Barry Callebaut: Full-Year Results Fiscal Year 2022-2023

Zurich / CH. (bc) Swiss Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, reported its fiscal year 2022/2023 results. The Group saw a slight sales volume decline of -1.1 percent to 2,280,925 tonnes in fiscal year 2022/2023, that ended in Switzerland August 31, 2023.

Volumes were negatively affected by the prior year’s salmonella incident in Wieze which continued to impact results in Q1 2022/2023, as well as by the weaker customer demand and increasing raw material prices. The chocolate business reported a decline of -2.0 percent, with the global chocolate confectionery market declining -1.0 percent.

While EMEA volume declined in the first half of the year, recovery of +3.2 percent growth in the second half resulted in flat performance of -0.4 percent in the year. Asia Pacific and Americas both continued to see softer customer demand amid challenging markets, declining -2.0 percent and -4.6 percent in the year respectively.

In terms of the key growth drivers: Outsourcing (strategic partnership) volumes grew +1.7 percent (+4.8 percent in Q4). Gourmet + Specialties declined -4.8 percent due to lower demand and temporary stock unavailability earlier in the year due to the Wieze incident, but gradually recovered and ended the final quarter positive at +0.2 percent. Emerging Markets were broadly flat at -0.2 percent. Sales volume in Global Cocoa increased to 467,877 tonnes, a year-on-year increase of +2.4 percent.

Sales revenue amounted to CHF 8,470.5 million, up +9.7 percent in local currencies (+4.7 percent in CHF). The increase was driven by high raw material price increases and the overall inflationary environment.

Gross profit exceeded volume performance and amounted to CHF 1,348.5 million, up +16.0 percent in local currencies (+10.8 percent in CHF), as the inflationary environment was well managed through the company’s cost-plus pricing model.

Operating profit (Ebit) amounted to CHF 659.4 million, up +12.2 percent in local currencies (+5.6 percent in CHF) compared to prior-year Ebit recurring4, well ahead of volume. Performance improved in comparison to the softer prior year, which was heavily impacted by the Wieze incident in the final fiscal quarter, leading to lower volumes and related Operating profit (Ebit) recurring. In addition, the strong result in the Global Cocoa business contributed to the year-on-year increase. Ebit per tonne improved to CHF 289, up 13.4 percent in local currencies (+6.7 percent in CHF), compared to Ebit recurring7 per tonne in the prior year of CHF 271. Ebit reported amounted to CHF 659.4 million vs. CHF 553.5 million in the prior year.

Net profit amounted to CHF 443.1 million, up +9.6 percent in local currencies (+3.4 percent in CHF) compared to prior-year net profit recurring. The net finance costs slightly increased to CHF -124.1 million, up from CHF -121.8 million in prior year, as a result of higher interest benchmark rates. The income tax expense amounted to CHF -92.1 million in 2022/2023, corresponding to an effective tax rate of 17.2 percent (16.4 percent in prior year).

Net working capital increased to CHF 1,466.2 million, compared to CHF 1,293.1 million in prior year. The increase was driven by the net effect of higher raw material prices on receivables, inventories and derivatives.

The adjusted Free cash flow decreased to CHF 251.8 million, compared to CHF 358.5 million in the prior year. Before the adjustment for cocoa bean inventories regarded by the Group as readily marketable inventories (RMI), cash flow generation declined to CHF 113.0 million, compared to a strong prior year (CHF 266.2 million). Free cash flow was heavily impacted by increases in raw material prices, particularly cocoa, which strongly affected net working capital.

Net debt increased to CHF 1,308.7 million from CHF 1,199.0 million in the prior-year period as working capital requirements expanded following raw material price increases. Taking into consideration the cocoa bean inventories regarded as readily marketable inventories (RMI), adjusted net debt decreased to CHF 41.1 million compared to CHF 349.8 million in the prior-year period.