Swedish snack producer Cloetta has reached an agreement to transfer its Nutisal roasted nuts brand to its Dutch counterpart, The Monchy Food Company.
The Plopp chocolate bar manufacturer stated that the business is set to be sold for approximately €5 to €6 million ($5.4 million – €6.5 million).
Cloetta’s choice to divest Nutisal aligns with the company’s strategy to concentrate on its “core confectionery” brands and pursue its “long-term objective” of achieving an adjusted EBIT margin exceeding 14%.
Nutisal constitutes approximately half of Cloetta’s nuts segment and contributes 2% to the company’s total net sales. Cloetta will maintain nut production as part of its pick-and-mix line.
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The manufacturer of The Jelly Bean Factory brand anticipates recording a non-cash impairment of €7-8 million in its second-quarter financial results, subsequent to the transfer.
It also anticipates that the deal will result in around €6-7 million in “positive cash flow.”
Solna-based Cloetta acquired Nutisal in 2013. In 2020, the manufacturing of the product was outsourced to a third party as part of efforts to enhance competitiveness. Following this, the brand’s Helsingborg plant was shut down in 2021.
The decision comes as Cloetta continues to face challenges posed by exceptionally high cocoa prices. Cocoa represents around 8% of the company’s total raw material costs.
Earlier this year, the company disclosed plans for additional price hikes across its confectionery and chocolate products, citing unprecedented raw material costs for cocoa and sugar.
Financial Performance and Adjustments
In the first quarter of 2024, Cloetta recorded net sales of Skr2.1 billion ($199.3 million), marking a 6.1% year-on-year increase. However, adjusted operating profit decreased by 4% to Skr192 million.
The company manufactures various confectionery brands such as The Jelly Bean Factory, Läkerol pastilles, Plopp chocolate toffee bites, and King mints.
Its primary markets encompass Sweden, Finland, the Netherlands, the United Kingdom, Germany, and Denmark.
Cloetta also distributes its products to Switzerland, as well as countries in the Asia-Pacific and Baltic regions through third-party distributors.
The company operates seven production sites located in Sweden, the Netherlands, Belgium, and Slovakia. In 2023, Cloetta produced approximately 101,300 tonnes of chocolates, confectionery, pastilles, nuts, and chewing gum at these facilities.
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