Scandinavian confectioner Cloetta has posted a modest rise in fourth quarter sales and says it hopes to spend future money it generates on extinguishing its debts and acquiring complementary companies.
The firm still has a net debt of SEK 3.2bn ($501m) after its $1bn merger with Dutch confectioner Leaf in February 2012.
Cloetta paid off SEK 68m ($10.6m) of its bank loans during Q4 and stated its intentions for future investments.
Eyeing further acquisitions
“Our aim is to use future cash flow for continued amortization of our bank loans, while at the same time allowing for complementary acquisitions,” said president and CEO Bengt Baron.
In December last year, Cloetta acquired dry roasted nut firm Nutuisal for around $63m, broadening its portfolio with a snacks addition. Earlier in the year the firm also acquired FTF Sweets UK, owner of the British candy brand Goody Good Stuff.
“Continued sales growth and the acquisition of Nutisal demonstrate that Cloetta is able to grow both organically and through acquisitions,” said Baron.
Markets pick up
Scandinavian confectioner Cloetta saw a pickup in its operating markets in Q4 as its net sales for the quarter grew 2.6% to SEK 1.4bn ($224m) and net profit rose 20% to SEK 186m ($28.9m).
“The confectionery market continued to show a slightly positive trend in most markets. Following a weak third quarter, the Finnish confectionery market recovered in the fourth quarter. In Italy, some recovery was noted and the market stabilized. The Netherlands continued its weak performance, driven by a declining chewing gum market,” said Baron.
For the full year, Cloetta recorded flat net sales of SEK 4.9bn ($759m) and net profit after tax of SEK 264m ($40.9m), which followed a net loss the previous year.
During Q4, Cloetta sales grew in Sweden driven by chocolate and the launch of Polly bilar. In Finland, several product launches also contributed to sales development. But the company’s Dutch sales were flat and it posted a decline in Norway.
Since the merger with Leaf, Cloetta has resurrected its business. In the first quarter of 2014, it sold factories in Gävle, Sweden and Aura, Finland in the first quarter of 2014, as previously announced. Production will move to existing factories in Ljungsbro, Sweden, and Levice, Slovakia.