CSM: Costs hit bakery supplier in second half 2007

Amsterdam / NL. (csm) According to Dutch food group CSM NV the benefits of the restructuring program became more visible in the second half of 2007, allowing CSM to overcome difficult market conditions. In particular, the impact on results from the rise in raw material costs was lower than CSM had indicated in October 2007, reflecting CSM´s success in increasing prices in both Europe and North America.

EBITA was affected by the unfavorable US Dollar rate, a sharp rise in raw material costs and an incidental disappointing result at one of the companies of Bakery Supplies North America. The implementation of the 3-S efficiency program remains on course and will deliver savings of minimal 110 million Euro in 2008. CSM reiterates its financial targets for 2008 and 2009, as communicated in October 2007. Highlights in 2007:

• Net sales from continuing operations increased from 2.421 million EUR to 2.486 million EUR (at constant exchange rates: 2.596 million EUR, up 7,2 percent). Autonomous net sales growth amounted to 4,8 percent – composed of 1,9 percent in the first half year and 7,9 percent in the second half of 2007.
• EBITA from continuing operations before exceptional items was 154 million EUR (2006: 157 million EUR), down 2,1 percent. EBITA was negatively affected by 9,0 million EUR translation currency effects.
• PURAC´s revised worldwide production strategy led to fixed asset impairments of 23,4 million EUR at PURAC Brazil and of 43,2 million EUR in connection with the intended sale and discontinuation of operations in Ter Apelkanaal (the Netherlands), Gorinchem (the Netherlands), and Montmelo (Spain).
• Savings from the 3-S Program are ahead of scheme and were 36 million EUR higher than in 2006, resulting in cumulative savings of 98 million EUR.
• Sale of CSM Sugar delivered a book profit of 142,8 million EUR.
• Cash flow from operating activities from continuing operations amounted to 142,9 million EUR (2006: 96,4 million EUR).
• Repurchase of company shares for 100,5 million EUR.
• Earnings per share equal 3,06 EUR (2006: 1,47 EUR).
• Proposed increase in the dividend by ten percent from 0,80 EUR (2006) to 0,88 EUR per share.

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