CSM: reports sales growth of 2,9 percent for Q1/2009

Diemen / NL. (csm) CSM N.V., the world´s leading Bakery Supplies and Lactic Acid business, reports a sales growth of 2,9 percent for Q1/2009. EBITA of 20,1 million EUR in the first quarter was impacted by a decline in volumes of 4,2 percent, a consequence of the current negative economic climate. Continuing actions to reduce cost and working capital will provide increasing support to results in the remainder of the year. Summary:

• Sales were 636,1 million EUR compared to 618,2 million EUR in Q1/2008. Currency effects on balance had a positive impact of 32,7 million EUR, due to the stronger US-Dollar mitigated by the weaker pound sterling. Autonomous sales growth was 2,8 percent negative, caused by lower sales volumes.
• Volumes in Bakery Supplies were 3,8 percent lower than in Q1/2008. Sales were lower in all segments of the business, with the more luxury pastry items particularly affected.
• Purac´s volumes were down 10,4 percent compared with Q1/2008. Approximately 75 percent of this decline occurred in the potassium-based products, following the supply interruption in the 2nd half of last year. We have been regaining some of the potassium-based business through the first quarter.
• EBITA was 20,1 million EUR compared with 32,5 million EUR Q1/2008 (at constant currency 17,9 million EUR versus 32,5 million EUR).
• EBITA was negatively impacted by our decision to reduce finished goods inventories, which fell by 23,8 million EUR. CSM estimates the negative impact to EBITA to be approximately six million EUR.
• Pressure to reduce selling prices at Bakery Supplies led to slightly lower pricing and expensive forward raw material contracts had to be absorbed in Q1/2009. This led to a decrease in return on sales, in an order of magnitude of one percentage point, compared with the last quarter of 2008.
• US-based bakery organization Brill exceeded expectations, profiting from increased efficiencies, and the German bakery business succeeded in maintaining volumes despite the difficult economic conditions.