Zurich / CH. (bc) Barry Callebaut AG, the world´s leading manufacturer of high-quality cocoa and chocolate products, outperformed the global chocolate market with sales volume growth of 2,6 percent in the first three months of fiscal year 2011/2012, ended November 30, 2011. Region Americas grew by double-digits whereas Region Asia-Pacific recorded slower growth and Region Europe slightly decreased. The Food Manufacturers Products business grew at plus 4,5 percent and the Gourmet + Specialties Products business increased volume by 3,4 percent. Quarterly sales revenue outpaced volume growth with a gain of plus 5,0 percent in local currencies, minus 4,1 percent after translation into Swiss Francs (CHF).
CEO Juergen Steinemann: «After an expected soft start in the first two months of our fiscal year, we saw volume growth picking up in both our industrial as well as our Gourmet segment. Despite a challenging environment, we outperformed the market. We made excellent progress in our projects leading us further in the right strategic direction».
Europe: Difficult environment in the West, growth in the East
Sales volume in Region Europe decreased by 0,8 percent to 191’832 tonnes. The debt crisis in Europe negatively impacted consumer sentiment, especially in Southern Europe. In Eastern Europe, sales volume continued to grow strongly – driven by Poland, Russia and the Baltic States. However, Eastern Europe could not fully compensate for the slight volume decrease in Western Europe. Overall, sales revenue in Region Europe increased by 1,2 percent in local currencies. In reporting currency, it declined by 8,2 percent due to negative currency impacts.
Region Americas: Strong growth across all markets and segments
Barry Callebaut achieved broad-based growth in all regional markets and across all segments. Overall, sales volumes in Region Americas grew strongly at plus 17,6 percent to 91’763 tonnes. The Food Manufacturers Products business volume rose double-digit, driven both by national and corporate accounts. Barry Callebaut´s Gourmet business strongly increased sales volume thanks to market share gains with local and global brands. Sales revenue grew 18,0 percent in local currencies and 6,9 percent in the reporting currency.
Asia-Pacific: Industrial growth limited by available capacity
Barry Callebaut increased its sales volume in Region Asia-Pacific by 2,7 percent to 13’735 tonnes led by strong performances in India, Indonesia and Malaysia. Growth in the Food Manufacturers Products business was constrained by tight capacity. Production capacity is being expanded in Singapore to support the company´s further growth in the Region. The temporary production downtimes caused by the installation of new capacity also restrained growth during the period under review. The Gourmet + Specialties Products business significantly increased its sales volume driven by the global Gourmet brands «Callebaut» and «Cacao Barry», both of which grew at double-digit rates. Sales revenue grew 1,5 percent in local currencies and decreased by 4,6 percent in CHF.
Global Sourcing + Cocoa: Higher demand and capacity expansions
Cocoa terminal market prices continuously moved downward from levels slightly over 1’900 GBP to close at 1’465 GBP on November 30, 2011. This price decrease was due to the recent bumper crop in 2010/2011 and the good start of the current cocoa campaign, as well as financial investors taking short positions and a generally well-stocked industry. A better-than-expected sugar crop in Brazil and a good start of the campaigns in Russia and India led to a downward correction of prices on the world sugar market. The sugar price in the regulated EU region for the 2011/2012 campaign stayed on its historically high level as seen throughout most of the previous campaigns. Market prices for milk powder moved sideways at historically high average levels.
Sales volume of the segment Global Sourcing + Cocoa decreased by 4,5 percent to 65’307 tonnes. Both higher internal demand for cocoa powder and ongoing capacity expansions at existing factories – which caused some down-time – led to lower sales to third-party customers. Sales revenue went up 3,2 percent in local currencies driven by high cocoa powder prices at the moment when contracting the business, decreasing by 4,1 percent in reporting currency.
Delivering on strategic direction
In the past months, Barry Callebaut closed various projects, delivering on its strategic direction: The company entered into a joint venture with P.T. Comextra Majora, a leading exporter of cocoa from Indonesia, to build a new cocoa processing facility in Makassar (Indonesia), including a long-term cocoa supply agreement. Barry Callebaut closed the sale of its European Consumer Products business Stollwerck to the Belgian Baronie Group at the end of September. More recently, the company acquired La Morella Nuts S.A., a Spanish manufacturer of nut ingredients. This makes Barry Callebaut a European leader in nut-based products, which are an ideal complement to the company´s existing Gourmet and Food Manufacturers Products business. Barry Callebaut also signed a long-term outsourcing agreement with Grupo Bimbo SAB de CV. Under the terms of this agreement, the company will supply the Mexican plants of Grupo Bimbo with up to 32’000 tonnes of chocolate and compound products annually. In addition, in December 2011 Standard + Poor´s Ratings Services assigned a BBB- credit rating (Investment Grade) to Barry Callebaut AG, up from BB+.
Outlook – Growth picking up and confident about reaching targets
CEO Juergen Steinemann: «We recently saw growth picking up in our key markets. Based on our underlying business in combination with the implementation of strategic projects, we are confident we will reach our financial targets».
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