Barry Callebaut: difficult market conditions in Germany

Barry Callebaut AG, Zürich announced its results for the nine-month period of fiscal year 2004/05 ended May 31, 2005. Chocolate is a seasonal business and the third quarter is usually the slowest period for Barry Callebaut. Sales volumes went up 4%, of which two-thirds were organic growth. Sales revenue declined by 2.5% as a reflection of lower cocoa bean prices and adverse currency effects. Operating profit before amortization (EBITA) increased by 2% to CHF 197.3 million. Net profit (PAT) jumped by 29% to CHF 101.8 million, partly due to a change in IFRS accounting standards. On a like-for-like basis the increase was a strong 7%, in constant currency terms the increase was 10%. Patrick De Maeseneire, CEO of Barry Callebaut, said: “We are pleased that our traditional businesses with industrial and artisanal customers continue to do very well in a highly competitive environment. They have contributed overproportionately to the Group’s operating profit. Our European consumer business, on the other hand, is still suffering from difficult market conditions, an unfavorable business mix and price pressure. This situation, together with the opportunity to realize additional cost savings, led us to intensify the current restructuring program in Germany. The goal is to make our consumer business the cost leader and to prepare it for profitable growth
as of 2006/07, especially in Customer Label Solutions.”