- Net sales for the quarter amounted to SEK 1,159m (1,124). Operating profit was SEK 90m (129)
- Underlying net sales decreased by 3.2 per cent, which was caused by weak market conditions.
- Underlying EBITA amounted to SEK 128m (159). The decrease is primarily due to lower volumes, increased investment in the market and temporary costs within manufacturing.
CEO Bengt Baron comments on the third quarter development:
“After a relatively weak first half of the year, the third quarter shows that we are on the right track. Earnings for the period were positive although underlying profit was down somewhat compared to the previous year.
Market conditions remained challenging in the third quarter, mainly as a result of the macroeconomic development. For Cloetta, this meant that underlying sales in the third quarter declined by 3.2 per cent compared to the same period last year.
Raw material costs remain at a historically high level and we have not seen a decrease in our total raw material costs. Our pricing strategy, to balance higher raw material costs with increased prices, stands firm. However, we are experiencing a difficult market situation with relatively low or even negative growth, which has contributed to higher promotion and consumer pressure. Therefore, we have invested in the market to a large extent in order to defend our market shares. This has naturally had an impact on earnings in the short term.
The Scandinavian integration process is proceeding according to plan and we have formed a joint sales and marketing organisation in Sweden since the beginning of the autumn. We have already noted certain positive signs as a result of the new organisation, such as for example accelerated sales.
With regard to our factory restructurings, the facility in Alingsås has ceased all manufacturing of products. The aim is to leave the premises around year end. The factory in Aura is still manufacturing products, which is according to plan, but the majority of products have been prepared for production in the receiving factories. In the Gävle factory, which we do not intend to close until the beginning of 2014, efforts are focused on continuing production while simultaneously preparing the transfer of products.
The overall factory restructuring is a large-scale project in which approximately 40 per cent of all products will be transferred in less than two years. This is obviously an ambitious undertaking that has impacted our production efficiency and costs in the short term.
The third quarter was a clear step in the right direction. We are executing our plan and I am convinced that the integration process and factory restructurings will generate significant cost savings, something that will create an even stronger company in the longer term.”