2023
Annual Report and Accounts
FINANCIAL HIGHLIGHTS (17-monthperiod)
Total Revenue
3,046
in € million
Revenue Europe
2,698
in € million
Revenue Rest of World
EBITDA Group
13.2%
of total revenues
EBITDA Europe
12.2%
of segment revenues
EBITDA Rest of World
348 20.2%
in € million | of segment revenues |
Profit for the period | Diluted EPS |
161 | 9.7 |
in € million | in € cent |
TABLE OF CONTENTS
PAGE | MANAGEMENT REPORT |
- Financial Highlights
- Letter to Shareholders
- Markets and Business Model
- Interview with Group Interim CEO and Group CFO
- Operating Report
- Investor Information
GOVERNANCE
- Corporate Governance Report
- Compensation Report
- Group Risk Statement
SUSTAINABILITY
94 Sustainability Report
GROUP
146 Group Consolidated Financial Statements
COMPANY
222 Company Financial Statements
APPENDIX
- Alternative Performance Measures
- Pro forma 12-month Statements
ARYZTA AG Annual Report 2023 | 3 |
MANAGEMENTREPORT
FINANCIAL HIGHLIGHTS 2023 (17-monthperiod)
ARYZTA AG is an international bakery company with a leadership position in convenience bakery. We offer a comprehensive range of products and services for in- store bakery solutions. ARYZTA has excellent capabilities in the baking industry, offering high quality and great tasting bread, rolls, buns, pastries, savoury and American bakery such as cookies.
Revenue
€3,046m
Bakeries
26
Countries
27
ARYZTA Group
Bakery production facilities |
QSR production facilites |
Food solutions businesses |
ARYZTA bakery & food |
solutions footprint |
11% | 29% | 19% | ||||
Other | Quick Service | |||||
Rest of World | Foodservice | Restaurants | ||||
Geography | Channel | |||||||||||||||
Revenue | Revenue | |||||||||||||||
€3,046m | €3,046m | |||||||||||||||
89% | 52% | |||||||||||||||
Europe | Retail | |||||||||||||||
43% | 20% | 47% | ||||||||||||||
Savoury & | Bread Rolls & | |||||||||||||||
Other | Other | Artisan Loaves | ||||||||||||||
Customer | Capability | |||||||||||||||
Revenue | Revenue | |||||||||||||||
€3,046m | €3,046m | |||||||||||||||
57% | 33% | |||||||||||||||
Top 20 Customers | Sweet Baked & Morning Goods |
ARYZTA AG Annual Report 2023 | 4 |
MANAGEMENTREPORT
FINANCIAL HIGHLIGHTS 2023
Revenue
in €m | |||||
3500 | |||||
3000 | |||||
2500 | |||||
2000 | |||||
1500 | |||||
1000 | 3,046 | 2,123 | 1,756 | 1,525 | 1,669 |
500 | |||||
0 | |||||
FY231 | JUL 23 | FY223 | FY213 | FY203 |
Organic growth
in %
25 | |||||
20 | |||||
15 | |||||
10 | 17.3 | 21.6 | 17.9 | ||
5 | |||||
0 | |||||
(5) | (6.4) | (11.4) | |||
(10) | |||||
(15) | |||||
FY232 | JUL 23 | FY223 | FY213 | FY203 |
EBITDA
in €m | |||||
400 | |||||
320 | |||||
240 | |||||
160 | 400.8 | 271.3 | |||
80 | 171.9 | 115.0 | 47.6 | ||
0 | |||||
FY231 | JUL 23 | FY223 | FY213 | FY203 |
EBITDA margin
in %
15
10 | ||||
13.2 | 12.8 | |||
5 | 9.8 | |||
7.5 | ||||
0 | 2.9 | |||
FY231 | JUL 23 | FY223 | FY213 | FY203 |
- 17-monthperiod ended 31 December 2023
- Represents the organic revenue growth comparing the 17-month financial period ended December 2023 to the 17-month prior period ended December 2022
- Represents results of Continuing operations Europe and Rest of World segments
ARYZTA AG Annual Report 2023 | 5 |
MANAGEMENTREPORT
LETTER TO SHAREHOLDERS
Dear Shareholder,
On behalf of the Board of Directors of ARYZTA AG, I wish to express our thanks and appreciation for your continuing support and positive feedback. Our journey to create shareholder and stakeholder value via organic growth and business performance improvements continues to display strong results.
