European confectioner Cloetta saw its losses widen in 2012 thanks to the merger that formed the company last year but it reported improved profits in the fourth quarter.
In the 12 months to the end of December, the company made a net loss of SEK73m (US$11.5m) compared to a net loss of SEK68m last year. Operating profit was down 65.9% to SEK125m, the company reported today (15 February).
The losses were a result of restructuring costs following Cloetta's merger last year with former Dutch confectioner Leaf International.
Annual sales increased 4.3% to SEK4.86bn. However, underlying net sales, which excludes foreign exchange, businesses offloaded since the merger and the financial performance of the old Cloetta, fell 4.1% to SEK5.08bn.
The company said the confectionery market in Italy shrank in 2012. The sector in the Netherlands, another key market, was "sluggish".
However, Cloetta CEO Bengt Baron pointed to higher underlying EBITA in the fourth quarter as "a further step towards realising our strategic ambition". The company benefited from synergies from the merger.
Baron said ongoing changes to Cloetta's supply chain was still leading to "short-term costs" but added: "The fourth quarter, like the third quarter, was a step in the right direction. The synergies from the merger are being realised and the supply chain restructuring are proceeding as planned."
Cloetta AB: Year-End Report, October-December 2012
STOCKHOLM--(BUSINESS WIRE)--Regulatory News:
Cloetta AB (STO:CLAB):
Net sales for the quarter amounted to SEK 1,404m (1,371). Operating profit was SEK 82m (84).
Underlying net sales decreased by 7.4 per cent, primarily caused by weak market conditions.
Items affecting comparability amounted to SEK –122m (–116), and consisted mainly of costs related to factory restructurings and costs arising from integration activities.
Cash flow from operating activities improved to SEK 147m (45) as a result of the positive impact of cash flow from changes in working capital.
Underlying EBITA improved to SEK 208m (202). The increase is a result of the implemented price increases, but also the realisation of synergies from the merger.
The integration process is proceeding as planned and has been largely completed.
The factory restructurings are proceeding according to plan. The factory in Alingsås, Sweden was closed during the quarter.
The number of class A shares have decreased by 1,938,386 and the number of class B shares has increased by the same number, whereby the number of votes in the company has decreased by 17,445,474 votes. The change in the number of shares and votes is a result of AB Malfors Promotor’s request for conversion of class A shares to class B shares.
SEK 90m of the debt has been amortised in the quarter. Total amortization for the year was SEK 358m. No dividend payout proposed in line with the financial strategy where focus continues to be on reducing net debt to app 2.5 x EBITDA.
About Cloetta
Cloetta, founded in 1862, is a leading confectionary company in the Nordic region, the Netherlands, and Italy. In total, Cloetta products are sold in more than 50 countries worldwide. Cloetta owns some of the strongest brands on the market, such as Läkerol, Cloetta, Jenkki, Kexchoklad, Malaco, Sportlife, Saila, Red Band and Sperlari. Cloetta has 11 production units in six countries. Cloetta’s class B-shares are traded on NASDAQ OMX Stockholm.
