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Bakery Firm Aryzta Sees 'Further Improvement', Despite Threat Of Second Wave

Bakery firm Aryzta has said that July saw 'further improvement' in revenue trends, with the business seeing revenue down 18% in the month to 25 July, however the firm added that it is wary of the threat of a second wave of coronavirus infections.

Its July performance compares to a 23% decline in revenue in June, a 36% decline in May and a 49% drop in April.

Emerging From Lockdown

It said that in Europe, while most economies are re-emerging from lockdown, there is 'concern about a second wave ' in some countries.

Monthly revenue in its Europe business is down by around 20%, with foodservice still 'significantly down', and QSR and retail showing signs of improvement.

In North America, meanwhile, it said that while sales are 'improving', many States and cities are still experiencing volatility, and the re-instatement of restrictions. Monthly revenue in the region is down by around 15%.

The business' Rest of World division has posted a revenue decline of around 20% for July, with foodservice negatively impacted like in other regions.

It said that the performance in its Brazil arm is 'improving but remains challenging', while concern over a second wave of infections is impacting recovery in Australia and Japan.

Production Capacity

In its statement, Aryzta re-iterated that it took 'decisive action' to protect and maximise liquidity in the wake of the first COVID-19 infections in March.

'This included pausing productions in bakeries to reduce capacity in line with demand, furloughing headcount, availing of government relief initiatives, suspending capital expenditure and eliminating discretionary cost to the maximum extent possible,' it said.

Further to this, it said that many production lines are still operating at reduced capacity, but it has been able to adjust production upward at some facilities.

In Europe, it said that just one bakery is still fully 'paused', compared to three as of 30 April, while 69 out of 83 lines are currently operational. The same is true in North America, where one bakery remains paused compared to five as of the end of April.

Some 14% of the company's staff remain on furlough at present, compared to close to a third back in April.

'Aryzta continues to actively manage production capacity to match demand as it improves over time,' it added. 'The company continues to expect a bumpy recovery over the coming months.'

Last week, the business announced that its group chief financial officer, Frederic Plflanz, is to step down from his role in December.

© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine

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