Interim report 1 September 2008 – 28 February 2009: Increased sales of the prioritised brands

Sales of Cloetta products increased by 2.4% during the period. For the second quarter, Cloetta reported net sales of SEK 278 million (332). The licensed sales agreement with Fazer Confectionery in the Swedish, Norwegian and Danish markets, a result of the demerger of Cloetta Fazer, was terminated at year-end 2008. Operating profit for the second quarter was SEK -8 million (-9).

Net sales for the first half of the year, covering the period from 1 September 2008 to 28 February 2009, amounted to SEK 735 million (778). Operating profit for the six-month period was SEK 30 million (29) and operating margin was 4.1% (3.7).

Excluding all items affecting comparability, which have essentially arisen in connection with the separation from Fazer, operating profit was SEK 25 million (51). Profit after tax was SEK 32 million (22), equal to earnings per share of SEK 1.33 (0.91).

Volume sales of Cloetta’s ten prioritised brands rose by 3% during the first six months, compared to the same period of last year.

“Cloetta’s products sold well throughout the entire six-month period,” says the company’s Managing Director Curt Petri. “The fact that net sales fell by a total of 5.5% in the first half of the year is a result of the demerger of Cloetta Fazer and subsequent termination of Cloetta’s licensed sales agreement with Fazer Confectionery at the end of 2008, which has also had a negative impact on profit. Sales of Cloetta’s own products increased by 2.4% during the period.”

“From an earnings standpoint Cloetta is still feeling the effects of increased raw material costs, which have risen further in recent months due to weakening of the Swedish krona,” adds Curt Petri. “We will therefore be forced to make additional price hikes in 2009. At the same time, we will continue our successful efforts to optimise efficiency.”

“Due to the consequences of the demerger of Cloetta Fazer, my assessment is that Cloetta’s operating margin will be negative during a transitional period and that the company will therefore report a loss for the full year 2009,” concludes Curt Petri.