Aryzta to consider return to dividends from 2025, chairman says

Aryzta’s chairman and interim chief executive, Urs Jordi, said the Swiss-Irish baked goods group will start to think about returning to paying dividends “from 2025 onwards”, as long as its reaches debt-reduction targets following a tumultuous recent history.

Speaking in an interview with The Irish Times, Mr Jordi added that while the company’s focus remained on organic growth and cutting borrowings, it would also look at bolt-on deals that are likely to emerge from a period of consolidation in the industry in Europe in the coming years.

Mr Jordi has overseen a sharp reduction in Aryzta’s net debt to an estimated figure of just over €1 billion, according to analysts, from €1.89 billion in mid-2020, just before he took over the then-troubled company.

This has been driven by the proceeds of asset sales and cash generation, resulting in its net debt falling from 7.3 times earnings to an estimated 3.8 times. Aryzta has a target of cutting the ratio further to three times earnings in 2025.

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“From 2025 onwards we’ll start to think about dividends,” said Mr Jordi, adding that the company would need to eliminate by then most, if not all, of its legacy so-called hybrid debt-equity instruments, which have no maturity date but where interest payments had been accumulating for years.

Aryzta has bought back €250 million of its hybrid notes since last summer, leaving 590 million Swiss francs of such debt outstanding.

Irish investors, including a number of co-ops and farmers, are estimated to account for less than 10 per cent of all shareholders.

Mr Jordi said Aryzta’s Cuisine de France in the Republic remained “a golden asset” that was going through something of a “revival”, following recent investments in sourdough and specialty breads, like its ancient grain bloomer and cheese and jalapeno loaf, that sit alongside its original Parisian baguettes.

The company, which was formed in 2008 through the merger of Dublin-based IAWS and Swiss baking group Hiestand, saw its centre of gravity move from Dublin to Zurich in late 2020 when Mr Jordi was appointed as chairman as part of a boardroom coup, following years of weak performance following a series of debt-fuelled deals.

The company’s turnaround since then leaves it poised to post a net profit of about €65 million for the 12 months to the end of July, according to the consensus call among analysts. That would mark a second straight positive result, following a total of €2.73 billion of losses racked up over the previous five years.