Net Sales: SEK2.2 billion, representing a 5.7% organic growth.
Branded Package Sales Growth: 1.4% organic growth.
Pick & Mix Sales Growth: 18.6% growth driven by strong volume growth and margin-enhancing initiatives.
Operating Profit: SEK238 million, one of the highest quarterly profits ever.
Net Debt to EBITDA: 1.6 times, below the long-term target of 2.5 times.
Free Cash Flow: SEK211 million for Q3, stronger than last year.
CapEx: SEK38 million, on the lower side due to several factors including greenfield project preparations.
Adjusted Operating Profit Margin for Pick & Mix: In the targeted range of 5% to 7% for three consecutive quarters.
Release Date: October 25, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Cloetta AB (CLOEF) reported a strong quarter with 5.7% organic growth in net sales, reaching SEK2.2 billion.
The Pick & Mix segment showed significant growth, with an 18.6% increase driven by strong volume growth and margin-enhancing initiatives.
The company achieved its highest rolling 12 months adjusted operating profit ever.
Net debt over EBITDA is well below the long-term target, landing at 1.6 times, indicating a strong financial position.
Cloetta AB (CLOEF) has successfully turned around the Pick & Mix segment from loss-making to profitable, achieving its margin target of 5% to 7% for three consecutive quarters.
The historically high cocoa prices are expected to impact costs more significantly in Q4, posing a challenge to maintaining high margins.
The Pastilles and Gum categories continue to face challenges, affecting overall volume/mix performance.
The reassessment of the greenfield project due to increased energy supply risks may delay potential capacity expansions.
Despite strong profit growth, the operating profit margin target of 14% is still not achieved, indicating room for improvement.
General salary inflation and increased marketing spend have driven up sales, general, and administrative expenses.
Q: You mentioned the Swedish candy trend in the USA. Can you elaborate on what you see and how it affects you? Is it a market you will invest more in? And what are the M&A potential going forward? A: Yes. Pick & Mix is building on the trend of consumers looking for more individualization as they pick the candy according to their personal preferences. It’s been very strong in the North, and now we also see demand in other markets. We have turned Pick & Mix from loss-making to profitable, and now we’re evaluating the next steps for expansion.
