ARYZTA (ARYN) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was €1,055.2m, down 0.5% year-over-year, with organic growth at -0.7% and flat volume, impacted by portfolio management and subdued consumer sentiment.

• EBITDA rose 7% to €149.8m, with margin expanding to 14.2%, up 100bps year-over-year, driven by innovation and cost discipline.

• Innovation share nearly doubled to 19.4% of revenue, with premium products now at 40%.

• Free cash flow was €53.0m, down from €72.1m in H1 2023, mainly due to higher CapEx and lower working capital contribution.

• ROIC improved to 13.1%, reaching top quartile bakery industry levels and exceeding the mid-term target.

Financial highlights

• Gross profit increased 11.6% to €224.6m, with gross margin up 290bps year-over-year, driven by innovation and discontinuation of low-margin businesses.

• Operating profit rose 12.5% to €85.6m, and diluted EPS grew 17% to 4.1 euro cent.

• Net debt reduced to €927m, with leverage ratio at 2.9x, ahead of target.

• Financing costs, including hybrid dividends, decreased by €2.3m to €33.5m, supported by hybrid bond buy-back savings of €7.1m.

• CapEx guidance maintained at 3.5%-4% of revenue, with increased investment in growth and IT projects.

Outlook and guidance

• Guidance for 2024 reiterated: organic growth expected in the low to mid-single digit range for the full year, with H2 performance to improve due to reduced portfolio management impact, innovation, and seasonality.

• EBITDA margin target of at least 14.5% remains, with continued margin expansion expected.

• Focus remains on margin progression, cost optimization, and deleveraging.

• New midterm targets to be communicated in H1 2025.