ARYZTA repays expensive hybrid bond!

The baked goods group ARYZTA is doing well! As we have already informed you, the prospering company intends to repay the outstanding hybrid bond in the amount of CHF 325.4 million. Interest payments on the bond were made quarterly and were recently well above the "expensive" 7%.In future, the repayment will lead to significant savings; in mathematical terms, it can be clearly assumed that a double-digit million amount in interest costs should be eliminated in the coming year. ARYZTA has now confirmed the full repayment as of October 25, 2024, which will be financed through a combination of cash and drawdowns under the new revolving credit facility, which was concluded in August 2024. Including this repayment, ARYZTA has financed more than EUR 880 million of hybrid capital and the deferred and compounded interest through free cash flow over the 2021-24 period. The important net debt should now be reduced to 2.9 times EBITDA and make ARYZTA investable again for certain investors.

ARYZTA has definitely found its way back onto the road to success in recent years and has been transformed from a restructuring case into a solid company with a clear focus (innovation, debt, costs, etc.). This helps both growth and profitability.In addition, the optimization potential of CEO and Chairman Urs Jordi has probably not yet been fully exhausted. These improvements have not gone unnoticed on the stock market, although the share still has some room for improvement. The baked goods group is increasingly becoming a benchmark in the food sector and can even outperform the competition with more attractive values. It therefore comes as no surprise that Vontobel has upgraded its rating from "Hold" to "Buy" and raised its target price from CHF 1.65 to CHF 2.30. Our confidence in ARYZTA remains unbroken! Should the share even fall below CHF 1.60, we will consider adding to the stock! Target price: CHF 1.85!