SHARES IN baked goods company Aryzta, which owns Cuisine de France, rose by 2.66 per cent in Dublin yesterday as the Zurich-based group announced strong growth in its earnings.
Aryzta’s group revenues rose by 28.8 per cent to €3.88 billion while its earnings before interest, tax and amortisation (Ebita) rose by 44.1 per cent to €393.3 million for the year to the end of July 2011.
Its underlying fully diluted earnings per share grew by 27.1 per cent to 310.1 cent.
Revenues at its core food group rose by 53.5 per cent to €2.58 billion while its Ebita rose by 55.6 per cent to €322.3 million.
The strong increases were due primarily to two major acquisitions in North America last year, which cost more than $1 billion.
These deals helped Aryzta to double its bakery volumes.
An increase in sales to non-European and North American markets was the main driver of growth, it said.
Underlying growth in its food group was 2.7 per cent, as consumer confidence improved.
However, the company said that it remains “a tough economic environment for consumers who now also are dealing with higher food costs with less disposable income”.
The food group’s net debt reduced by 10.2 per cent to €955.5 million. Its net debt to Ebitda ration ratio is now 2.24 times. Aryzta said it had committed €100 million to a number of bolt-on acquisitions in Asia and Britain. It expects to close the acquisition of two bakeries in Taiwan and Singapore in the first quarter of 2012 – deals that were announced in August 2010.
It has also closed the acquisition of a UK manufacturer of flat breads which primarily services the retail channel.
“These acquisitions are aligned with the food group’s strategy to diversify geographies, channels and products,” the company said.
“These acquisitions are expected to add approximately €78 million in revenue in full year 2012 and to be modestly earnings accretive.”
Aryzta also plans to build a new bakery in Malaysia instead of proceeding with a previously announced plan to acquire there.
The company, which was formed following the merger of Irish food group IAWS and Swiss group Hiestand, reiterated its earnings goal for 2013.
“At this early stage of the year, we believe full-year 2012 consensus earnings per share appears reasonable and our stated earnings goals for 2013 are still attainable,” it said.
The forecast consensus EPS for the current financial year is €3.38.
Last week Origin Enterprises, in which Aryzta has a 71 per cent shareholding, posted a 40 per cent rise in pre-tax profits to €62.5 million.
Aryzta’s shares closed in Dublin up 85 cent at €32.80.
Aryzta: facts and figures
Group Revenues:€3.88bn (+28.8%)
Group Ebita:€393.3m (+44.1%)
Underlying EPS:310.1 cent (+27.1%)
DAVY, A company broker to Aryzta, described the results as an “excellent performance” in the context of the challenges facing the wider sector given declining disposable incomes among consumers.
Aryzta’s headline results were flattered by two large acquisitions in North America but it did achieve underlying revenue growth of 2.7 per cent in its food group.
The company has signalled that it will continue to acquire assets, albeit on a more modest scale, and is confident of hitting its forecast earnings targets for this year.
