Milling & Baking News Corporate Profiles - 2017 - 68

Company Overview

Aryzta AG
New management team seeks to right ship

Chief executive officer -
Kevin Toland

68 \ October 2017

Aryzta AG
EBITA

in millions of Swiss francs
fiscal years ended in July

announced the appointment of Frederic
Pflanz as Aryzta's new chief financial officer.
Aryzta's North America business also has
new leadership. The company in June 2017 announced the appointment of Keith Cooper, managing director of F.T.I. Consulting, as c.e.o. of the
Aryzta's America business on an interim basis.
Mr. Cooper is the leader of F.T.I.'s Performance
Improvement practice in the United States and a
senior executive in F.T.I.'s corporate finance division. He has been supporting Aryzta's management in North America on business optimization
and efficiency improvements since March 2017.
At the same time, Ronan Minahan stepped down
as chief operating officer of the Americas business to pursue other interests.
The sweeping management changes came as
it became clear that the fiscal year 2017, which
ended July 31, would be a disappointing one.
In January 2017, Mr. Killian, in reporting
the company's five-month results through Dec.
31, 2016, cautioned earnings may drop 20%
in fiscal 2017 in large part because of difficulties encountered in its Americas business. The
company's effort to significantly expand the
Otis Spunkmeyer consumer brand in the United
States was viewed with misgivings by major
buyers of Otis Spunkmeyer par-baked products,
and Aryzta acknowledged this resulted in "earlier-than-anticipated loss of co-pack volumes."
The market reaction to Mr. Killian's earnings warning was punishing with the company's
stock falling as much as 36% in Zurich.
In the year ended July 31, overall EBITDA
at Aryzta decreased 31% to €420.3 million
($499.2 million) from €609.6 million, while
underlying net profit fell 42.5% to €179 milllion from €311.5 million. Revenues fell 2.1% to
€3,796.8 million from €3,878.9 million.
Aryzta North America EBITDA plummeted 43%
to €170.1 million ($202.1 million), which compared with €300.1 million in fiscal 2016. EBITDA
margins declined 620 basis points to 9.5% from
15.7%.
Aryzta North America revenues in fiscal 2017
decreased 5.7% to €1,799.1 million ($2,136.9
million) from €1,908.1 million. CP

2017

277.3

484.9

2016

514.0

2015

Aryzta AG
net sales

in millions of Swiss francs
fiscal years ended in July

new management team has been installed at Aryzta AG, Zurich, Switzerland, with the aim of revitalizing the
struggling Swiss-Irish food group, which has a
major presence in North America established
through strategic acquisitions made during
the past several years, including La Brea, Otis
Spunkmeyer, Pennant and Cloverhill Bakery.
Kevin Toland took the helm as chief executive officer on Sept. 12. Mr. Toland's appointment was announced in May by Gary McGann,
who himself was appointed Aryzta's chairman
in December 2016. Mr. Toland replaced Owen
Killian, who resigned at the end of the company's 2017 fiscal year in July. Mr. Killian had
been c.e.o. and executive director since 2008,
when Aryzta was formed from a combination
of IAWS Group of Ireland and Hiestand Holding
AG of Switzerland.
Mr. Toland most recently was president and
chief executive officer of Dublin Airport Authority since 2013. Prior to that role, Mr. Toland
was president and c.e.o. of Glanbia USA/Global
Nutritionals, Inc., Carlsbad, Calif., where he led
that business to become the largest manufacturer and exporter of American-style cheese
and a global leader in sports nutrition.
Shortly before Mr. Toland assumed his
new role at Aryzta, the company on Sept. 7

2017

3,796.8

2016

3,878.9

3,820.2

2015

Aryzta AG
share price

per share of Swiss francs
50

26
Sept. Dec. Mar. June Sept.
2016
2017

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