Profits at Aryzta fell by 15.5 per cent to €49.1 million in the first half of the year as more cost-conscious consumers and upward inflationary pressures tightened margins for the Swiss-Irish maker of par-baked pastries and breads.
The group, which owns the Cuisine de France brand here and supplies the likes of McDonald’s and Subway, described its performance as “resilient”.
Earnings before interest, tax, depreciation and amortisation (Ebitda) increased by 0.5 per cent to €150.5 million, while Ebitda margin fall by 0.3 of a percentage point to 13.9 per cent.
“The decline in margin reflects the challenging market environment as well as the impact from delays in the finalisation of some tender agreements in the period,” the group told investors.
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“This is the result of the challenges faced from the significant price volatility in some key raw materials such as butter, eggs and cocoa, as well as increased labour costs across our geographies.”
Aryzta said its focus remains on delivering continued business performance and efficiency improvements. The group is targeting cost reductions in the range of €40 million-€60 million from operations, procurement and structural cost initiatives between now and 2028.
The plan also involves incremental ramp-up costs of €20 million-€30 million for the further roll-out of the IT infrastructure to secure the gross cost savings, resulting in a net projected saving of €20-€30 million. Innovation accounted for about 18 per cent of revenue in the first half.
Aryzta chief executive Michael Schai said the company delivered a “solid” first half performance in a “challenging market environment” marked by subdued consumer sentiment.
“We achieved organic growth of 2.8 per cent, underpinned by a healthy 2.1 per cent volume growth, which resulted in further market share gains,” he said.
“We remain committed to driving performance through a focus on organic growth, innovation, process automation and strict cost discipline.
“We continue to target our 2025 full-year guidance for low to mid-single digit organic growth and improved performance across key financial metrics.”
Solid organic growth helped generate revenue of €1.1 billion, which was up 3 per cent on the year before, with organic growth of 2.8 per cent.
Total net debt, including hybrid funding, declined to €886 million compared to €927 million at June 2024 and €894 million at December 2024. The company generated free cash flow of €29.4 million, which was below the year ago period to June 2024.
The group’s performance in Europe was described as “solid” in most markets with good support from positive volume and pricing. Ebitda in the region reached €127.4 million, representing a margin of 13.2 per cent, down 0.4 of a percentage point on the year before.
Activity in the rest of world significantly improved over the period, achieving Ebitda of €23.1 million, corresponding to a margin of 19.6 per cent, which was 0.9 points higher than a year earlier.
