CSM: Bakery group issues profit warning

Diemen / NL. (csm) «In our first half-year results statement we indicated that our Bakery Supplies markets had started to be influenced by recessionary pressures and that customer behaviour was being affected by the price increases that had followed from the unprecedented rise in raw material costs», Dutch CSM N.V. said in a statement.

• These trends have intensified during the third quarter and CSM anticipates a challenging environment in the periods to come as demand weakens in its markets.
• Down trading and downscaling is affecting Bakery Supplies volumes, but particularly so in Europe where volumes fell by six percent in the third quarter.
• CSM is responding by adapting to the changing consumer environment by accelerating the launches and offering of value for money products.
• The group expects Purac to make substantial progress with its full year results for 2008.
• The bakery supplier is accelerating moves to drive efficiency improvements including headcount reduction.
• Sales for the first nine months were 1’886,7 million EUR (2007: 1’833,6 million EUR). Organic growth was 9,5 percent, driven by pricing growth of 11,5 percent and volume decline of two percent.
• CSM´s EBITA for the first nine months is 95,7 million EUR (2007: 104,8 million EUR) with 27 million EUR generated in the 3rd quarter (2007: 35 million EUR). Currency translation has a significant impact on our reported results. On a constant currency basis our EBITA for the nine months would have been 103,9 million EUR, with 28,8 million EUR generated in Q3/2008.
• The group expects EBITA before exceptional items for the full year to be ten to 15 percent below the 153,7 million EUR delivered in 2007. Approximately half of the decline in EBITA is due to currency movements.
• CSM intends to publish future trading updates on a quarterly basis.