Dutch bakery firm CSM records profit slide21 February 2012Dutch bakery ingredients firm CSM will make further redundancies in the wake of a 30% slump in 2011 profits. CSM will make around 100 redundancies after recording EBITA of €150.8m – down around one-third on 2010. Whilst CSM did report a 4.1% increase in net sales to €3.1 billion, the firm’s margins were hit by high raw material costs and competition from lower priced products. Europe proved to be CSM’s most challenging market with profits down 38% to €61.8m. The company attributed the poor European performance to cost-conscious consumers switching from artisan bakery products to bake in-store and out-of-home products. The trend also affected business in North America. "2011 was a very challenging year for us. We faced substantial raw material cost inflation in a difficult consumer environment impacting our volumes in an intensified competitive landscape,” said Gerard Hoetmer, CSM’s chief executive. “This put our 2011 results under severe pressure and led to a disappointing EBITA level.” CSM has undertaken a comprehensive business review which has already resulted in 400 job losses worldwide. The Amsterdam-based firm is targeting savings of €50 million by 2013 and has put its faith in more profitable budget and frozen bakery products to restore growth. “We are committed to turning the challenges we face into opportunities by strengthening our competitiveness, lowering our cost base, improving our agility and making clear choices how we allocate our resources,” added Hoetman. Hoetman said that the likelihood of high raw material costs and weak consumer confidence in 2012 would make for a “very challenging” year. | |
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