CSM Reports Robust Sales in Q2

For the first half year sales were € 1,283.7 million compared with € 1,247.2 million in 2008. Currency effects amounted to € 69.9 million. Organic sales growth was 2.9% negative driven by lower sales volume.

5 Aug 2009 CSM has reported that initiatives to reduce costs, improve efficiency and drive innovation together with a more favorable raw material and currency impact have led to an improvement in the second quarter EBITA. This improvement in results has been achieved despite the ongoing effects of the recession that negatively impacted volume growth.

Sales for the second quarter were € 647.6 million compared with € 629.0 million in 2008; organic growth was 3% negative due to lower sales volume. Currency effects had a positive impact of € 37.2 million mainly due to the stronger US dollar. For the first half year sales were € 1,283.7 million compared with € 1,247.2 million in 2008. Currency effects amounted to € 69.9 million. Organic sales growth was 2.9% negative driven by lower sales volume.

EBITA before exceptional items in the second quarter amounted to € 40.6 million, up € 4.4 million compared with the same period in 2008. EBITA before exceptional items for the first half amounted to € 60.7 million (€ 68.8 million in the first half-year of 2008). Currency effects positively impacted results by € 3.7 million and € 5.9 million for the second quarter and the first half-year respectively. Furthermore, a recovery of margins mostly as a result of current raw material contracts, cost savings and improvements at H.C. Brill were the main drivers of the higher results.

Working capital improved by € 10.2 million (including negative currency effects of € 3.2 million) compared with year-end 2008. This is the balance of an improvement of € 43 million in inventories and an improvement of € 10.3 million in receivables offset by lower payables of € 39.9 million. Net debt at the end of the second quarter amounted to € 500 million, a reduction of € 28 million compared with year-end 2008.

Volumes were down 3% in bakery (2% in the second quarter) and 10% at PURAC (of which two thirds is related to the effect of the 2008 potassium strike). Pricing was down slightly at bakery in line with reduction of commodity prices, up by 12% at PURAC. Cost savings are on track with approximately 50% realized of additional target of € 25 million for the full year. Working capital was substantially lower in inventory and receivables, partially offset by lower payables.  Net debt at € 500 million, reduced by € 28 million compared with year-end 2008.