Cloetta to sell non-confectionery brands as it reports lower sales
Swedish confectionery brand Cloetta has reported fourth quarter sales of 193 million Swedish Krona (€21m) for the fourth quarter and 987 million (€108m) for the full year.
“The past year has been characterised by unusually large fluctuations,” says CEO VD Curt Petri. “In the first quarter we posted higher sales and slight improvement in profit. In the second quarter we were challenged by a tougher market that resulted in significantly lower sales and earnings. The third and fourth quarters brought a continued decrease in sales but a somewhat higher profit. Cash flow for the year significantly exceeded the year-earlier level.”
The drop in sales for the fourth quarter is partly attributable to sales of volumes from the Wedding Series in the same period of 2010. “Our earnings have been negatively affected by aggressive competition in a grocery retail trade that saw an overall decrease in volume during 2011, but also due to lower income from products manufactured on contract,” continues Petri.
“We have introduced certain price increases that will have a positive impact on profit in the coming financial year and starting this autumn. At the same time, we will invest and work together with our customers to develop above all the segments where we are market-leaders, namely countlines including Kexchoklad, chocolate bags like Polly and seasonal products such as Juleskum.”
To strengthen our focus on and sales of Mums-Mums and Mandelbiskvier, Cloetta has started a collaboration with the sales company Sales Support to sell the brands that are not part of the confectionery category.
“With a full-year profit that is clearly below our ambitions, we are making continued changes in our positioning, establishing new partnerships, pursuing a number of efficiency improvement projects and developing our business together with the customers,” concludes Petri.
