Cloetta profits grow in spite of weak markets
Company profits (underlying EBIT) grew 49% to SEK 109m ($16.6m) mainly due to synergies from its acquisition of Leaf last year, results released today showed.
However, the firm’s sales fell 4.1% during the quarter to SEK 1.1bn ($172.7m).
‘Weak’ markets
Cloetta CEO Bengt Baron said: “The confectionery market remained relatively weak during the quarter, especially In Italy, Denmark and the Netherlands, but Finland also lost momentum in the quarter in the face of weak economic development with a falling GDP.
In most other markets, the confectionery market showed a slight positive trend.”
The company stopped selling seasonal foam product ‘Juliskum’ during the quarter, which affected sales in Cloetta’s home market Sweden.
Baron said that Danish sales were harmed by unresolved negotiations with an unnamed major customer and as Danes continued to cross borders to buy confectionery, which has become expensive due to domestic taxes.
Cloetta re-launched fruit confection brand Dietorelle in Italy during the period, which helped sales in the market, but the overall picture in Italy remains weak, said Baron.
Restructuring plans
Cloetta previously announced that it would close its factory in Aura, Finland and its Gävle and Alingsås sites in Sweden. Capacity has started to move to existing factories in Levice, Slovakia and Ljungsbro, Sweden.
The move helped the company’s profits during the quarter as it aims for an EBIT margin of at least 14% by the time the reorganization is complete in the next three quarters.
During Q2, Cloetta acquired FTF Sweets Ltd which owns the brand Goody Good Stuff. See HERE.
