French cuisine company experiences a 15.5% drop in profits as consumers prioritize affordability
In the dynamic market landscape of 2025, Swiss-Irish food giant Aryzta reported a 15.5% decline in profits to €49.1 million for the first half of the year [1][5]. Despite a 3% increase in revenue to approximately €1.09 billion [3][5], the company faced a pressure on profitability.
The earnings before interest, tax, depreciation, and amortisation (Ebitda) margin slightly decreased from 14.2% to 13.9% [1][3][5], indicating that although Ebitda rose marginally, the margin compression suggests rising costs or less profitable sales mix.
The market environment remains challenging due to further cost inflation and pressure on consumer spending [3][5]. Aryzta experienced a negative mix impact of 0.3% [3], which suggests some sales were in lower-margin products or markets, affecting overall profitability.
Organic growth accelerated, particularly in Q2 at 4%, and innovation contributed around 18% of revenue [3][5]. However, these benefits were offset by rising costs and market challenges, leading to operating margin pressures.
The company's focus remains on delivering continued business performance and efficiency improvements [2]. Aryzta is targeting cost reductions in the range of €40 million-€60 million from operations, procurement, and structural cost initiatives between now and 2028 [4].
The group's performance in Europe was described as "solid" in most markets, with good support from positive volume and pricing [1]. Ebitda in Europe reached €127.4 million, representing a margin of 13.2%, down 0.4 of a percentage point on the year before [1].
Activity in the rest of the world significantly improved, achieving Ebitda of €23.1 million, corresponding to a margin of 19.6%, which was 0.9 points higher than a year earlier [1].
Aryzta cited price volatility in key raw materials like butter, eggs, and cocoa, as well as increased labor costs, as reasons for the decline in profits [6]. The company generated free cash flow of €29.4 million, which was below the year ago period to June 2024 [1].
The plan also involves incremental ramp-up costs of €20 million-€30 million for the further roll-out of IT infrastructure, resulting in a net projected saving of €20-€30 million [4]. Aryzta remains committed to driving performance through a focus on organic growth, innovation, process automation, and strict cost discipline [2].
Looking forward, the company targets its 2025 full-year guidance for low to mid-single digit organic growth and improved performance across key financial metrics [4]. Despite the challenges faced in the first half, Aryzta's CEO, Michael Schai, reported a "solid" first half performance in a challenging market environment [1].
References:
[1] Aryzta reports H1 results. (2025, July 1). Retrieved from https://www.aryzta.com/aryzta-reports-h1-results/
[2] Aryzta focuses on delivering continued business performance and efficiency improvements. (2025, April 1). Retrieved from https://www.aryzta.com/aryzta-focuses-on-delivering-continued-business-performance-and-efficiency-improvements/
[3] Aryzta's H1 results: What went wrong? (2025, July 2). Retrieved from https://www.foodbevmedia.com/articles/aryztas-h1-results-what-went-wrong/
[4] Aryzta targets cost reductions of €40-€60 million. (2025, June 1). Retrieved from https://www.aryzta.com/aryzta-targets-cost-reductions-of-40-60-million/
[5] Aryzta's H1 results: Key takeaways. (2025, July 2). Retrieved from https://www.foodbevmedia.com/articles/aryztas-h1-results-key-takeaways/
[6] Aryzta blames raw material price volatility for H1 losses. (2025, July 2). Retrieved from https://www.just-food.com/news/aryzta-blames-raw-material-price-volatility-for-h1-losses_id211082.aspx
In the strategic plan, Aryzta aims to achieve cost reductions between €40 million-€60 million from operational, procurement, and structural cost initiatives by 2028, with a focus on driving performance through organic growth, innovation, process automation, and cost discipline.
Following the decline in profits, the company is committed to improving its financial metrics, targeting low to mid-single digit organic growth and overall performance in the 2025 financial year. This comes as Aryzta continues to navigate the challenging market environment, with rising costs, pressure on consumer spending, and volatility in key raw materials.
