Barry Callebaut: Q4 Results Fiscal Year 2021-2022

Zurich / CH. (bc) Swiss Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, achieved strong sales volume growth of +5.3 percent to 2,306,681 tonnes in fiscal year 2021/22 (ended August 31, 2022). The chocolate business reported strong volume growth of +5.9 percent (organic +4.5 percent), excluding the first-time consolidation of ECC), clearly outpacing the flat underlying global chocolate confectionery market (+0.3 percent). Volume growth was supported by all Regions (Asia Pacific +15.8 percent, Americas +6.4 percent, EMEA +4.3 percent) and all key growth drivers, Outsourcing (+4.8 percent), Emerging Markets (+7.9 percent) and a particularly strong performance by Gourmet + Specialties (+22.5 percent). Sales volume growth in Global Cocoa further normalized to 456,970 tonnes, an increase of +2.5 percent.

Sales revenue amounted to CHF 8,091.9 million, up +14.6 percent in local currencies (+12.3 percent in CHF). The increase was impacted by the overall inflationary environment, which Barry Callebaut managed through its cost-plus pricing model for the majority of its business.

Gross profit grew faster than sales volume and amounted to CHF 1,217.2 million, up +8.4 percent in local currencies (+6.1 percent in CHF). Despite the lost volume due to the temporary stoppage of the Wieze factory, the contribution of volume to Gross profit was very healthy. In particular the growth in Gourmet + Specialties and the Group’s solid cost-plus model contributed to the positive mix. As anticipated, profitability in the Cocoa business improved and led to a positive contribution for the financial year 2021/22.

Operating profit (Ebit) recurring amounted to CHF 624.7 million, up +13.5 percent in local currencies (+10.2 percent in CHF), well ahead of volume growth. Ebit recurring per tonne improved to CHF 271 from CHF 259 in prior year. Ebit reported amounted to CHF 553.5 million, +0.1 percent in local currencies (-2.3 percent in CHF), and included a positive impact of CHF 13.5 million from the recovery of indirect tax credits for prior fiscal periods in Brazil, as well as the net one-off impact of CHF -76.9 million related to the salmonella incident at the Wieze factory in Belgium, and a negative impact of CHF -7.8 million for the closure of the chocolate factory in Moreton, UK.

Net profit recurring amounted to CHF 428.5 million, up +14.1 percent in local currencies (+11.4 percent in CHF) compared to prior year. The reported Net profit for the year amounted to CHF 360.9 million, down -4.7 percent in local currencies (-6.1 percent in CHF). The net finance costs amounted to CHF -121.8 million, up from CHF -101.7 million in prior year. The income tax expenses amounted to CHF -70.8 million in 2021/22, corresponding to an effective tax rate of 16.4 percent (17.3 percent in prior year).

Net working capital increased to CHF 1,293.1 million, compared to CHF 1,241.8 million in prior year. The increase was less than the Group’s volume growth. Receivables increased on the back of business growth. While good inventory management largely mitigated the impact of general raw material price inflation, the temporary stoppage in Wieze led to some increase. Both developments were largely offset by higher payables.

The adjusted Free cash flow increased to CHF 358.5 million, compared to CHF 314.9 million in prior year. Even before the adjustment for cocoa bean inventories regarded by the Group as readily marketable inventories (RMI), cash flow generation remained solid and amounted to CHF 266.2 million, compared to a very strong prior year (CHF 355.0 million).

Net debt further decreased to CHF 1,199.0 million from CHF 1,281.3 million in the prior-year period, driven by the Group’s continued solid Free cash flow generation. Taking into consideration the cocoa bean inventories regarded as readily marketable inventories (RMI), adjusted Net debt decreased to CHF 349.8 million compared to CHF 547.4 million in the prior-year period.

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