H.C. Brill performance weighs on CSM Bakery results

by Eric Schroeder
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DIEMEN, THE NETHERLANDS — Despite sluggish results at H.C. Brill that weighed on operating results at CSM Bakery Supplies North America in the first half of fiscal 2008, the company’s parent company CSM n.v. remains optimistic that the right steps have been taken to improve the situation. Operating results in the first half ended June 30 fell 12% to €30.2 million ($45.2 million) from €34.3 million in the same period a year ago. Net sales in the first half totaled €553.3 million ($826.4 million), up 2% from €544 million in the same period a year ago.

CSM said the improvement in sales reflects good progress made in raising prices to offset higher raw material costs.

"This major achievement has been the primary focus of our sales organization," CSM said. "Although the U.S. market has been showing signs of decreasing consumption of some ingredients and finished products, we have managed to compensate this trend by increasing our market share based on our solid market position and successful innovations."

CSM said EBITDA for Bakery Supplies North America for the first half was €31.8 million ($47.5 million), down from €35.8 million in the same period a year ago. The company attributed the decline to lower results at H.C. Brill, the division of CSM active in bakery ingredients and frozen products for in-store and away-from-home markets.

"We have taken substantial measures to improve the situation at Brill," the company said. "We managed to improve service levels to our customers, we increased the efficiency of our supply chain organization and lowered our overhead costs."

CSM said it is "positive" about the developments at Brill and expects EBITDA in the second half of the year to be "substantially better" than in the first half of 2008.

CSM said savings generated by its 3-S Program amounted to €110 million in the first half, up from €85 million in fiscal 2007.

CSM n.v., based in Diemen, companywide reported sales from continued operations of €1,247.2 million ($1,863 million) for the first half of fiscal 2008, an increase of 3% from €1,206.5 million a year ago. Operating results before exceptional items eased 3% to €65.4 million ($97.7 million) from €67.5 million. After figuring in exceptional items, operating results fell 6% to €55 million from €58.8 million.

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