I am happy to report that we have made significant progress in our turnaround plan and have made substantial progress towards our mid-term targets over the last
17 months. As we are aligning our financial reporting year to the calendar year in future, we are presenting in this annual report details for the 17-month period from August 2022 to December 2023, along with a pro forma comparison of the calendar years 2022 and 2023.
Broad-based financial performance acceleration supported by organic growth
ARYZTA's performance continued to improve despite a challenging business environment, highlighted by input price volatility, significant labour inflation, supply chain disruptions, consumer spending under pressure from cost inflation, tough customer pricing discussions and an increasing interest rate environment. At the same time, we successfully introduced new innovative products with innovation accounting for c. 14% of revenue for the 17-month period, up from 6% in the prior period ended July 2022.
In total, our revenue in the 17-month period until the end of December 2023 increased to €3,046.0m. ARYZTA Europe reported revenues of €2,697.8m, with strong performance led by Germany, France and Poland, while ARYZTA Rest of World achieved revenues of €348.2m.
On Group level, we achieved a strong organic growth of 17.3%1 in the 17-month period, with volume remaining positive despite the significant necessary pricing.
We achieved an EBITDA for the 17-month period
of €400.8m, representing an EBITDA margin of 13.2%. Profit for the period increased significantly to €160.5m.
Balance sheet further strengthened
This strong performance led to a substantial improvement of cash generation with free cash flow reaching €139.6m, allowing us to continue to reduce our hybrid bond levels. In addition to the €200.0m repayment of the Euro hybrid in March 2023, we repurchased a further CHF 120.3m from the remaining two Swiss hybrid bonds in the last 5 months of our extended financial year, resulting in an annualized gross interest costs saving of c. CHF 8.5m.
Our improved performance also requires further investment in growth. We are investing c. €40.0m to build a new bakery in Western Australia to support both our customers' expansion plans and our organic growth. This new facility will be largely powered by renewable electricity, creating 80 direct and 500 indirect jobs, and will produce 220 million buns per annum when fully operational.
Our goal remains to optimise the capital structure over time by using our strong cash generation to further reduce debt. We improved our total net debt (incl. hybrids and leases) leverage ratio, which declined to 3.3x EBITDA2 for the period ended 31 December 2023 compared to 3.7x at the end of July 2023.
- Represents the organic growth comparing the 17-month financial period ended December 2023 to the 17-month prior period ended December 2022.
- Based on EBITDA for the 12-month period ended 31 December 2023
ARYZTA AG Annual Report 2023 | 6 |
MANAGEMENTREPORT
LETTER TO SHAREHOLDERS
Urs Jordi
Chairman, Board of Directors
ARYZTA AG Annual Report 2023 | 7 |
MANAGEMENTREPORT
LETTER TO SHAREHOLDERS
Sustainability report
ARYZTA continues to progress its ESG agenda. This annual report includes a detailed sustainability update including the commitment to the Science Based Targets Initiative (SBTi). Our ESG strategy is focused around three pillars, namely environmental efficiency, inspiring innovation and our people and communities, which supports the execution of our strategic value creation framework. For these three pillars we have defined 13 goals to address our greenhouse gas emissions and water usage reductions targets, to ensure we source sustainable ingredients, to support our people and communities and to ensure we produce healthy and nutritious bakery products for our customers and consumers.
Board and new CEO appointments
The Board of Directors appointed Heiner Kamps as the new Lead Independent Director. The Board composition proposals will be communicated to shareholders in the upcoming AGM invitation.
