CSM sales increase but higher commodity prices expected

The world’s largest bakery supplier posted an increase of sales of €149.2m for the third quarter, but notes a substantial hike in commodity costs and reports that it has taken some steps to offset this through higher prices.

Sales for the third quarter of this year were € 783.7m compared with € 634.5m in 2009 said the Dutch bakery ingredients supplier, CSM.

EBITA for the period, it added, excluding one-off integration costs, amounted to €56.7m, which was up € 9.1m compared with the same period in 2009.

Volume growth and cost controls at its European bakery supply unit offset higher raw material prices, but higher commodities costs impacted earnings before interest, taxes and amortisation (EBITA) at its Purac lactic acid unit, said the leading bakery ingredients supplier.

“The sharply increased raw material market prices have not been fully absorbed yet by increased selling prices or reformulations of our products. We are working diligently to address this,” said the company.

But CSM added that it remains cautiously optimistic for the fourth quarter of 2010, expecting investments in the organisation and further innovation to continue to create growth opportunities.

CSM said that contributors to the positive third quarter sales picture included positive currency effects and organic growth within all its divisions.