Aryzta Cuts Earnings Forecast, Blaming Brexit Challenges
Swiss-Irish bakery giant Aryzta has revised its earnings forecast for the 2018 financial year, stating that EBITDA is likely to be 15% lower than previously estimated.
The company noted that although revenue, excluding its Cloverhill business in the US, is relatively stable, EBITDA weakened towards the end of its second quarter in both Europe and the US, and the trend is not expected to reverse in the remainder of the full year.
The group said that European underperformance is estimated to account for around 20% of the anticipated shortfall relative to expectations, due to the impact of Brexit-related pressures on its UK business.
EBITDA performance in the US is also continuing to underperform, driven by double digit inflation in distribution costs, and higher than expected labour costs.
In November, Aryzta reported a 5.5% decline in revenues in the first quarter, with revenue totalling €909.7 million.
Aryzta has made a number of significant leadership changes in recent months to shake-up the business.
Last week, the bakery company named its new chief strategy officer, and appointed a new CEO for its North America unit.
This follows the appointment of Frederic Pflanz as CFO earlier this month, and new CEO Kevin Toland, who began his role last September.
“While acknowledging the major challenges, revenue remains resilient," said Toland.
"The newly strengthened management team is now in place and fully focused on addressing those challenges. We are progressing the disposal of non-core assets and deleveraging programme which is a key component of our multi-year turnaround programme and delivery of the €1 billion cash generation target.”
Aryzta is set to announce its half-year results on 12 March 2018.
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Sarah Harford. Click subscribe to sign up to ESM: The European Supermarket Magazine