Global bakery business Aryzta has reported a decline in revenues in its European and North American divisions.
Overall group revenues fell 3.3% in the company’s first quarter to €962.3m (£820m), with underlying revenue down 1.2%.
While underlying growth in the European division was 1.4%, this was impacted by currency fluctuations and disposals, resulting in a 1.4% decline in European revenues to €436.3m (£371m).
European volumes had grown 1.8%, reported Aryzta, despite temporary disruption due to consolidation of the business’s manufacturing activities in Germany.
Aryzta’s North American business declined 7.5% in the first quarter to €462.5m(£394m), with underlying revenue down 4.7%.
A 5.7% volume decline in North America largely reflected the impact of volume losses arising from the renewal of long-term contracts, said the company, adding that this had been mitigated by higher prices as a result of changes in customer product ranges.
Aryzta said it expected some of its volumes to be replaced by “the solid pipeline” of new food items.
Revenue in the business’ Rest of World division increased 21.1% in the first quarter to €63.5m as a result of 9.7% underlying growth and an 11.4% positive currency impact. Aryzta said the division had continued to grow volumes and expand channels.
“The revenue development in Q1 FY17 is in line with our expectations,” commented Aryzta chief executive officer Owen Killian.
“The weaker underlying revenue development reflects the impact of expected contract renewal volume declines in North America, the timing of new business listings, as well as a subdued European performance disrupted by consolidation of manufacturing activities in Germany.
“Aryzta remains focused on unlocking the underlying revenue development of its well-invested assets and demonstrating its strong cash generating capacity.”