Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ARYZTA AG. We currently have 7 research reports from 1 professional analysts.
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Profit warning: very disappointing Q2 performance digs into profitability further
24 Jan 17
Aryzta has issued a profit warning following a very disappointing Q2 performance. The new FY guidance is: top-line growth is expected to be in the -2% to 1% range (vs. 1-2% previously), whereas the EBITA margin should be in the 9-10% range (11.5-12.5% previously). The group expects fully-diluted EPS to be 20% lower on a FY basis.
Q1: a dull quarter
28 Nov 16
Aryzta’s Q1 update: underlying revenue is down 1.2% (cons. +0.4%) and -3.3% on reported figures. By division, Europe recorded a +1.4% OG, North America -4.7% OG (negative impact of contract renewals completed in FY16). The ROW recorded a strong +9.7% (both price- and volume-driven). The FY guidance is maintained: top-line growth is expected to be in the 1-2% range, whereas the EBITA margin should be in the 11.5-12.5% range.
FY outlook is not very exciting
26 Sep 16
Aryzta reported its FY results. Sales grew organically by +0.5% (+0.8% in Q4, 3.4% for FY if we exclude the contract renewals in North America) and +1.5% on reported figures. Underlying growth by region: Europe 4.0%, North America -3.1%, ROW +6.1%. The EBITA margin contracted 100bp to 12.5% (margins were weaker in all divisions, half of the group’s margin decline relates to increased investment in brand marketing). The JV contributed positively to the results (Picard improved margins). For FY17, the group expects that the negative impact of contract renewals in the US and loss volumes in Switzerland will weigh on the results. Top-line growth is expected to be in the 1-2% range whereas the EBITA margin should be in the 11.5-12.5% range (potential decline linked to contract renewals). The underlying fully-diluted EPS is expected to achieve 358 cents (vs. 350.3cents in FY16, up. c. 2%). Free cash should be in a range of €225-275m. The proposed dividend is CHF0.5731.
Q3 brings nothing special
06 Jun 16
Aryzta released its Q3 update. Underlying growth stood at 0.9% (vs. 0.8% in Q2) with volumes down 0.3% and pricing at +1.2%. On reported figures, sales were down 2.4% (-2.3% FX and -1% net acquisitions). Underlying growth by region: Europe 3.9% (vs. 3.8% in Q2), North America -2.3% (vs. -2.4% in Q2), ROW +7.5% (vs. +5.7% in Q2).
Erratic revenue development for another 18 months
14 Mar 16
Aryzta released its H1 results. Underlying growth stood at 0.2% (+0.8% in Q2). On reported figures, sales rose by 5.5% (FX: +5%, net acquisitions +0.3%). Underlying growth by region in Q2: Europe: 3.9%, North America -2.4%, and ROW 5.6%. In H1, the EBITDA margin contracted by 30bp (-30bp for Europe, -40bp for North America and flat for the ROW). The group informed that currently the momentum in revenue growth is lagging 18-24 months prior expectations. Management expects “erratic revenue development” for another 18 months as it commissions and optimises its capacity. Consequently, consumer insourcing in Europe and contract renewals in North America will have a c. -3% impact on the top line. Consequently, the short-term guidance should be seen as less relevant.
Q1 update: Stronger European performance wiped out by ongoing weakness in North America
07 Dec 15
Aryzta released its Q1 sales update. Organic growth stood at -0.4% (negative for the fifth consecutive quarter) with FX at 5.8% and net acquisitions at 0.7%. On reported figures, sales progressed by 6.1%. By division, Europe recorded a very strong +5.5% OG driven by the bakery network. North America continues to perform poorly with a -5.6% OG (negative for the fifth consecutive quarter) due to the lapping impact of SKU rationalisation and some supply chain contract renewals. The ROW recorded a 2.2% OG (improvement vs. -4.4% in Q4). The company guides for over €200m FCF in FY16 and an underlying fully diluted EPS of 365-385 cents.
