Financials

Cloetta sales dented by Swedish pick & mix declines in Q1

23-Apr-2017 - Last updated on 24-Apr-2017 at 11:51 GMT

Sweden pick & mix sales drop, but Cloetta to finalize deal for pick & mix supplier Candyking later this month. Photo: Cloetta.

Related tags European union Sweden Finland

Scandinavian confectioner Cloetta has reported a slight dip in first quarter sales driven by declines in its Swedish pick & mix business.

In its earnings release on Friday, it also said a previously announced $37m deal to acquire fellow Swedish firm Candyking will be completed on April 28, 2017, after it received approval from competition authorities this month.

Cloetta’s sales for January to March 2017 fell -0.8% to SEK 1,347m ($153m), representing an organic growth decline of -2%, said the company.

Profit for the period was up 34.1% to SEK 59m ($6.7m).

Pick & Mix in Sweden

Cloetta president and CEO Henri de Sauvage-Nolting said the company’s sales grew or was unchanged in export markets and in Finland, the Netherlands, UK, Denmark, Norway.

“The increase was mainly offset by a decline in sales in Sweden and in contract manufacturing,” he said.

“In Sweden, sales only declined within pick & mix, mainly due to the Easter effect, but also from a tough comparator when new pick & mix concepts were introduced in the same quarter last year.”

Finland’s scrapped confectionery tax boosts sales

He added: “In Finland, sales increased driven by the abolition of the confectionery tax and in the Netherlands sales increased within candy.”

Finland abolished an excise tax on confectionery at the start of 2017 after the European Commission said the levy may violate EU state aid laws.

Candyking acquisition

Cloetta will later this month finalize a deal to acquire pick & mix supplier Candyking, which operates in the Nordic countries and the UK.

“The synergies are expected to be gradually realized during the years 2017–2020. In addition, the acquisition will also strengthen our position within natural snacks through the Parrots brand,” said De Sauvage-Nolting.

Italian business under review

Cloetta said in its earnings release it is still reviewing the future of Cloetta Italy.

Cloetta said in January that sales in Cloetta Italy had declined in recent years in a difficult economic environment.

“The aim is to improve growth and margins in Cloetta and could potentially include a divestment of the Italian business,” it said on Friday last week.

Cloetta Italy operates four factories - Cremona, San Pietro, Gordona and Silvi Marina – and employs 450 people, including sales & marketing staff.

The company sells the brands Sperlari (nougat and candy), Galatine (sugar confectionery), Dietor (sweetener), Dietorelle (sugar-free candy) and Saila (pastilles) in Italy.