Full Year Results for the year ending 31 July 2008

ARYZTA AG: Building on Solid Foundations
Full year results ended 31 July 2008
  • Pro forma Revenues of € 3.13 billion 
  • Pro forma Operating Profit of Â€ 262 million
  • Pro forma Earnings Per Share of 202c 
  • Strong performance from both IAWS and Hiestand 
  • Outstanding contribution from Origin Enterprises
Zurich, 22 September 2008. Formed from the merger of IAWS Group in Ireland and Switzerland’s Hiestand Holding AG, ARYZTA AG is the global leader in speciality bakery. ARYZTA was listed on the SWX Swiss Stock Exchange and the Irish Stock Exchange on 22 August 2008, and today presents pro forma results to 31 July 2008. These show Revenues of Â€3.13 billion (approximately CHF 5bn) and Operating Profit of Â€262 million, with Earnings per Share of 202c. This result reflects a strong performance from both IAWS Group, Limited and Hiestand Holding AG over the period under review.
Commenting on the results of the newly enlarged Group, ARYZTA AG Chief Executive Officer Owen Killian said:
“2008 was a great year for IAWS and Hiestand, culminating in the successful merger to create ARYZTA, completed shortly after the financial year end. The year was marked by further strong growth in both businesses. The pro forma results for ARYZTA reflect the enlarged base from which this new business will develop and grow. 
The results for Hiestand for the six months to 30 June 2008 and the IAWS results for the year to 31 July 2008 demonstrate the growth momentum now channelled into ARYZTA from both Food businesses. In addition, the momentum created by Origin Enterprises of which IAWS Group owns 71.4 per cent, has delivered an outstanding contribution. The Food businesses have experienced continued consumer demand across all channels for their always fresh and convenient food offerings, while Origin has benefited substantially from a strong performance in agricultural markets and acquisitions in the period.
ARYZTA is primarily a speciality bakery. The aroma of a fresh bakery conveys a powerful consumer response in all markets. Expertise in the bakery world is at the heart of who we are and is one of the overarching connections across our entire portfolio. The birth of ARYZTA creates a global business with geographic, customer and product diversification and leading positions in the growth area of the speciality bakery market. From this base and with this underlying momentum, ARYZTA can look forward with confidence to further sustained earnings growth and development.”
Note for analysts
A telephone conference for investment analysts is being held at 9.00 a.m. CET (8.00 a.m. BST) today, Monday 22 September 2008, during which CEO Owen Killian and CFO Patrick McEniff will discuss the results.
The numbers to dial for this telephone conference are:
Switzerland: +41 44 580 46 23
Ireland: +353 124 60 301
UK: +44 20 30 43 24 66
USA: +1 703 621 9130
Pin code: 196124 # 
Results Announcement
Year ended 31 July 2008
Pro Forma Results Summary
Pro forma results based on audited results for IAWS Group, Ltd. (“IAWS”)  for the year ending 31 July 2008 and Hiestand trailing twelve month results to 30 June 2008 (Hiestand six months results to 31 December 2007 extracted from audited accounts for the year ended 31 December 2007 and unaudited six months results ended 30 June 2008). 
Further disclosures on the pro forma adjustments and basis of preparation are set out in Appendix 2 of this announcement.
1.       Before impact of intangible amortisation, exceptional items.
2.       Presented after interest and tax.
3.       Presented after dilutive impact of Origin equity entitlement.

ARYZTA – Outlook
The bringing together of the two complementary businesses of IAWS and Hiestand to create ARYZTA has resulted in a leading global food business focused on the speciality bakery market. ARYZTA commands significant geographic diversification with its customer base extending from North America through Eastern and Western Europe to South East Asia and Australia. 
ARYZTA is confident that its business model will deliver benefits to customers and is well placed to deliver future earnings growth. 
  Hiestand Holding AG
Results Announcement
6 Months ended 30 June 2008
Hiestand Holding AG Interim Results Summary
Hiestand six months results to 30 June 2008 are unaudited. Hiestand six month results to 30 June 2007 are based on previously published interim results for the six months to 30 June 2007.
Hiestand 30 June 2008 results have been translated using a rate of CHF1.63 to €1. The 30 June 2007 results have been translated using a rate of CHF1.66 to €1.
*Before impact of intangible amortisation and exceptional items.
Hiestand Half Year Results Highlights
  • Excellent Revenue Growth and Margin conversion during the 6 month period to 30 June 2008.
  • Increase of business penetration and distribution in all Hiestand countries; strong organic growth.
  • Focus on Hiestand core business, concentration on core competences and further development of Hiestand strengths.
