REG-Aryzta AG Statement re Market Update

Aryzta AGAnnouncement

13/08/2018 07:00

      Statement re Market Update
    

    

      NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE 
      UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN 
      WHICH THE DISTRIBUTION OR RELEASE WOULD BE UNLAWFUL.
    

      THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
    

      ARYZTA AG
    

      News Release 
Zurich/Switzerland, 13 August 2018
    

      ARYZTA AG’s Board has resolved that following a comprehensive review of 
      its capital structure it intends to raise up to €800 million of equity 
      capital to strengthen its capital structure; and provides an update on 
      strategic, operational and financial developments within the business.
    

      

        ARYZTA plans to raise up to €800 million of equity capital to create 
        the necessary strategic and financial flexibility to implement its 
        business plan
      
      

        Confirms compliance with its covenants in FY2018
      
      

        Confirms that Q4 trading was in line with expectations, including 
        meeting EBITDA guidance for FY2018
      
      

        Project Renew targets to deliver annual cost savings of €90m by FY2021
      
      

        Seeks amendments to the terms of its Term Loan and Revolving Credit 
        Facility
      
      

        In addition to the announced capital increase, remains committed to 
        its previously announced €1bn deleveraging plan, comprising at least 
        €450 million of asset disposals and the balance from cash flow 
        generation
      
      

        Will provide further details, including on the planned capital 
        raising, in conjunction with the FY2018 results on 1 October 2018
      
    

      ARYZTA has undertaken an in-depth review of its strategy and developed a 
      bottom-up business plan, focused on capitalising on its established, 
      leading positions in the large and growing frozen bakery market globally.
    

      ARYZTA Chief Executive Officer, Kevin Toland, commented:
    

      “A significantly improved capital structure will provide ARYZTA with 
      the means to continue to take the necessary steps to re-position the 
      business and deliver on our strategy. Over the medium-term, we expect to 
      generate significant cash flow which will be applied towards continued 
      net debt reduction and to resource selective growth opportunities.”
    

      The following material updates are provided in the context of ARYZTA’s 
      ongoing strategic, operational and financial developments. ARYZTA closed 
      its FY2018 on 31 July and is currently in a closed period.
    

      CAPITAL INCREASE
    

      ARYZTA has undertaken a detailed review of its capital structure with 
      the assistance of BofA Merrill Lynch, UBS and Rothschild & Co. In order 
      to create the necessary strategic and financial flexibility to implement 
      its strategy and sustainably strengthen its capital base, the Board of 
      Directors of ARYZTA plans to engage with its shareholders to raise up to 
      €800 million of capital, primarily through a rights issue with 
      pre-emptive rights for existing shareholders. The proceeds from the 
      capital increase are targeted mainly for debt reduction. BofA Merrill 
      Lynch and UBS have been appointed as Process Banks and Joint Global 
      Coordinators; Credit Suisse and JP Morgan have also been appointed as 
      Joint Global Coordinators to arrange the capital increase.
    

      CURRENT PERFORMANCE
    

      ARYZTA confirms that trading in the fourth quarter of FY2018 was in line 
      with expectations and expects a FY2018 EBITDA of between €296 and €304 
      million, in accordance with the guidance provided on 24 May 2018. 
      Furthermore, ARYZTA confirms that it was in compliance with its 
      covenants in FY2018.
    

      DELEVERAGING PLAN
    

      ARYZTA remains committed to the €1bn deleveraging target over four years 
      (prior to the announced capital raise), including at least €450 million 
      of disposal proceeds and the balance from cash flow generation as 
      communicated on 25 January 2018. ARYZTA has already made solid progress 
      with several non-core asset disposals and remains committed to the 
      disposal of its stake in Picard for which the process remains ongoing. 
      Picard continues to deliver a strong performance and through the 
      refinancing carried out since December 2017 has delivered €91m of 
      dividends to ARYZTA, supporting our FY2018 EBITDA.
    

      PROJECT RENEW
    

      The operational improvement of the business plan is underpinned by 
      Project Renew, a comprehensive set of initiatives targeting annual run 
      rate cost savings of c.€90m by FY2021, enabling a three-year cost 
      reduction of c.€200m for FY2019 to FY2021, including: operating model 
      cost reductions; procurement and supply chain initiatives; and 
      automation initiatives. Associated with realising these cost savings, 
      ARYZTA expects non-recurring expenses of approximately €150m over the 
      next 3 years.
    

      NEXT STEPS
    

      Further details on the terms and conditions of the capital increase and 
      loan amendments will be communicated in conjunction with the FY2018 
      results on 1 October 2018. The rights issue is targeted to be executed 
      in the fourth quarter of 2018, subject to approval by the shareholders 
      of ARYZTA.
    

      Conference call
    

      A conference call will take place today at 08:30 CET.
    

      Dial in numbers are: Switzerland: 031 580 0059; Ireland: 01 431 9615;
    

      USA: 1 631 510 7495; UK: 0844 5718892; International: +44 (0) 2071 
      928000.
    

      Please provide the following code: 3041068 to access the call.
    

