CSM has warned that it expects to see cost increases in a number of its raw materials during the second half but the Dutch food group said it remains cautiously optimistic about its prospects for the rest of 2010.
The company posted a 26% increase in EBITDA for the second quarter to EUR51.4m due to the effects of its acquisition of US business Best Brands, favourable underlying margin development and currency effects.
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Net sales rose approximately 19% to reach EUR771.7m. However, on an organic basis, sales fell 0.8% due to lower sales volumes.
CSM CEO Gerard Hoetmer said: “In bakery supplies, growth in core countries such as the UK and Germany was not enough to compensate for declining sales in southern and eastern European countries. Maintaining our profitability in those countries whose economies are severely hit is our main objective.”
While CSM expects raw materials prices to increase, it was confident of its ability to cope with the changes. “We have developed a highly professional procurement organisation which enables us to mitigate volatility in raw material costs with our cover positions and allows us to manage the effects of raw material price variances in our pricing strategy,” The company said.
The company is forecasting increased EBITDA compared to the second half of 2009, but said the improvement will be less significant that that of the first half of 2010 due to a stronger comparison base in the second half of 2009.
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