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CSM strong trading update set to tempt US and European bidders?

By Kacey Culliney , 30-Jan-2013

The company is seeking buyers for many of its bakery brands
The company is seeking buyers for many of its bakery brands

CSM has released a 2012 unaudited trading update to inform potential buyers from the US and Europe on business progress ahead of its mid-year divestment.

The food ingredients group will divest its main bakery supplies business in the first half of this year as it realigns itself to form a bio-based ingredients company. Bakery brands up for sale include BakeMark, Craigmillar and Baker & Baker.

“We have decided to issue this trading update of our unaudited 2012 results so as to be able to inform the selected potential buyers… We will use the balance sheet at the end of 2012 as the closing balance sheet for the divestment,” it said.

CSM said a select group of potential buyers from the US and Europe had been chosen following initial non-binding offers for its bakery supplies activities.

“In both Europe and North America management presentations have been held for the benefit of these selected potential buyers,” it said.

Operating profits surge despite ‘eventful year’

In the unaudited figures, the firm reported that operating profits for the year (excluding one-off costs) surged 13% to €170.4m ($229.7m) compared with 2011.

A strong fourth quarter (Q4) aided overall growth, CSM said, with operating profits up 39.7% - an increase of €16m ($21.6m) from the same 2011 period.

Sales for Q4 were pegged at €854.7m ($1.1bn), up €52.2m ($70.3m) compared to Q4 2011.

The firm reported strength in both North America and Europe.

Sales and operating profits were up in North America for Q4 thanks to improved margins and good cost control, it said, particularly from in-store bakery activities.

In Europe, volumes increased in Q4 compared to last year – marking the first increase since 2012 – and the decline of the artisan channel slowed compared to earlier quarters.

CEO of CSM Gerard Hoetmer said the results were pleasing following an “eventful year”.

“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,” Hoetmar said.

“The positive momentum will continue to deliver growing benefits in the coming quarters,” the CEO added.