CSM: annual profits could rise by as much as 15 percent

Diemen / NL. (csm) CSM N.V., the world´s leading Bakery Supplies and Lactic Acid business, substantially improved Q3/2009 EBITA compared to last year. The increase was the result of more stable sales volumes in combination with a recovery in margins and strict expense control, the company said in a Trading Update. Key facts:

• Sales for the third quarter were 634,5 million EUR compared with 639,5 million EUR in 2008; organic growth was 2,2 percent negative due to a limited reduction in sales volume and slightly lower average pricing. Currency effects had a positive impact of 9,0 million EUR due to the stronger US-Dollar.
• EBITA before exceptional items in the third quarter amounted to 47,6 million EUR; up 20,8 million EUR (78 percent) compared with the same period in 2008. The main contributors to the recovery of our margins were the current raw material contracts, cost savings as well as continuing improvements at H.C. Brill and our German Bakery operation. Currency effects positively impacted EBITA by 1,9 million EUR.

Gerard Hoetmer, CEO of CSM: «I am proud that in line with our forecast, we have delivered clearly improved EBITA results in Q3/2009 versus Q3/2008. The strong improvement of 20,8 million EUR shows that our organization has successfully adapted to the recessionary environment that started to severely impact our business around July of last year. Today, despite the continuing pressure in our markets, we see a trend of stabilization in volumes sold. The continued investments in our organization in the areas of marketing and innovation are gradually starting to pay off, further strengthening our market position. This quarter´s development in raw material prices was less volatile than in previous periods. This allowed us to recover margins. However, continued attention will have to be paid to our procurement positions and selling prices especially as the first signs of raw material price increases are seen».