Cloetta Fazer: reports higher sales but lower profit for H1/2008

Stockholm / SE. (bw) Cloetta Fazer´s net sales for the second quarter rose by 80 million SEK to 738 million SEK. Operating profit amounted to seven million SEK (33) excluding a goodwill impairment charge of 90 million SEK arising from the upcoming demerger of Cloetta Fazer. Operating margin was one percent (4,9 percent).

«Like the first quarter, the second quarter of 2008 was characterised by lower gross margins resulting from increased raw material costs and higher selling and marketing expenses», says the company´s CEO Jesper Åberg.

Total sales for the first half of the year rose by nine percent to 1’520 million SEK (1’398). The increase in sales for the period is mainly explained by acquisitions and volume growth. Operating profit for the first six months excluding the impairment charge of 90 million SEK was 54 million SEK (112).

«The implemented price increases have not been sufficient to offset higher raw material costs, which has impacted gross margins and contributed to the year´s weak earnings trend», adds Åberg.

The demerger of Cloetta Fazer has led to a goodwill impairment charge of 90 million SEK owing to decreased sales in the new Cloetta, which in the future will not include sales of Fazer products in Sweden.

_{About: Cloetta Fazer AB is the Nordic region´s leading confectionery company, with a market share of around 22 percent. The company has production facilities in Sweden and Finland. Cloetta Fazer´s strength lies in its many popular brands. The average number of employees is around 1’600 and annual sales amount to approximately 3,3 billion SEK.}