  • Ongoing efficiency increase in all business areas.
  • Fricopan fully integrated and incorporated for the entire period.
IAWS Group, Ltd.
Results Announcement
Year ended 31 July 2008
Results Summary 
                1.       Before impact of intangible amortisation, exceptional items.
                2.       Presented after interest and tax.
                3.       Presented after dilutive impact of Origin equity entitlement.
IAWS Full Year Results Highlights
  • Excellent underlying revenue growth across the business.
    • Food Europe 9.4%
    • Food North America 14.1%
    • Origin 29.9%
  • Operating margin maintained in the Food business.
  • Origin operating profit increased by 86% in the period.
IAWS Group Financial Review
IAWS announces an increase of 15.8 per cent in diluted earnings per share for the year ending 31 July 2008 to 109.1c compared to 94.2c in the previous year. The adjusted profit for the financial year was €140.1 million compared with €120.6 million in 2007. 
As a result of the merger and on acceptance of the shareholder agreement no dividend will be paid based on the results of the business for the year to 31 July 2008.
Group revenue was 39.5 per cent higher at €2.661 billion. Food grew revenues to Â€1.162 billion, an increase of 14.1 per cent with an underlying growth of 11.1 per cent. Origin’s revenues were Â€1.499 billion^, an increase of 68.5 per cent with an underlying growth of 29.9 per cent.
Operating profit*
Group operating profit including associates is up 29.6 per cent to €224.4 million. The operating profit from the Food business including associates and JV was €151.2 million compared to €131.3 million in the previous year – an increase of 15.1 per cent. Origin delivered an excellent performance with operating profits of €73.2 million including associates which is 75.1 per cent higher than last year.
The profit contribution from Food associates and joint venture grew by 12.3 per cent to €25.8 million compared with €23.0 million in the previous year. The profit contribution from Origin’s associates was down to €2.3 million from €3.7 million year on year reflecting the movement of profits from Odlums into full consolidation following the acquisition of the remaining 50 per cent of that business during the period.
Minority interest±
IAWS Group minority interest has increased to €13.9 million in the year compared with €0.5 million in the previous year. This reflects profit flows from Origin attributable to minority shareholders in the period following the IPO of Origin in June 2007. 
Free cash flow
During the year, due to continued strong underlying performance and cash management, the Group’s free cash flow increased by 34.4 per cent to €183.5 million.
Balance sheet
Net assets increased by 10.4 per cent to €846.8 million in the period. Total borrowings were Â€588.3 million compared with €479.6 million in the previous year. This is a strong performance after a cash acquisition spend for the Group of €193.0 million and investment capital expenditure of €143.0 million. Origin cash acquisition and investment capital expenditure spend was €157.4 million and €15.8 million respectively. Food business cash acquisition and investment capital expenditure spend was €35.6 million and €127.2 million respectively. Net debt (€175.1 million): EBITDA for Origin was 2.20 times, while net debt (€413.2 million): EBITDA ratio for the Group excluding Origin was 2.22 times.
* Items presented before impact of intangible amortisation, exceptional items 
± After dilutive impact of equity entitlements in Origin.  
^ Excludes intra group sales to IAWS Food businesses
^^ Share of associates and joint venture is presented after interest and tax
IAWS Group Review of Operations
IAWS continued its record of double digit growth during a year in which the foundations were put in place to ensure the successful merger with Hiestand Holding AG (“Hiestand”) to create ARYZTA, a global leader in speciality bakery. 
IAWS highlights for the year included:
  • Successful management of commodity inflation and customer pricing to maintain margins.
  • 15.7% operating profit growth (excl associate and JV).
  • 14.1% underlying revenue growth in Food North America.
  • 9.4% underlying revenue growth in Food Europe.
  • 21.0% growth in free cash flow.
  • First full year of contribution from Otis Spunkmeyer.
  • New innovative European facility nearing completion on schedule.
  • First year financial and operating performance.
  • 86.0% operating profit growth (excl associates and JV).
  • 29.9% underlying revenue growth.
  • 64.9% growth in free cash flow.
  • Acquisition of Masstock Group Holdings Ltd. (“Masstock)
  • Acquisition of controlling interest in Odlum Group Ltd. (“Odlums”)

Food North America: 
*before intangible amortisation and exceptional items
In the year under review, revenue grew by 22.8 per cent or 14.1 per cent underlying. Segmental operating profit grew by 24.2 per cent year on year. The results for Food North America include a strong first full year contribution from Otis Spunkmeyer which was acquired in the 2007 financial year (November 2006).
