Cloetta posts Q1 sales growth driven by packaged branded business

The Swedish candy maker said Candyking accounted for 24.5% of its quarterly growth, while its organic growth was 1.1%.

“The organic sales growth [especially in Sweden, Finland, the Netherlands, Denmark and Germany] was driven by Cloetta’s packaged branded business, which grew by 2.4%,”​ said the company.

“The robust growth for both packaged branded products and pick and mix in Sweden was driven by better in-store presence for our packaged business and the Easter sales for pick and mix, which was partly neutralized by the loss of the major Coop pick and mix contract that was gradually discontinued during the quarter,”​ Cloetta noted.

It added, “sales in Denmark were positively affected by increased listing for our brands business and continued growth for pick and mix, as all existing Candyking pick and mix contracts in this market have now been renewed.”​

However, Cloetta saw declining sales in Norway, the UK and other international markets in Q1.

“In Norway, sales were down substantially, particularly in pick and mix, due to the increased sugar tax and the fact that the grocery retail trade decided not to conduct any Easter campaigns,”​ it said.

Raising prices in Sweden

Cloetta’s operating profit increased to SEK 166m ($19m) in Q1 this year from SEK 97m ($11m) in the prior year, driven by “growth in many markets, effective cost control and higher production volumes,”​ said Henri de Sauvage-Nolting, the company’s president and CEO.

“The weakening of the Swedish krona has some negative impact in the quarter, and given the recent steep drop in the Swedish krona rate, we will need to raise prices in Sweden to mitigate these effects,”​ he noted.

“However, it will take some time before we are able to implement the price increases,”​ added Sauvage-Nolting.

The integration of Candyking

Cloetta plans to implement its ERP (Enterprise Resource Planning) system on Candyking to boost the business unit’s efficiency in Q2 this year.

Cloetta acquired Candyking​​ about a year ago, and said the integration of the Nordic confectionery company is in line with its plan.

“The various Cloetta and Candyking units will have started to work as a single joint organization, with integrated sales and merchandising forces,”​ said Sauvage-Nolting.

“For 2018, my main focus is on driving growth and costs down… [and we’ll] continue expanding our branded packaged business,” ​he said.