CSM bakery profits take a hit

21 April, 2009

Bakery products supplier CSM’s profits have been hit due to pressure to reduce selling prices, according to its first-quarter trading update.

Netherlands-based CSM, which owns BakeMark UK, saw volumes in bakery supplies down 3.8% compared to Q1 of 2008, with “the more luxury pastry items particularly affected”.

Sales in its Bakery Supplies Europe division stood at €249.2m compared to €264.6m for the comparable 2008 period. EBITDA before exceptionals was €6.3m compared to €12.8m in 2008.

The statement released from the company noted that the pressure to reduce selling prices in bakery supplies led to a decrease in return on sales.

The company saw overall sales growth of 2.9% for its bakery supplies and lactic acid businesses. Profit before deductions stood at €20.1m, impacted by a decline in volumes of 4.2%.

Gerard Hoetmer, chief executive officer at CSM, said the firm is focused on generating cash, which has resulted in a number of cost-cutting initiatives, including the temporary suspension of a number of production lines.





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