CSM B.S.N.A. unit performs well in tough market

by Eric Schroeder
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DIEMEN, THE NETHERLANDS — EBITA of the Bakery Supplies North America division of CSM n.v. in the third quarter of fiscal 2012 was $32.5 million, up 37% from $23.7 million in the same period a year ago.

Excluding restructuring and integration costs, EBITA in the division rose 36% to $36.1 million from $26.6 million. Sales in the division totaled $562.6 million, down 2% from $572.3 million in the same period a year ago.

During the first nine months of fiscal 2012, EBITA at B.S.N.A. totaled $104.2 million, up 15% from $90.3 million. Excluding one-off costs, EBITA in the first nine months totaled $107.8 million, up 8% from $99.6 million. Net sales were $1,688.9 million, up narrowly from $1,684.7 million.

Reported in euros, CSM said EBITA at B.S.N.A. rose 56% and sales increased 11% in the third quarter of fiscal 2012. For the first nine months, EBITA was up 27% while sales increased 10%.

Gerard Hoetmer, chief executive officer, said he was “especially pleased” with the development of results within the company’s North American Bakery Supplies businesses.

“Bakery Products, Caravan Ingredients and BakeMark were all able to improve their EBITA in a market impacted by lower consumer spending,” he said.

Bakery Supplies Europe EBITA in the third quarter of fiscal 2012 was €3.6 million ($4.7 million), down 49% from €7 million in the same period a year ago. Sales were €277.5 million ($359.2 million), up from €276.7 million. For the first nine months of fiscal 2012, EBITA fell 71% to €7.4 million ($9.6 million) while sales rose 2% to €823.4 million ($1,065.7 million).

“Our sales are in line with the trend in the market with volume decreases in the artisan and industry channels whereas out-of-home and in-store bakery increased,” CSM said. “The lower volume reflected a combination of a continued tough market environment and a non-recurring push in targeted promotional activities in the artisan channel in September 2011.”

Overall, CSM EBITA was €20.9 million ($27.1 million) in the third quarter of fiscal 2012, down 26% from €28.3 million in the same period a year ago. Excluding one-off costs, EBITA in the most recent quarter was €40.4 million ($52.3 million), up 33% from €30.3 million. Sales were €834.2 million ($1,079.7 million), up 6% from €784.8 million. For the first nine months of fiscal 2012, EBITA totaled €87.6 million ($113.4 million), down 15% from €102.8 million in the same period of 2011. Sales for the first nine months climbed 6% to €2,459.9 million ($3,183.9 million) from €2,310.1 million.

“Despite the ongoing challenging trading environment I am pleased we have achieved a further recovery of the underlying results of our company,” Mr. Hoetmer said. “Based on improved margins and the effects of our improvement program Relevance, our EBITA excluding one-off costs in the third quarter of 2012 increased compared to the third quarter of 2011.”

In Europe, the consumer trend to switch to lower priced sales channels continued in the bakery market, impacting CSM’s artisan business, Mr. Hoetmer said.

“In line with their strategy, Bakery Supplies Europe is successfully targeting growth in the out-of-home and in-store bakery channels, while sales in Continental Europe benefited from the experience and know-how of our U.K. and U.S. activities in these areas,” he said. ”However, this growth could not mitigate the impact of declining volumes in the artisan market, where our objective is to further improve our market shares.”

Mr. Hoetmer described the performance of the “future CSM,” which will consist of Purac and Caravan Ingredients, as “satisfactory” against a background of ongoing tough market situation.

“EBITA at both Purac and Caravan Ingredients increased in Q3 compared to Q3 2011,” he said. “We have covered most of our raw materials for the remainder of 2012. We will continue to respond to changing consumer preferences towards lower cost/better value products. Our Relevance restructuring program is on track and is contributing to the improved results. As announced previously, savings in full year 2012 will exceed the original target of €30 million of savings in 2012.”

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