Aryzta’s Cloverhill business in North America continues to drag the performance of the wider group. The speciality bakery company best known or its Cuisine De France brand released first quarter results on Monday for its 2018 financial year which show sales fell 5.5% year on year to just under €910m.
Aryzta’s business in North America continues to struggle as sales declined 11.5% to €410m
Of this drop in sales, Aryzta said 2.9% was currency related, while organic sales contracted 2.6% - all of which was entirely a result of the weak performance in its Cloverhill business in the US. Excluding Cloverhill, Aryzta said organic sales across the business increased 1.3%.
Newly appointed chief executive for Aryzta Kevin Toland said the challenges facing the business are unchanged since September when he first took charge.
“Progress at Cloverhill in North America is proving difficult. Management’s priority is to continue to identify issues and opportunities to address operating performance and to maximise available cash flow,” said Toland.
Europe
Aryzta’s business in Europe reported a 0.3% increase in first quarter sales to just over €435m. Excluding currency headwinds, the business saw organic sales growth of just under 1% in the quarter. A 0.7% decline in sales volumes was more than offset by a 1.3% increase in product pricing. Aryzta said it is continuing negotiations with customers for higher prices to offset Brexit related costs as well as the record high price of butter in Europe in the last six months.
North America
Aryzta’s business in North America continues to struggle as sales declined 11.5% to €410m.
Sales volumes for the first quarter declined 7%, which is all driven by weakness in the Cloverhill business in the US. Aryzta said the challenges being faced by the Cloverhill business related to the “strategic misstep” of the business into the branded convenience food channel as well as labour turnover and wage inflation in the US.
Aryzta’s rest of world division reported a 2.5% increase in sales to €65m, with strong organic sales growth of nearly 8%.