Cloetta exits loss making Candyking business in Poland upon delivering Q4 results
Cloetta acquired Candyking, a supplier of pick and mix candy in the Nordic countries and the UK, about a year ago for SEK 325m ($41m).
By the end of 2017, Candyking and its subsidiaries contributed SEK 708m ($90m) to Cloetta’s consolidated revenues, according to the company’s latest Q4 2017 earnings.
However, the newly acquired brand has seen growth in all other operating markets during the period, especially Finland and Norway, said Sauvage-Nolting.
“The growth of in Candyking was 14% in the quarter, driven by a very positive development on all markets except Poland,” he said. “The integration of Candyking continues in line with plan.”
Cloetta reported its net sales for Q4 increased by SEK 276m ($35m/20.2% growth) to SEK 1,643m ($209m) compared to the same period of last year, while organic growth remained flat and changes in exchange rates accounted for a negative 0.6%.
“Cloetta’s sales in the quarter increased or were unchanged in Sweden, Finland, Norway and on the export markets, but declined in Denmark, the Netherlands, Germany and the UK,” said Sauvage-Nolting.
“The positive sales trend in Finland was driven by both pick and mix, and packaged products,” he explained. “In Denmark, sales to a large customer were down. In the Netherlands, sales were down due to fewer promotional activities.”
2017 was a ‘challenging year’
Sauvage-Nolting said 2017 was a “challenging year” for Cloetta as the fire at a Belgium factory in June caused lower production volumes, higher production cost and to some extent lost sales.
As a result, organic sales during full-year 2017 have decreased by 1.2%, according to Cloetta.
However, structural changes after Cloetta’s divested its Italian business in September last year and the acquisition of Candyking helped the company’s overall net sales increase by 13.3% in 2017, reaching SEK 5,784m ($735m) compared to SEK 5,107m ($649m) in 2016.
These two business moves have changed Cloetta’s structure “significantly,” Sauvage-Nolting said. “This enables Cloetta to focus more on driving organic growth on the Northern and Western European markets while at the same time drive synergies from the acquisition of Candyking.”