Aryzta CEO Owen Killian has stepped down following a series of financial issues at the Irish-Swiss food group. Swiss food maker Aryzta announced a record decline in shares with earnings set to decrease 20% this year, the latest in a long line of problems at the firm which says it has been struggling with the impact of Brexit, as well as taking a financial hit after introducing its Otis Spunkmeyer snacks to the US market. 

A significant component of the reduced revenue can be explained by revenue losses at the Cloverhill facility in Q2 and mitigating initiatives taking longer than anticipated to be realized, according to Aryzta. While the under performance in North America is due to reduced revenue and higher than expected labor inflation costs. 

Aryzta reported 34% of its North American revenue as branded as of July 2016. Its strategy is to grow this further, with significant growth expected through the rollout of Otis Spunkmeyer snack cakes brands, which involves an annual investment of approximately €10million (US$10.5million) to support the brand. 

Underlying earnings per share fell approximately 20% in the five months through December.  Aryzta expects profit in the year that ends in July to show a similar impact. 

After some speculation, Aryzta CEO Owen Killian has quit. But before he resigned, he made a statement in relation to the latest financial performance. 

“The performance in the current period is both unexpected and extremely disappointing. Cloverhill was acquired with the objective of unlocking the Otis Spunkmeyer brand into retail. ARYZTA’s brand investment strategy in Otis Spunkmeyer will in time replac the co-pack volumes and create a more predictable and higher margin business,” he said.

“The Capital Markets day in October 2016 focused attention on the go-to-market strategy and profiled the capability of the business and the executive teams in North America. Aryzta North America is well invested and structured to support a significantly larger business very effectively and efficiently.”

“It has best-in-class processes and technology, and is capable of further initiatives to develop its potential. We have initiated price increases to address United States labor inflation, which is significant across the business. We are also investing in upskilling, training and development to ensure Aryzta becomes an employer of choice in what is becoming a highly competitive labor market in which there are significant skills shortages in many locations. 

“We know that it will take a recovery followed by a period of sustainable growth to re-establish investor confidence. It will also require an alignment with our key shareholders in terms of our future strategy and capital allocation. A substantial element of this significant setback is timing related. The Aryzta Board and management teams are committed to returning the business to solid performance and growth and dealing with the challenges presented.”

Alongside Killian, chief financial officer Patrick McEniff and JohnYamin, the chief executive of Aryzta’s Americas business, are also believed to have resigned. They will step down at the end of the current financial year.

There is also understood to be three new appointments.