The Group has made substantial investment in developing its Food businesses in the North American speciality bakery market through acquisition and capital investment in recent years. The Food business now has circa 2,400 employees, 8 manufacturing facilities and 53 direct store delivery locations across America.
North America has a circa Â€8 billion (US$12 billion) value added bakery market which has experienced a compound annual growth rate (CAGR) of circa 4 per cent over the last 10 years^. Through La Brea Bakery and more recently Otis Spunkmeyer, the Group has grown category leadership in artisan bread and in sweet baked goods. The Group’s growth in this segment is driven by its always fresh and convenient offerings, superior product and concept development and unique supply chain capabilities that convey substantial benefits over cost for customers.
The Group’s extensive asset base and significant reach across North America offers significant opportunity to leverage strong brands and manufacturing capacity to drive continued growth in the region. 
^Based on ARYZTA source, Euromonitor 2007 report and independent analysis.
Food Europe: 
*before intangible amortisation and exceptional items
Revenue in Food Europe, which comprises the Food businesses in Ireland, the UK and France, increased by 9.2 per cent, to €708.8 million. Underlying revenue growth was 9.4 per cent over the period. Operating profit in Food Europe increased by 10.4 per cent to Â€73.5 million.
Europe has a circa Â€14.1 billion value added bakery market with a 5 year CAGR of circa 4 per cent^. The Food business has an extensive product range in the speciality bakery market. In Europe, the Food business has circa 2,100 employees, 3 manufacturing facilities and 23 direct sales delivery locations.
ARYZTA has diverse businesses servicing many channels in both the foodservice and retail markets. In retail, the Food business offers value added concepts through focusing on space profitability and differentiated offerings that satisfy consumers’ continuous demand for high quality, appealing and convenient products. In foodservice, the Group offers solutions to customers to maximise their profitability through focussing on menus, lower staff costs, less baking time and minimal product waste.
In both retail and foodservice the Group offers an excellent value proposition which provides our customers with substantial benefits over costs. The Food business continually focuses and invests in concepts and product development that will ensure our value proposition to customers continues. This focus and investment in concept and product development is the primary driver of growth.
ARYZTA’s continued investment in world class technology complements the Group’s existing food infrastructure which, combined with the proven management team in place means that the business has a solid foundation to deliver further growth to ARYZTA into the future.
^Based on ARYZTA sources, GIRA 2006, Euromonitor 2007 reports and independent analysis.
  Origin Enterprises plc:
Note: Origin revenue excludes intra group sales with IAWS food businesses.
*before intangible amortisation and exceptional items.
**represents 2007 diluted EPS adjusted to reflect current capital structure of Origin Enterprises.
Revenue was 68.5 per cent higher at €1.499 billion, while underlying revenue growth excluding the impact of foreign currency and acquisitions was 29.9 per cent.  
Operating profit increased by 86.0 per cent to €70.9 million, underlying growth in operating profit excluding acquisitions and currency impact was 44.6 per cent.  
This has been a transformational year for Origin where it has significantly extended its business model through strategic acquisitions. In August 2007 Origin acquired a controlling interest in Odlums for €35 million and assumed €27 million of debt. The integration of this business is well advanced and the business has seen an improved performance in the second half of the year.
This acquisition was followed in February 2008, by the acquisition of Masstock, the leading provider of integrated agronomy and farming systems advisory services to arable and grassland farm enterprises across the United Kingdom and Poland.  This acquisition significantly contributed to the expansion of the Group and will deliver further geographic expansion opportunities.
Finally in July 2008, Origin acquired a 20 per cent interest in Continental Farmers Group plc (‘Continental Farmers’) a large scale producer of high value agriculture crops and providing access to direct arable farming in the expanding Eastern European market.
Alongside the growth achieved through acquisitions, Origin has continued to experience strong underlying performance in its Agri-Nutrition business. 
Origin has separately published its preliminary results for the same period. These results are available at www.originenterprises.com.
Subsequent to the delisting of IAWS Group plc and the creation of ARYZTA AG no dividend will be paid based on the results of the business for the year to 31 July 2008. The Board of ARYZTA expects to resume the payment of dividends to its shareholders based on the Group’s results for the financial year to 31 July 2009. 
22 September 2008
Appendix 1
IAWS Group, Limited
Group Income Statement
Group Statement of Recognised Income and Expenses
Group Balance Sheet
Group Cash Flow statement
Notes to the results statement
Year ended 31 July 2008
IAWS Group, Limited (formerly IAWS Group, plc)
Group income statement 
for the year ended 31 July 2008