Barry Callebaut: Good momentum impacted by Covid-19 in Q3-2020

Zurich / CH. (bc) Swiss Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, announced its key sales figures for the third quarter of fiscal year 2019/2020, ended on May 31 – respective the 9 months up to May 31, 2020. According to the company the good momentum of first six months was impacted by Covid-19 in third quarter Summary:

  • Sales volume down -1.3 percent in the first nine months, due to Covid-19 third quarter sales volume down -14.3 percent
  • Sales revenue of CHF 5.2 billion, up +0.4 percent in local currencies (-4.4 percent in CHF)
  • Signs of sales volume recovery in June, as lockdowns are easing
  • Confident outlook resulting in updated mid-term guidance with increased metrics: on average, for the 3-year period 2020/2021 to 2022/2023, +5 to 7 percent volume growth and Ebit above volume growth in local currencies, barring any major unforeseeable events. Updated midterm guidance excludes fiscal year 2019/2020 and starts in September 2020

CEO Antoine de Saint-Affrique: «As anticipated in April, Covid-19 lockdowns across the globe impacted our sales volume in the third quarter, and herewith the good momentum of the first six months of fiscal year 2019/20. Throughout the Covid-19 pandemic, the precautionary measures we put in place early on allowed us to preserve business continuity and maintain a high service level for our customers worldwide, whilst protecting the health of our employees and the communities we operate in. We expect to emerge from the crisis with even closer relationships with our customers and suppliers, with fresh insights into innovative ways of doing business and a solid financial basis.»

The Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, saw its good growth momentum of the first six months impacted by Covid-19 with volumes declining in the third quarter (ended May 31, 2020) by -14.3 percent. This led to an overall decline in the Group’s sales volume of -1.3 percent to 1,568,878 tonnes in the first nine months of fiscal year 2019/20. Sales volume in the chocolate business declined by -14.1 percent in the third quarter, leading to a slight decline of -1.4 percent for the first nine months. The underlying global chocolate confectionery market in the first nine months was flat (0.0 percent2) according to Nielsen. Global Cocoa volumes were down -14.6 percent in the third quarter and about flat for the nine-month period under review (-0.7 percent). Sales revenue in the first nine months amounted to CHF 5.2 billion, an increase of +0.4 percent in local currencies (-4.4 percent in CHF).

In June the Group saw a gradual sales volume recovery, as governments started to lift their Covid19 measures. These early signs of recovery are visible both in Food Manufacturers and Gourmet + Specialties, albeit at a different pace.

Covid-19 update

Thanks to the precautionary measures and commitment of its employees, Barry Callebaut is able to keep its operations running and maintain a high level of service to its customers. In the face of the Covid-19 pandemic, the Group adopted precautionary measures early on to provide safe working environments for its employees and to maintain business continuity. In addition to the Group’s already strict hygiene standards, additional measures were put in place in factories, offices, laboratories and distribution centers. These measures include new hygiene protocols, social distancing on the work floor, remote working and limitation of travel. The Group also supported its employees in adjusting to the new normal.

Outlook – Updated mid-term guidance reflects confidence

Looking ahead, CEO Antoine de Saint-Affrique said: «We are confident we should rapidly regain momentum as markets are gradually reopening. This confidence is bolstered by the quality of our customer relationships, the breadth of our business model, as well as our strong innovation pipeline and balance sheet. The Covid-19 pandemic is a major unforeseen event which will have a negative impact on fiscal year 2019/20. This is why we update our mid-term guidance3, excluding fiscal year 2019/20 and introducing increased metrics of, on average for the 3-year period 2020/21 to 2022/23, +5 to 7 percent volume growth and Ebit above volume growth in local currencies, barring any major unforeseeable events4. The updated mid-term guidance starts in September 2020.»

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