• EBITA down 26.3% in Q1
  • Sales up on pricing, Purac
  • "Necessary reshaping" of European bakery supplies unit

Dutch ingredients group CSM said its first-quarter profits were down by more than a quarter today (24 April), as weakness at its bakery supplies unit continued to weigh on the group's results.

EBITA excluding one-off costs in the first quarter totalled EUR32.3m (US$42.5m), a decline of EUR11.5m or 26.3% on the first quarter of 2011. Currency exchange added EUR1.2m to the result.

Lower volumes hit profits from CSM's bakery supplies business in North America, which saw underlying EBITA drop 12.5%.

A fall in volumes and costs weighed on earnings from the company's bakery unit in Europe. Underlying EBITA dropped from EUR12.4m to EUR4.8m.

Underlying EBITA from CSM's Purac bioplastics division decreased 18.9% to EUR10.3m thanks to investment in the business, including a new factory in Thailand.

CSM, however, reported improved revenue. First-quarter net sales were EUR798.7m up from EUR759.8m a year earlier. Higher sales were driven by pricing initiatives and volume gains at Purac, CSM said.

Pricing contributed 5.1% to sales growth offsetting a decline in volumes, which dropped by 3.3%, the company revealed. Volumes from CSM's bakery supplies division declined by 4.4%, the company revealed. Volumes from Purac increased 3.5%.

Commenting on the result, CEO Gerard Hoetmer said CSM's bakery supplies business in North America performed "in line" with expectations, as price increases offset falling volumes. 

However, he insisted the group was "not satisfied" with the development of its bakery supplies business in Europe. 

"In particular, we had to contend with lower volumes in both the artisan bakery and the industry channels. These negative developments have further strengthened our commitment to a significant and necessary reshaping of our bakery supplies business portfolio [in the EU]. Meanwhile, we continue to strengthen our presence in the strategically important out-of-home/in-store channels by rebalancing activities and resources," he said. 

Click here for the full results release and click here for more coverage from just-food on the results, including news of possible further cuts at CSM's bakery division.