Travel products boost profits for Cloetta but lower sales announced in end of year results
However, company sales had declined from the same quarter last year due to competition from grocery retailers offering similar products.
The results come at the end of the financial year in Sweden where the firm has its operational base.
Rise in profits
Cloetta was able to improve its profit margins for the final quarter of this year compared to last by reducing a 6m SEK loss by 6m SEK (€695k) taking its operating profit/loss to zero.
Company CFO Kent Sandin told ConfectioneryNews.com that profit had been driven by Cloetta’s two top brands Kexchoklad and Polly, and particularly its limited edition summer offering.
He said that travel bags had seen the most significant upward trend and also the company’s common chocolate bags in Sweden and Norway has performed well.
Fall in sales
Net sales were down 9% on the same quarter last year from 213m SEK (€23m) in 2010 to 193m (€21m) this year. For the entire year, the company saw a 7% drop in sales.
Sales in Sweden were down for the quarter, partly due to reduced volumes from the firm’s Wedding Series from the same period last year.
Sales for Cloetta’s two largest brands, Kexchoklad and Polly, were on par the same period of last year and its recently launched Tarragona bars and Christmas product Juleskum has helped sales further.
Cloetta CEO Curt Petri said: “The past year has been characterised by unusually large fluctuations. Our earnings have been negatively affected by aggressive competition in a grocery retail trade that saw an overall decrease in volume during 2011, but also due to lower income from products manufactured on contract.”
He said the firm had introduced price increases in a bid to further improve profits and focus on areas where Cloetta are market leaders, particularly its chocolate bar Kexchoklad, chocolate bags like Polly and seasonal products such as Juleskum.
Sandin added that price increases were introduced mostly due to increased prices for raw materials, such as cocoa.
