As announced in September last year, the company plans to invest €400m to optimise its supply chain and consolidate its manufacturing facilities.
In its half year results announced yesterday, the firm said the initiative would be rolled out over the next two years, making 2012 “a transformational year”.
Results roundup
For the six months ended January 2012, total group revenues were up marginally to 1.9bn, a 0.9% increase.
EBITA stood at 178.8m, up 3.3% on the previous year.
The group’s agri-service business Origin Enterprises suffered losses during the period, but excluding this business, Aryzta’s food group performed strongly.
Revenues were up 9.4% to 1.4bn, while EBITA grew 11.3% to 172.9m.
The company said growth was acquisition led, including the Honeytop buy in August last year.
Transformation
Aryzta CEO Owen Killian said: “Underlying performance was robust despite challenging trading conditions.”
“2012 remains a critical year of transformation for ARYZTA with significant ATI driven change underway across the Group to enhance our customer centric focus. “
The company plans a transformation initiative it calls ATI, which will reposition the business.
Aryzta will invest €400m to move production to “fewer, larger, more efficient multi-product bakeries”.
The process will continue through to 2013.
“Aryzta views ATI as key to improving competitiveness as Food North America and Food Europe move to a single instance Enterprise Resource Planning platform,” said the firm.
Acquisitions not ruled out
Killian said that although the focus was internally on supply chain efficiencies, he would not rule out acquisitions during this transformational period and hinted at investment in emerging markets.
“We continue to have an appetite for acquisitions that will strategically help us to reposition geographically,” he said.
“Post transformation will come from future bolt-on acquisitions,” he added.
Impact on prices
Aryzta has implemented price increases for the past three quarters in response to volatile raw material costs.
Killian said that while he expects commodity prices to remain volatile, Arytza’s prices were unlikely to rise.
“We’re not looking at substantial price increases in the current quarter or the next quarter,” he said.
In 2012, the company expects its North America business to grow, while declines are anticipated in Europe amid a tough economic environment.