NETHERLANDS: CSM shares climb despite FY profits drop
CSM FY profits dip
One-off costs have caused profits at ingredients group CSM to fall in 2012, but sales growth and better-than-expected underlying earnings saw the firm's share price jump following its results announcement.
CSM's share price rose by 4% in early trading today (29 January), after it reported EBITA up by 34% in the final quarter of its fiscal year, to the end of December. EBITA was EUR36.8m (US$49.5m) for the three-month period.
Over the whole year, however, EBITA fell by 4.4% versus 2011, to EUR124.4m. Profits were dented by one-off costs related to the ongoing attempted sale of the group's bakery supplies business and investment in its food preservation and bioplastics arm, Purac.
At the top-line, CSM said that net sales for both the year and the fourth quarter rose by 6.5%, to EUR3.3bn and EUR854.7m respectively. However, currency exchange flattered the performance, with organic sales up by 0.4% for the full-year and price rises offsetting a decline in volume sales.
There was little update on the Netherlands-based firm's planned sale of its bakery supplies business.
"The strategic transformation of CSM is progressing in-line with expectations," the firm said, adding that it has significantly reduced net debt over the past 12 months.
CSM reports higher sales and EBITA before one-off costs for Q4 and for full year 2012. EBITA
excluding one-off costs was up by 40% in Q4, with higher sales, further cost savings and overall
margin improvements as the main contributors. The strategic transformation of CSM is
progressing in line with original expectations. In order to facilitate the divestment process of the
Bakery Supplies business, and in anticipation of the definitive results to be published on 13
March, CSM today announces its unaudited trading results for 2012.
• Sales for the fourth quarter increased to € 854.7 million from € 802.5 million in 2011. Organic sales
growth was 2.5%, a combination of higher prices (2.0%) and higher volumes (0.5%). Currency
movements had a positive impact of € 25.4 million (3.2%) due largely to the stronger US dollar. The
year-on-year increase in Q4 attributabe to acquisitions amounted to € 6.6 million (0.8%).
• Sales for the full year increased by 6.5%. Sales in constant currencies increased by 1.2%. Organic
sales growth was 0.4%, a combination of lower volumes of 2.2%, partly offset by a positive price
effect of 2.6%. The acquisition effect was 0.8%.
• EBITA excluding one-off costs in the fourth quarter amounted to € 56.3 million, an increase of
€ 16.0 million or 39.7% compared with the same period in 2011. The strong organic improvement in
North America of € 12.9 million, at constant currency, was the main contributor.
• EBITA year-to-date excluding one-off costs amounted to € 170.4 million, an increase of 13.0%
compared with 2011. Currency movements positively impacted EBITA by € 12.1 million compared
• One-off costs in Q4 2012 amounted to € 19.5 million of which € 5.9 million was related to the
Relevance restructuring program. Full year Relevance savings amounted to € 39.0 million,
exceeding the 2012 target of € 30 million.
• The remaining one-off costs of € 13.6 million in Q4 were related to the divestment process,
comprising mainly incentive accruals and costs for advisors. The divestment process is progressing
in line with original expectations. The related costs of € 33.3 million are included in the full year oneoff
x € million
2012 2011 2012 2011
854.7 802.5 Net sales 3,314.6 3,112.6
56.3 40.3 EBITA excluding one-off costs* 170.4 150.8
36.8 27.4 EBITA 124.4 130.2
6.6% 5.0% EBITA % (excl. one-off costs)** 5.1% 4.8%
*) EBITA is earnings before Interest, Tax, Amortization/Impairments, One-off costs comprise restructuring and divestment costs.
**) EBITA as % of net sales
The figures in this Press Release have not been audited.
Diemen, the Netherlands, January 29, 2013
1112 XE Diemen
PO Box 349
1000 AH Amsterdam
CSM Q4 and full year 2012 Trading Update
Commenting on the results, Gerard Hoetmer, CEO of CSM, said:
“I am very pleased we have achieved a further recovery in our underlying results for the whole of 2012
and particularly in Q4 2012, despite having to contend with the ongoing challenging market environment
at the same time as pursuing the strategic transformation of CSM. Numerous initiatives have been
deployed throughout the organization to improve volumes and to increase profits. The success of these
initiatives is evidenced by the resumption of volume growth in Bakery Supplies in Q4. The positive
momentum will continue to deliver growing benefits in the coming quarters.
The performances of our North American Bakery Supplies businesses, Bakery Products, Caravan
Ingredients and BakeMark, continued to improve in a market impacted by lower consumer spending.
Volumes were almost stable in Q4, and good margin management combined with strong cost control
boosted profits compared to last year. In Bakery Supplies Europe, volumes increased in Q4 compared to
last year, the first increase since 2010. The decline in the artisan channel was not as pronounced as in
the previous quarters. In line with our strategy, Bakery Supplies Europe successfully compensated this
with significant growth in the in-store bakery channel.
The opportunities to exploit our biotechnology capabilities in downstream products (such as lactides and
bio-plastics) and adjacent new organic acid platforms (for example succinic acid) continue to be very
promising. We are making good progress in these long term innovation cycles. At the same time, we are
developing one, new operating company on the foundations of both Caravan Ingredients and Purac that
will be able to execute our bio-based ingredients strategy. The performance of Future CSM has to be
seen in this perspective and against the background of an ongoing tough market situation. Volumes in
the Food segment of Purac remain under pressure due to the subdued food market in general and low
cost preservation substitutes in the US specifically, offsetting good growth at Chemicals and Pharma.
Caravan Ingredients increased its market share and its overall performance was robust.
The savings from our Relevance restructuring program have significantly exceeded our original target,
while the costs of this program have remained below the initial plan. The preliminary closing of our books
indicates that a significant improvement in our net debt level, compared to the level of end 2011, was
2012 was an eventful year for CSM. Following a comprehensive review of the group’s strategy, CSM
announced in May a major next step in the evolution of our company: the transformation of CSM into a
bio-based ingredients company and the divestment of our Bakery Supplies businesses. The strategic
transformation of CSM is progressing according to the original expectations. I am proud of the way our
people have responded to this change and are continuing to focus on serving our customers and driving
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