Scandinavian confectioner Cloetta recorded SEK 66m ($7.7m) net profit in Q2 following declines in the previous quarter that forced it to axe 30 jobs in Italy.
In Q2 results posted today, the company reported growth in its home market Sweden and its recent acquisitions of the Jelly Bean Factory and Nutisal helped Cloetta increase Q2 sales by 3.4% to SEK 1.3bn ($148m).
Strengthening position in the declining Dutch market
The firm announced it had acquired a 100% stake in Locawo B.V. (Lonka) – a Dutch company producing and selling fudge, nougat and chocolate.
“Lonka is a well-known brand that will significantly strengthen Cloetta’s positon in the Netherlands,” said Cloetta’s incoming CEO David Nuutinen.
Cloetta experienced sales declines in the Netherlands in Q2 as well as in Italy and Norway. Cloetta’s current president and CEO Bengt Baron, who will leave after six years at the helm, said: “The [overall] confectionery market showed positive development or was unchanged in all markets except in the Netherlands, where it declined.”
Cloetta hopes Lonka will help it return to growth in the Netherlands.
Dutch confectioner Lonka, founded in 1920, specializes in fudge, nougat and chocolate products, but is also active in pick & mix and contract manufacturing. It has two factories in the Netherlands and employs 130 people. The firm has annual sales of around SEK 300m ($35m) with around 50% of sales coming in the Dutch market. Approximately half of sales are branded and 50% from pick & mix and contract manufacturing.
Cloetta already has a presence in the Netherlands, but the acquisition marks its entry into the domestic chocolate market.