Zurich / CH. (bc) Swiss Barry Callebaut Group, the world’s leading manufacturer of cocoa and chocolate products, announced its financial results for the first three months of fiscal year 2016/2017 – ended on November 30, 2016. Highlights:
- Sales volume flat (-0.4 percent), driven by above-market growth in chocolate (+2.3 percent) and the nearly completed phase-out of less profitable contracts in cocoa (-8.6 percent)
- Sales revenue of CHF 1.9 billion, up 3.2 percent in local currencies (+4.2 percent in CHF)
- Gourmet + Specialties continues to perform strongly, up +14.3 percent
Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, said: «We had a steady start to the year with the Cocoa Leadership project on track, all chocolate regions delivering solid growth above the market and Gourmet and Specialties performing very strongly. Our «smart growth» strategy is proving to be the right recipe for a continued challenging market environment».
Group Key Sales Figures
| Change in% | First quarter 2016/2017 | First quarter 2015/2016 | |||||||||||||
| Local Currencies | CHF | ||||||||||||||
| Sales volume | Tonnes | (0.4%) | 492’931 | 494’873 | |||||||||||
| Sales revenue | million CHF | 3.2% | 4.2% | 1’885.8 | 1’809.3 | ||||||||||
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The Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, registered flat sales volume growth (-0.4 percent) to 492’931 tonnes during the first three months of fiscal year 2016/2017 (ended on November 30, 2016), against a strong base from the prior year. Overall volume growth was consistently above the declining global chocolate confectionery market (-2.3 percent) in volume. A good performance in the chocolate business of 2.3 percent was balanced out by the ongoing and now almost completed intentional discontinuation of less profitable cocoa contracts (-8.6 percent). Gourmet + Specialties showed outstanding volume growth of 14.3 percent supported by the acquisition of the beverage powder mixes business from FrieslandCampina Kievit. Sales revenue for Barry Callebaut increased by +3.2 percent in local currencies (+4.2 percent in CHF) to CHF 1’885.8 million.
Outlook: Good visibility on volume growth
Looking ahead, CEO Antoine de Saint-Affrique said: «We have good visibility on volume growth and expect acceleration in the second half of the fiscal year. We are on track to deliver improved profitability in our cocoa business. The «smart growth» strategy will provide us with the right balance to focus on consistent above-market volume growth, enhanced profitability and free cash flow generation. We confirm our mid-term guidance through 2017/2018 of on average: 4 to 6 percent volume growth and EBIT above volume growth in local currencies, barring any major unforeseen events».
Strategic milestones in the first three months of fiscal year 2016/2017
- Expansion: In September, Barry Callebaut announced its intention to acquire and integrate the chocolate production facility of Mondelez International in Halle, Belgium, in its network. In addition, Mondelez International will enter into a long-term agreement for the supply of an additional 30’000 tonnes of liquid chocolate per year. The transaction was closed on December 31, 2016. Furthermore, chocolate capacity expansions were announced in California, US, and in Singapore. The opening of the first chocolate factory in Indonesia was also an important milestone for the Group.
- Innovation: Together with a high tech partner in the Netherlands, Barry Callebaut developed a revolutionary 3D chocolate printing capability. With 3D chocolate printing, Barry Callebaut can combine its rich legacy in chocolate making with the technologies of tomorrow, creating new experiences in enjoying chocolate.
- Sustainability: In November Barry Callebaut launched its new sustainability strategy Forever Chocolate, targeting 100 percent sustainable chocolate by 2025. In order to make sustainable chocolate the norm, Forever Chocolate includes four targets that the company expects to achieve by 2025 and that address the biggest sustainability challenges in the chocolate supply chain: child labor, farmer poverty, its carbon and forest footprint and sustainable sourcing.
Regional/Segment performance
Region EMEA – Good volume growth in developed markets
The European chocolate confectionery market volumes declined by 3.1 percent. Barry Callebaut’s sales volume in Region EMEA (Europe, Middle East, Africa) recorded volume growth of 2.2 percent to 225,087 tonnes in a still challenging market. All product groups contributed to this result, in particular Gourmet + Specialties, supported by the acquisition of the beverage powder mixes business from FrieslandCampina Kievit. Western Europe had strong volume growth in both Food Manufacturers and Gourmet, while Eastern Europe faced a more challenging environment. Sales revenue in Region EMEA increased by 3.3 percent in local currencies (+3.0 percent in CHF) to CHF 772.7 million as a result of good volume growth and increased sales of Specialties products.
Region Americas – Steady start
The chocolate confectionery market volumes in the Americas declined by 2.0 percent. After the outstanding prior-year quarter with double-digit growth, Region Americas had a steady start with 1.4 percent volume growth to 113,112 tonnes. Strong growth in Gourmet + Specialties, as well as a strong performance in South America, were partly offset by softer growth in Food Manufacturers in North America. Sales revenue in Region Americas was flat at -0.2 percent in local currencies (+0.8 percent in CHF) and came in at CHF 431.7 million, as a result of lower raw material prices.
Asia Pacific – Growth momentum continues
Chocolate confectionery market volumes in Asia Pacific grew by 3.7 percent. Barry Callebaut’s Region Asia Pacific delivered solid volume growth of +8.8 percent to 22’544 tonnes with most of the key countries in the Region performing well. Growth was mainly driven by Food Manufacturers. Sales revenue rose by 10.2 percent in local currencies (+13.8 percent in CHF) to CHF 92.9 million as a result of a better product and customer mix.
Global Cocoa – Intentional volume decline continues
In Global Cocoa, sales volume to third parties was down by -8.6 percent, to 112’188 tonnes. As earlier indicated, the phasing-out of less profitable contracts was continued and is now nearing completion. Sales revenue grew by 4.5 percent in local currencies (+7.2 percent in CHF) to CHF 588.5 million, due to a more favorable product mix.
