CSM B.S.N.A. earnings, sales rise in quarter

by Eric Schroeder
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DIEMEN, THE NETHERLANDS — EBITA of the Bakery Supplies North America division of CSM n.v. in the second quarter of fiscal 2012 was $41.6 million, up 16% from $35.8 million in the same period a year ago. Excluding restructuring and integration costs, EBITA in the division rose 12% to $41.6 million from $37 million. Sales in the division totaled $578.2 million, up narrowly from $575.3 million in the same period a year ago.

During the first half of fiscal 2012, EBITA at B.S.N.A. totaled $71.7 million, up 8% from $66.6 million. Excluding one-off costs, EBITA in the first half totaled $71.7 million, down 2% from $73 million. Net sales were $1,126.3 million, up 1% from $1,112.4 million.

CSM said second-quarter EBITA in B.S.N.A. benefited from the company’s frozen products and pastry ingredients business to the in-store channel.

Reported in euros, CSM said EBITA at B.S.N.A. rose 29% and sales increased 12% in the second quarter of fiscal 2012. For the first half, EBITA was up 16% while sales increased 9%.

Bakery Supplies Europe EBITA in the second quarter of fiscal 2012 was €1.9 million ($2.3 million), down 70% from €6.2 million in the same period a year ago. Sales were €275.5 million ($340 million), up 5% from €262.8 million. For the first half of fiscal 2012, EBITA fell 80% to €3.8 million ($4.7 million) while sales rose 4% to €545.9 million ($673.8 million).

The sales increase in B.S.E.U. reflected positive contribution from the acquisitions of The Cookie Man Ltd. in the United Kingdom and Promocook in France.

Overall, CSM EBITA was €37.7 million ($46.5 million) in the second quarter of fiscal 2012, up 3% from €36.6 million in the same period a year ago. Excluding one-off costs, EBITA in the most recent quarter was €41.4 million ($51.1 million), up 14% from €36.4 million. Sales were €827 million ($1,020 million), up 8% from €765.5 million. For the first half of fiscal 2012, EBITA totaled €66.7 million ($82.3 million), down 10% from €74.5 million in the same period of 2011. Sales for the first half climbed 7% to €1,625.7 million ($2,006.5 million) from €1,525.3 million.

“As I mentioned in February, the acceleration in both the increase in raw material costs and the decline in consumer demand in the course of 2011, meant that the comparison between the first half of 2012 and the first half of 2011 would be tough,” said Gerard Hoetmer, chief executive officer of CSM. “I am therefore pleased that despite the ongoing difficult market situation we have been able to improve on our EBITA of the second quarter of 2011. This has been the result of a combination of margin and cost improvements supported by currency effects. Initiatives are being deployed within our organization to grow against the current market trend. So far our efforts have led to a lessening of the negative volume trend of the previous quarters, however, not yet to absolute volume growth.

“We were successful in fully compensating higher raw materials costs in the second quarter. As we have covered most of our raw materials for the remainder of 2012, we are confident that this increased margin will also benefit our second half 2012 results.

“In the second half of 2011 we announced Relevance (a cost-reduction program), aiming to save €30 million by 2012, increasing to a total of €50 million by 2013. At first quarter 2012 we indicated that the savings for 2012 would surpass the €30 million mark, and I can now confirm that we are well on our way to realizing these targets. The first half-year savings amounted to €19 million.

Mr. Hoetmer said CSM continues to work on the necessary preparations for the development of CSM into a bio-based ingredients company and the divestment of its Bakery Supplies businesses. The company expects to make significant progress by early 2013.

“I am proud of the way our people are responding to this change, with a continued emphasis on serving our customers and driving results,” he said. “It is encouraging to see that our Bakery Products and Bakemark businesses have been improving their EBITA over the last two quarters. The B.S.E.U. EBITA for the first half 2012 was still lower than in 2011, although the shortfall was much smaller in the second quarter compared to the first quarter. Future CSM, consisting of Purac and Caravan Ingredients, continued to record a satisfactory performance in the light of the current economic climate.”

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