic EBITDA growth. This has now been tempered to low single-digit underlying EBITDA growth for FY19.


“That said, the market only has 2.7% pencilled in – Bloomberg consensus – and so, while sentiment will be weak in the short term, there should be little adjustment to market numbers.”

© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.

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