Dutch food group Wessanen has insisted it is becoming a “stronger” company after reporting lower first-quarter profits amid higher IT and marketing costs.
Net profit reached EUR1.5m (US$2m) in the first three months of 2012, down from EUR4.5m a year ago.
Wessanen, which owns UK natural and organic firm Kallo Foods, booked an operating profit of EUR3m, compared to EUR8.1m a year earlier.
The company said the lower operating profit was thanks to a “planned step-up in costs”. Wessanen invested in IT by rolling out SAP and in marketing “to strengthen and grow our brands”, CEO Piet Hein Merckens said.
Revenue from continuing operations fell 4.6% to EUR170.6m, although Wessanen said its “autonomous revenue”, which excludes foreign exchange, as well as the impact of acquisitons and disposals, increased 1.3%.
Hein Merckens said Wessanen had continued to “set further steps on our transformational journey to build our European organic business”.
The Wessanen chief said the organic market “continued to develop favourably” despite low consumer confidence in Europe.
The company’s grocery business, its ABC drinks division in the US and its frozen food operations increased sales. However, sales to health food stores, which is Wessanen second-largest division behind grocery and accounts for 31% of revenue, declined 23.7%. The company is “implementing multiple improvements” to that business, Hein Merckens said.
He added: “Step-by-step we are becoming a stronger more focussed company building its organic brands in Europe.”
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