In relation to the dual role of Group Interim CEO and Chairman of ARYZTA, we are committed to separating the two roles by the end of 2024 at which point the business will be sufficiently de-risked and the turnaround advanced. With these objectives on track, the ARYZTA AG Board will be in a position to appoint the new permanent CEO designate later this year.
Outlook
With the post COVID recovery boost no longer a factor and a reducing price effect, we expect full year 2024 growth rates to normalize. Our growth will remain organic focused and innovation led while our margin progression will be supported by efficiencies and costs optimisation.
We expect 2024 quarterly growth trends to vary as was the case in 2023. ln light of Q1 2024 organic growth trending at a lower run rate, reflecting temporary softness especially in QSR, we expect organic growth to be in the low to mid- single digit range for the full year.
The combination of market growth and innovation supports higher growth opportunities in the bake-off segment. The competitiveness of bake-off improves as rising costs for labour, rents or food burden consumers and thereby underpins continuing growth of bake-off products. These factors all support the prospects of further financial performance improvement. We also expect to stay firmly focused on delivering further sequential improvement in free cash flow and return on invested capital to support our strategy to deleverage our balance sheet.
We look forward to reporting further progress in the current year, delivering on our commitment to create a stronger
ARYZTA.
Urs Jordi
Chairman, Board of Directors
1 March 2024
ARYZTA AG Annual Report 2023 | 8 |
MARKETS AND BUSINESS MODEL
MANAGEMENTREPORT
MARKETS AND BUSINESS MODEL
Bake-off market leader
ARYZTA is an international bakery company with a leadership position in convenience bakery and offers a comprehensive range of products and services for in-store bakery solutions.
ARYZTA is focused on the bake-off segment of the bakery market. Bake-off is the premium segment of the total bakery market and accounts for c. 25% of the total market. Products are manufactured and semi-finished frozen and are baked-off or thawed at the point of sale. As such, these products are sold ultra fresh throughout the day and are available 24/7.
ARYZTA services three channels Retail, Quick Service Restaurants ('QSR') and Other Foodservice. These three channels have different functionalities and pricing models. Other Foodservice offers a large assortment of quality bakery products that are delivered directly to customers. The Retail channel supplies large grocery and wholesale with bake-off products manufactured in our own bakeries. And in the QSR channel, the production and ARYZTA bakeries are integrated into the value chain of globally or regionally active Quick Service Restaurants.
ARYZTA's bake-off product portfolio covers three key categories of Bread Rolls & Artisan Loaves, Sweet Baked
- Morning Goods, and Savoury & Other. The portfolio focuses on convenience with a range of semi-finished as well as thaw and serve assortments. Its product ranges are focused on the key consumer trends of freshness, health, artisan and ethical, while leveraging the competitive advan- tages of optimising the value chain of the customers.
ARYZTA | ARYZTA | ARYZTA | ||||||
Other | Retail | Quick Service | ||||||
Foodservice | Restaurants | |||||||
Channel focus | - | Foodservice | - | Large Grocery | - QSR | |||
- | Convenience | - | Wholesale | |||||
- | Grocery independent | |||||||
- | Bakeries independent |
Customer/ Product Base
Business model
- | Large number | - | Few and large | - | Global and regional | ||
of products and | customers | QSR chains dedicated | |||||
customers | - | Customised SKUs | products | ||||
- | Bought-in finished | - | Produced by our | - | Produced by our | ||
goods from external | bakeries | bakeries | |||||
and ARYZTA bakeries | |||||||
- | Service and | - | Production and | - | Integrated production | ||
distribution model | logistics model | model | |||||
- | Direct Store delivery | - | Central warehouse | - | Pick up from factory | ||
- | Number of sales | delivery | - | Number of | |||
organisations: 7 | - | Number of | bakeries: 13 | ||||
bakeries: 13 |
ARYZTA AG Annual Report 2023 | 10 |
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Aryzta AG published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2024 06:48:01 UTC.