European bakery products manufacturer Baker & Baker has reported revenue, gross profit and adjusted EBITDA growth in its latest set of financial accounts for the year ending 2023 at Group level.
Baker & Baker reported revenue growth of 12% to €620m, gross profit growth of 18.2% to €83.9m and adjusted EBITDA (excluding non-underlying items of €11.4m) of €26.5m – an increase of 24.7% on prior year.
This encouraging financial performance underlines the sustained growth of the Group since its formation as a sole bakery products business two years previously.
Volume growth of 0.2% during the financial year represented a better than expected performance in light of the cost-of-living crisis and raw material inflation, and the pronounced difficulties that many of the core bakery categories experienced during 2023.
Baker & Baker undertook a number of structural changes to improve the performance of the Group in 2023, including investing €5m in productivity enhancements and a shift in product mix to address changing consumer preferences in the face of the cost-of-living crisis. Cost controls were also a key driver of improvement in adjusted EBITDA performance in comparison to prior year.
Amongst Baker & Baker’s capital projects, the £2.9m investment in the expansion of the bakery’s cookie capabilities at its Wirral site was the most significant. The investment commenced in 2023 with the new cookie line becoming operational midway through 2024.
Within its European markets, Spain delivered particularly strong growth numbers, recording a 6.5% rise in volume and 22.9% in revenue.
Baker & Baker also acquired its Peniche facility in Portugal that came fully online in 2023, with its iconic Pastel de Nata product complementing the business’s portfolio throughout European markets.
The business’s ability to cultivate collaborative relationships with retail and food service partners across its European markets allowed it to operate in an agile manner and respond to fluctuating consumer trends, particularly within its core American Sweet Bakery category.
2023 saw Baker & Baker continue to expand into new markets, including its establishment in the Middle East, which commenced in the latter stages of 2022. In 2023, the UAE and Jordan became growth markets for Baker & Baker, and paving the way for the business to enter Saudi Arabia and secure its first sales in 2024.
Product launches continued to be a key feature of the Group’s incremental sales growth, particularly via its exclusive licensing partnership with Mondelēz. Notable product launches included its Cadbury Crunchie Doughnut and Cadbury Chocolate & Orange cookies.
Baker & Baker also made significant progress on its ESG journey in 2023, developing a detailed climate strategy and setting a net zero target of 2040 at a Group level.
Additionally, the business’s cash position improved significantly to €30.3m at the end of 2023, further underlining the stability of the Group.
John Lindsay, CEO, commented: “Baker & Baker is a clear category leader in American Sweet Bakery, and our expertise and market know-how offers a key point-of-difference with customers, allowing us to drive sales throughout the retail and food service channels.
“2023 was also characterised by the cost-of-living crisis and inflation across all major food categories, and so to have maintained volume performance in the face of these market challenges represents a significant success.
“Our financial performance in 2023 provided an excellent platform for further growth across the Group, and as we seek to expand into new markets in 2024.”
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