      

        

           
        
      
      

        

          Investor Enquiries:
        
      
      

        

          Paul Meade, Communications Officer, ARYZTA AG
        
      
      

        

          Tel: +41 (0) 44 583 42 00
        
      
      

        

          

            info@aryzta.com
          
        
      
      

        

           
        
      
      

        

          Media Enquiries:
        
      
      

        

          Mark Kenny/Jonathan Neilan, FTI Consulting
        
      
      

        

          Tel: +353 1 765 0886/+353 86 231 4135
        
      
      

        

          

            mark.kenny@fticonsulting.com 
            / jonathan.neilan@fticonsulting.com
          
        
      
      

        

           
        
      
      

        

          Aloys Hirzel, Hirzel.Neef.Schmid.Counselors AG
        
      
      

        

          Tel: +41 43 344 42 42
        
      
      

        

          

            aloys.hirzel@konsulenten.ch
          
        
      
      

        

           
        
      
    

      About ARYZTA
    

      ARYZTA AG (‘ARYZTA’) is a global food business with a leadership 
      position in speciality bakery. ARYZTA is based in Zurich, Switzerland, 
      with operations in North America, South America, Europe, Asia, Australia 
      and New Zealand. ARYZTA has a primary listing on the SIX Swiss Exchange 
      and a secondary listing on the ISE Irish Exchange (SIX: ARYN, ISE: YZA).
    

      These materials may not be published, distributed or transmitted, 
      directly or indirectly, in or into the United States, Canada, Australia 
      or Japan. These materials are not an offer of securities of ARYZTA AG 
      (the “Company”), are for background purposes only and do not purport to 
      be full or complete. No reliance may be placed for any purpose on 
      the information contained in this announcement or its accuracy or 
      completeness. The information in this press release is subject to change.
    

      The securities of the Company may not be offered or sold in the 
      United States absent registration or an exemption from registration 
      under the U.S. Securities Act of 1933, as amended (the “Securities 
      Act”). The securities of the Company have not been, and will not be, 
      registered under the Securities Act or under the applicable securities 
      laws of Australia, Canada or Japan. There will be no public offer in the 
      United States. Any public offer will be made solely by means of, and on 
      the basis of, a securities prospectus which is to be published and would 
      be made available free of charge at the Company or on the Company’s 
      website.
    

      This announcement does neither constitute nor form part of (i) an 
      offer, invitation or recommendation to buy, sell or to subscribe for 
      securities of the Company nor (ii) a prospectus within the meaning of 
      applicable Swiss law (i.e. Art. 652a of the Swiss Code of Obligations or 
      Art. 27 et seq. of the SIX Swiss Exchange Listing Rules) or the 
      applicable laws of any Relevant Member State (as defined below). 
      Investors should make their decision to buy or exercise subscription 
      rights or to buy or to subscribe to shares of the Company solely based 
      on the official offering circular/prospectus which is expected to be 
      published in connection with the offering of any securities of the 
      Company.
    

      In member states of the European Economic Area (“EEA”) (each, a 
      “Relevant Member State”), this announcement and any offer if made 
      subsequently is directed only at persons who are “qualified investors” 
      within the meaning of the Prospectus Directive (“Qualified Investors”). 
      For these purposes, the expression “Prospectus Directive” means 
      Directive 2003/71/EC (and amendments thereto, including the 2010 PD 
      Amending Directive, to the extent implemented in a Relevant Member 
      State), and includes any relevant implementing measure in the Relevant 
      Member State and the expression “2010 PD Amending Directive” means 
      Directive 2010/73/EU.
    

      The distribution of this announcement may be restricted by law in 
      certain other jurisdictions and persons into whose possession any 
      document or other information referred to herein comes should inform 
      themselves about and observe any such restrictions. Any failure 
      to comply with these restrictions may constitute a violation of the 
      securities laws of any such jurisdiction.
    

      This announcement may include statements that are, or may be deemed 
      to be, “forward-looking statements”. These forward-looking 
      statements may be identified by the use of forward-looking terminology, 
      including the terms “believes”, “estimates”, “plans”, “projects”, 
      “anticipates”, “expects”, “intends”, “may”, “will” or “should” or, in 
      each case, their negative or other variations or comparable terminology, 
      or by discussions of strategy, plans, objectives, goals, future events 
      or intentions. Forward-looking statements may and often do differ 
      materially from actual results. Any forward-looking statements 
      reflect the Company’s current view with respect to future events and are 
      subject to risks relating to future events and other risks, 
      uncertainties and assumptions relating to the Company’s business, 
      results of operations, financial position, liquidity, prospects, growth 
      or strategies. Forward-looking statements speak only as of the 
      date they are made. Each of the Company, Merrill Lynch 
      International, UBS AG, Credit Suisse AG, J.P. Morgan Securities plc and 
      N M Rothschild & Sons Limited expressly disclaims any obligation or 
      undertaking to update, review or revise any forward-looking statement 
      contained in this announcement whether as a result of new information, 
      future developments or otherwise.
    

      Merrill Lynch International, UBS AG, Credit Suisse AG, J.P. Morgan 
      Securities plc and N M Rothschild & Sons Limited would be acting 
      exclusively for the Company and no-one else in connection with a 
      potential offering. They will not regard any other person as their 
      respective clients in relation to such offering and will not be 
      responsible to anyone other than the Company for providing the 
      protections afforded to their respective clients, nor for providing 
      advice in relation to the offering, the contents of this announcement or 
      any transaction, arrangement or other matter referred to herein.
    

      None of Merrill Lynch International, UBS AG, Credit Suisse AG, J.P. 
      Morgan Securities plc and N M Rothschild & Sons Limited or any of their 
      respective directors, officers, employees, advisers or agents accepts 
      any responsibility or liability whatsoever for or makes any 
      representation or warranty, express or implied, as to the truth, 
      accuracy or completeness of the information in this announcement (or 
      whether any information has been omitted from the announcement) or any 
      other information relating to the Company, its subsidiaries or 
      associated companies, whether written, oral or in a visual or electronic 
      form, and howsoever transmitted or made available or for any loss 
      howsoever arising from any use of this announcement or its contents or 
      otherwise arising in connection therewith.
    
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      Aryzta AG