Excluding special costs, CSM bakery unit EBITA up
August 11, 2010
by Eric Schroeder
DIEMEN, THE NETHERLANDS — EBITA of the Bakery Supplies North America division of CSM n.v. in the second quarter of fiscal 2010 was $39.6 million, down narrowly from $39.9 million in the second quarter last year.
Excluding the integration and acquisition costs related to the March 19 acquisition of U.S. premium bakery products manufacturer Best Brands, EBITA in the division rose 13% to $45.1 million from $39.9 million.
Sales in the division totaled $547.9 million, up 32% from $415.5 million.
For the first half of fiscal 2010, EBITA at Bakery Supplies North America totaled $62.1 million, up from $61 million. Excluding costs related to Best Brands, EBITA in the first half totaled $76.1 million, up 25% from $61 million. Net sales were $962.2 million, up from $807.3 million.
Reported in euros, CSM said EBITA at Bakery Supplies North America rose 3% and sales were up 39% in the second quarter. For the first half, EBITA was up 2% and sales rose 19%.
Bakery Supplies Europe EBITA was €13.8 million ($17.8 million) in the period, up 18% from €11.7 million in the second quarter last year. Sales were €244.1 million ($314.3 million), down 3%. For the first half, EBITA rose 68% to €30.2 million ($38.9 million) while sales fell 2% to €491.4 million ($632.6 million).
Overall, CSM EBITA was €51.4 million ($66.2 million) in the second quarter, up 27% from €40.6 million in the second quarter last year. Excluding costs related to Best Brands, EBITA in the quarter was €55.8 million ($71.8 million), up from €40.6 million. Sales were €771.7 million ($993.8 million), up 19%. For the first half, EBITA totaled €91.9 million ($118.3 million), up 51% from the same period of 2009. Sales for the first half climbed 10% to €1,415.8 million ($1,823.8 million) from €1,283.7 million.
“We are proud to see, in line with our expectations, our businesses continuing their positive underlying profit trend during the second quarter,” said Gerard Hoetmer, chief executive officer. “Purac continued its strong ongoing performance showing substantial organic growth and contributing strongly to a more than doubled EBITA. Although the markets of our Bakery Supplies activities were impacted by volatile consumer behavior, our bakery supplies activities improved EBITA as a result of good margin and cost management.
“In Bakery Supplies, growth in core countries such as the U.K. and Germany was not enough to compensate for declining sales in Southern and Eastern European countries. Maintaining our profitability in those countries whose economies are severely hit is our main objective. Innovations are essential for the future. We see it as recognition of our continued investments that our U.S. ingredient business Caravan has received the prestigious I.F.T. food innovation award.”
Mr. Hoetmer said the integration of Best Brands is progressing “according to plan.”
“The two merged businesses continue their operations under the name of CSM Bakery Products North America, which further leverages the commercial exposure of CSM being the leader in its industry,” he said. “The progress of our integration plan strengthened our confidence that we will certainly realize the communicated savings. In addition, during the integration process our belief is reinforced that the new entity will have an additional organic growth opportunity from its enhanced product and client offering. This will result in additional profitable sales opportunities, underpinning our ambition to grow our sales at 1% to 2% above market growth.”
Within the company’s Purace unit, Mr. Hoetmer said CSM saw strong performance in volume development combined with good margin management.
“Purac’s innovation pipeline is well developed, anticipating clear trends such as ‘clean label preservation solutions’ and ‘food safety,’” he said. “Purac successfully launched new products in these areas, which in combination with recovering markets, for example the chemical industry, boosted volume developments.”