Aryzta AG

ARYZTA reported H1 2026 revenue of EUR 1,063.9 million, down 2.1% year over year, with organic growth of -2.7%; the decline was driven mainly by Germany and volume/mix of -2.1%, partly offset by foreign exchange of +0.6%. EBITDA was EUR 139.9 million, with a reported EBITDA margin of 13.2%, down 70 basis points year over year; this included about EUR 5.4 million of one-time costs, roughly 50 basis points of revenue. Free cash flow was EUR 23.6 million, roughly in line with last year, and EPS was EUR 1.82, also described as largely stable year over year. Gross margin before distribution was flat versus H1 2025 and up 70 basis points sequentially versus H2 2025, helped by 90 basis points from procurement and other savings plus 20 basis points from innovation. For 2026, management expects organic growth at the lower end of the guidance range, further EBITDA and EBIT improvement, solid cash generation, and an improvement in net debt to EBITDA. Financing cost guidance was improved to EUR 37 million-EUR 40 million, from EUR 40 million-EUR 43 million previously.

Urs Jordi framed the half as difficult, driven by heightened macro and geopolitical uncertainty, rising consumer savings, and weak sentiment, especially in Germany. He stressed that the company is executing Project Excellence faster, expanding it across more bakeries and markets, and using innovation and cost control to defend margins. He also said management is reviewing all options for Germany to maximize shareholder value, while midterm plans for 2028 remain unchanged.

Martin Huber said the business delivered a resilient performance despite a difficult consumer backdrop, but Germany weighed heavily on revenue and profitability. He pointed to EBITDA margin of 13.2%, free cash flow of EUR 23.6 million, ROIC of 11.1%, and net debt of EUR 789 million with leverage at 2.7x; core equity rose to 23.3% of assets from 18% last year. He also highlighted reduced total financing costs of EUR 16.8 million, down EUR 5.5 million year over year, and said the company expects gross cost reductions of EUR 8 million-EUR 10 million so far from Excellence, with EUR 20 million-EUR 30 million of net savings targeted by 2028.

Analysts focused on Germany, asking whether the weakness was due only to market decline or also to lost contracts, insourcing, or pricing pressure. Management said the main issue is the market and consumer environment, not contract cancellations, but acknowledged that in Germany some customers with their own manufacturing can re-insource when the market is short, reducing the addressable market. Questions also pushed on what can drive growth in 2027 and beyond and whether the German review could hurt future cash returns; management pointed to channel penetration, new facilities such as Perth, growth CapEx, and innovation, and said the Germany review should conclude sometime in the second half of this year.