ARYZTA posts 2020 annual report

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ARYZTA AG, the international food business with a leadership position in frozen B2B bakery, has released its 2020 annual report, as the board looks to simplify the model after posting a loss of earnings and revenue due to COVID-19.

– Group organic revenue declined by (11.6)%, reflecting impact of COVID-19 in H2
– The effect of the COVID-19 pandemic had a material impact on underlying EBITDA generation driving negative operating leverage in H2
– Economies re-emerged from lockdown in H2 at varying speeds and concerns remain about a second wave of restrictions in some countries
– Management has taken decisive action to maximise cash and reduce costs
– Gradual sales improvement with monthly revenue evolution tracking (18)% in July versus (23)% in June, (36)% in May and (49)% in April
– Improvements have been seen in the QSR and Retail channel but Foodservice remained subdued due to continued restrictions in key markets
– Strong liquidity position of €424m, consistent with guidance that ARYZTA would finish the year with good overall liquidity
– Before the COVID-19 crisis, five out of six strategic indicators were on track and portfolio refocus into B2B bakery achieved with the disposal of 43.1% of Picard

FY 2020 Financial Summary
– Group organic revenue declined by (11.6)%; total revenue declined by (13.4)% to €2,931m
– Europe organic revenue decline of (12.7)%
– North America organic revenue decline of (11.8)%
– Rest of World organic revenue decline of (3.5)%
– Underlying EBITDA of €260m decreased by (15.4)% and by (33.0)% like-for-like before IFRS 16
– Underlying EBITDA margin decreased by (20) bps to 8.9%, like-for-like declined by (210) bps before IFRS 16
– Underlying net loss of €(18)m versus underlying net profit of €74m in FY19
– Operating free cash generation of €(85)m, with negative cash flow generated from activities of €(134)m due to cash outflow in H2
– Net Debt of €(1,011)m1 and Net Debt: EBITDA2 ratio 3.68x
– IFRS operating loss of €(774)m; compared to IFRS operating profit of €5m in FY19
– IFRS loss for the year of €(1,092)m compared to IFRS loss of €(29)m in FY19; non-cash impairment charges and losses on disposal of €(988)m, mostly coming from the North American region
– IFRS fully diluted loss per share of (114.8) cent versus (8.3) cent in prior period

Commenting on the FY2020 results, ARYZTA AG Chairman Urs Jordi said: “COVID-19 has had a material impact on ARYZTA’s FY20 results. Nevertheless, the company has kept a strong liquidity position through the crisis and at year-end. We will explore all strategic options available, internal and external, acting in the best interests of ARYZTA and its stakeholders, and in this process we will continue to evaluate all unsolicited expressions of interest received. I am fully convinced that ARYZTA has great potential and we will do our utmost to put the company back on the road to success.”

Commenting on the FY 2020 results, ARYZTA AG Chief Executive Officer Kevin Toland said: “COVID-19 has impacted the lives of people across the world. It has also strongly impacted our FY20 results but, whilst prioritising the health and safety of our colleagues, customers and suppliers, we have been able to navigate the company through these challenging times. Up until 15 March trading patterns were in line with previous guidance. However, when the COVID-19 consequences became visible, we took decisive action to protect the business and our cash resources. This included pausing production in bakeries to reduce capacity in line with demand, furloughing headcount, availing of government relief initiatives, suspending capital expenditure and reducing discretionary cost where possible. As a result we finished the year with a strong overall liquidity position. While we expect the recovery to be bumpy in the coming months, we believe that ARYZTA is well-positioned to recover and compete as economies stabilise and return to growth. I am immensely proud of the tremendous efforts of our people in supporting our customers and suppliers throughout this period.”

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