DIEMEN, THE NETHERLANDS — The Bakery Supplies North America division of CSM n.v. posted lower EBITA in the year ended Dec. 31, 2008.
EBITA of Bakery Supplies North America was $103.6 million, down from $104.7 million in fiscal 2007. Sales were $1,735.7 million, up 14% from $1,528 million. Reported in Euros, CSM said EBITA fell 7% while sales rose 6%.
Bakery Supplies Europe EBITA was €37.8 million ($48.2 million) in the period, down 46% from €70 million in fiscal 2007. Sales were €1,092.5 million ($1,393.2 million), up 3%.
Commenting on fiscal 2008 results in North America, CSM said the changing market situation, and specifically fluctuating raw material prices and the economic downturn weighed on results. CSM said its raw material costs increased by approximately 19% during the year, primarily for soy oil, flour and eggs. In addition, the recovery of the H.C. Brill Division and the expansion of CSM into the out-of-home market were important developments in 2008, the company said.
"The subprime crisis in the United States and the financial crisis that followed, had a severe impact on the U.S. economy," CSM said. "Even though CSM largely satisfies basic needs as a food product supplier, we felt an impact on our sales. Customers started using less of our ingredients, aiming to bring down the costs of their products and minimize their inventories in the supply chain as a result of an increased focus on cash. Products that suffered most were our premium, highest quality products."
While 2007 was a period of substantial declines for the company’s H.C. Brill unit, CSM said 2008 was a period of reorganization that has the division primed for growth in 2009. An important final step will be made in the first half of 2009 to increase operational efficiency through the implementation of a new ERP system similar to that of sister company Caravan Ingredients.
"We anticipate that the changes in structure, people and systems will make Brill a stronger player in the in-store supermarket segment," CSM said. "We will see benefits from this turnaround in 2009."
Overall, CSM EBITA before exceptional items was €133.1 million ($170 million) in fiscal 2008, down 13% from €153.7 million in fiscal 2007. Sales were €2,599.3 million, up 5%.