Bakery firm Aryzta has reported a 19.8% rise in first quarter revenue to €509.1 million, largely driven by pricing increases (+18.1%).
The group said that bakery demand remains 'solid' in most of its markets, despite what it described as 'significant inflation-driven price increases'.
At group level, organic growth of 22% was driven by 18.1% pricing, volume growth of 4.1%, and a mix decline of 0.2%.
Aryzta Europe Performance
Its Aryzta Europe business reported organic revenue growth of 22.1% for the period, driven by price growth of 19.7%, while volumes were up 2.8%.
It said that its Europe business was boosted by double-digit organic revenue growth in its foodservice business, together with 'positive revenue growth' in the QSR and retail channels. Its foodservice business saw a particularly strong recovery in France, it noted.
In its Rest of World business, Aryzta reported an organic revenue increase of 21.4%, comprised of volume growth of 12.0% and pricing of 8.7%.
No Reduction In Inflation
Commenting on the group's first-quarter performance, Aryzta chair and interim CEO, Urs Jordi, said, "We are not seeing any reduction in the upward inflationary trends. Aryzta is communicating closely with all customers and working hard with them to manage these significant inflationary pressures. However, the persistent high level of cost inflation is such that further pricing will have to follow."
The group said that it is reiterating its full-year guidance to deliver 'further improvements across all metrics', and expects its performance to accelerate in the second half of the year.
"This takes into account the risks around the ongoing challenges of inflationary price recovery and the highly uncertain macro-economic environment," Jordi added.
Analyst Viewpoint
Commenting on its performance, analyst Gary Martin of Davy said, "Revenue momentum has persisted through Q1 with organic growth +22% – performance was driven primarily by pricing (+18%), with volume remaining resilient (+4%). ‘Significant’ inflation is expected to persist, with further pricing required to offset the upward cost pressures.
"Full-year guidance remains unchanged with performance expected to accelerate in H2. We envisage no material changes to our FY23 forecasts."
© 2022 European Supermarket Magazine – your source for the latest A-Brands news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
