A good first quarter for Cloetta

Cloetta posted net sales of SEK 457 million (446) for its first quarter following the separation from Fazer Confectionery. The quarter includes the important period from September to November, which is dominated by the Christmas sales. Operating profit amounted to SEK 38 million (38) with an operating margin of 8.3% (8.5). Excluding items affecting comparability, which are mainly attributable to the demerger of Cloetta Fazer and to restructuring in 2007, operating profit was SEK 33 million (60), equal to an operating margin of 7.2% (13.5).

“The organisation has succeeded admirably in increasing Cloetta’s sales despite the intensive effort devoted to the demerger of Cloetta Fazer,” says CEO Curt Petri. “Cloetta’s net sales were up by 2.5% and sales of the company’s ten prioritised brands rose by 4%.”

“This excellent start gives us a renewed sense of for the future. The first quarter, which includes the important Christmas sales, accounts for 30%-35% of Cloetta’s total sales and a clearly dominant share of earnings for the full year,” adds Curt Petri.

“Cloetta’s earnings have been impacted by increased raw material costs, which have risen further due to weakening of the Swedish krona. It will therefore be necessary to introduce additional price hikes alongside measures to improve efficiency.”

Following the demerger of the Cloetta Fazer Group, Cloetta will no longer sell Fazer’s products after 31 December 2008. In the short term it will not be possible to reduce expenses to an extent equal to the decrease in net sales, for which reason Cloetta anticipates a negative operating margin and therefore also a loss for the current financial year . The average number of employees at the end of the quarter was 490 (531).

The information in this press release is subject to the disclosure requirements of Cloetta AB (publ) pursuant to the Swedish Securities Market Act. The information was submitted for publication on 30 January 2009, 01:30 p.m CET.