Swiss-Irish bakery group Aryzta's revenue increased by 1.5% during the 2016 financial year to a total of €3.9 million, the company’s full year results for 2016 show.
Pre-tax profits dropped to €365.5 million in 2016 from €398.6 million in 2015.
Joint ventures performed well contributing €15.7 million, net of interest and tax.
Commenting on the results, ARYZTA AG Chief Executive Officer Owen Killian said: "Underlying revenue growth has been subdued by the impact of contract renewals in North America during the 2016 financial year."
Killian also said that the cumulative effect of those contract renewals, combined with the long anticipated volume loss in Switzerland, will also have a negative impact during the 2017 financial year.
According to the report, the company has generated €267 million in cash during the year, ahead of target, and it expected to generate a further €225-275 million in its current financial year.
"The attractive cash flow has provided an opportunity to retire relatively expensive long-term debt, which will reduce the cost of borrowing, as we enter a period of reducing debt. Lower interest costs will help maintain underlying fully diluted EPS at consensus levels in FY17," Killian remarked.
Aryzta commissioned €150 million of new capacity and retired its older, less efficient assets.
Killian concludes: "The strategy to invert capital allocation and focus on free cash generation has been successful, with €267m generated in the year, demonstrating the highly cash-generative potential of speciality food. Consumer demand for high-quality speciality food is increasing, whether out of home or through modern retail, focused on freshly baked and prepared food, offering convenience and choice. ARYZTA is strategically well-positioned to serve this increasing demand."
© 2016 - Checkout Magazine by Miyuki Nakano