13 Feb 17
Middlesbrough-based pawnbroker Ramsdens Holdings is set to join AIM on 15 February. Its growth is not coming from its core business but from providing foreign currency, pre-paid travel cards and international payments. The strategy is to increase the group’s online activities and grow the number of branches. In the year to March 2016, group revenues improved from £29.2m to £30m. The accounts of the main subsidiary show that foreign-currency margin rose from £5.36m to £7.59m. This contributes 35% of group gross profit. By contrast, the core business of pawnbroking, precious metal purchases and retail sales fell from £21.3m to £19.8m. Revenues from other financial services were flat at £2.6m. Ramsdens has 127 sites and last year it made an operating profit of £3.19m. In the six months to September 2016, revenues increased from £16.2m to £18.4m and operating profit improved from £2.81m to £3.48m. The placing will raise £15.6m at 86p a share, valuing the company at £26.5m. NorthEdge Capital, which backed a buyout in September 2014, will receive just over £10m from share sales. The NorthEdge stake will fall from 75.6% to 30.7%. The other £5m will go to the company and be used to repay the remaining loan notes and the costs of the flotation. By the end of March 2016, there were still £4m of loan notes outstanding to NorthEdge, with £4.86m paid off during the previous year.
Joy of Techs
21 Nov 16
ICT evolution is driven by technological development as advances are made which both meet and shape customer requirements. Our 2011 note No such thing as a telco described the modern reality in that former ‘telcos’ now deliver varying elements of a range of managed services. We built on this theme last year, exploring in further detail their evolutionary paths, operating fundamentals, and cashflow yield similarities. In the consumer environment, demand for bundles of technology is complemented by demand for content. Across the pond, the mooted combination of AT&T and Time Warner typifies the bundled need of ‘pipe’ and content, since unbundled alternatives such as FaceTime and WhatsApp can be easier and clearer to chat over, and Amazon and Netflix are easier to watch anywhere. In the UK, BT’s defensive actions cover delivery, content and capabilities, acquiring EE yet also buying football rights. While TV was long ago added to triple play to become quad play, voice is now merely an app, and fixed and mobile seen as just dumb pipes: it's the content that will influence consumer choices. Growth of TV and film as well as music and gaming over IP leads to UK small cap opportunities. In context of the drive to maximise value from pipes and access by offering content and data, we look at some amongst the potential tech small cap beneficiaries: Amino*, Keyword Studios, ZOO Digital*, 7digital*, KCOM* and CityFibre*.
Driving distribution – price target raised
26 Jan 17
Fever Tree’s (FEVR LN, HOLD, T/P 1250p) strong second half trading statement and clear ability to drive distribution forward this calendar year prompts us to upgrade both our full year 2016 and 2017 forecasts as well as raise our price target from 1080p to 1250p, which implies a full valuation for now.
Breakfast in America
24 Feb 17
Peacock Foods should ensure Greencore enjoys organic, profitable convenience food expansion in both the UK and US. The acquisition transforms America, in our view. Moreover, while long term mature market growth remains the salient investment case driver, Peacock’s benefits currently appear unrecognised in Greencore’s share price. BUY.
04 Nov 16
Looking at the top 50 non-listed casual dining and bar operators, it appears that the £80bn market for eating and drinking out in the UK is alive and well. The AlixPartners Growth Company Index (October 2016) shows that 2-year profit CAGR has improved over the last few years, and recent surveys from Greene King, Coffer Peach and Deloitte highlight elevated spend on out-of-home occasions. We attribute this to 1) a shift amongst consumers from an ownership to experience-led mentality which has driven habitual spend on leisure 2) an increasing focus on food from historically wet-led operators as they diversify their revenue streams to mitigate competition from the off-trade and match consumer gravitation towards eating out and convenience; 3) increasing regional penetration resulting from oversupply and high rental costs in London and 4) strong sector support from Private Equity investors, attracted to the Leisure sector's cash flow profile which can be leveraged against. Nevertheless, we may look back on 2016 as the peak for casual dining and bar operator profitability, particularly for London-weighted operators who face unfavourable rent and rate costs as well as potential loss of cheap migrant/seasonal labour. Past performance is certainly not a guide to future performance.
27 Jan 17
We initiate on Hotel Chocolat with a 270p price target and Hold rating. While the investment case is attractive, capturing production efficiencies accounts for half of the 21% PBT CAGR forecast to FY19E. Any slippage in the timing of related capital projects or resulting production disruption could weigh on the stock, which at 37x forward earnings is, in our view, priced for perfection. With the share price up 90% since IPO last year, we suggest investors await a more favourable entry point.