Owing to the COVID-19 impact, Aryzta’s trading patterns for the third quarter have been in line with guidance up until March 15, 2020. However, market conditions and prospects have deteriorated.
It is now clear that COVID-19 will have a material impact on the group’s performance in FY20. It cannot reasonably gauge what consequences will result from the situation as neither the duration nor the depth of this issue can be fully assessed at this point in time.
Health and safety, the key priority of Aryzta’s board and executive management is to ensure the health and wellbeing of its colleagues, customers and suppliers during this challenging period.
The company is continuously monitoring the situation with its key stakeholders and are actively assessing the consequences of recent government responses to COVID-19 within the different channels.
Its focus is on ensuring that the highest quality and product safety standards across all bakeries in full compliance with reinforced COVID-19 protocols.
Business continuity
The company has full business continuity plans in place and active where necessary to maintain service levels and to meet our customers’ expectations.
Its board and management, together with all of its employees, are committed to playing their part as an essential industry providing food at this difficult time.
Actions are progressing to implement flexible working policies and, where necessary, to adjust available capacity to the rapidly changing demand of the different channels.
In Europe, QSR (10 per cent of European revenue) and foodservice have been strongly impacted by the significantly reduced footfall following government related restrictions. Retail is performing well with a small uplift coming from this channel.
In North America, a similar pattern is now visible in the major states, with QSR and foodservice affected by COVID-19 related restrictions, partially offset by drive-through service offerings or home delivery, which many restaurants and QSRs provide. Retail sales are still robust and reorders are coming through the supply chain.
In the Rest of the World, the foodservice channel, particularly in South East Asia, is being strongly impacted, while the QSR segment in Brazil and the Pacific region is challenging due to the reduced footfall resulting from government-related restrictions.
Cash/cost management
The company is taking decisive action to maximise cash, reduce costs and maintain a strong liquidity position.
There is significantly reduced capital spend. All future capital projects have been suspended. There is reduction in delivery of further operating costs and efficiency.
Capacity has been actively reducing capacity to meet demand. All discretionary costs have been eliminated. Labour costs have been reduced. Hours and workforce have been actively reduced in the most impacted countries.