Barry Callebaut: solid and profitable growth

Barry Callebaut AG again outpaced the global chocolate market (grew by 3.1% per annum in volume, source: Nielsen, September 2010 – August 2011) with an increase in sales volume of 7.2% to 1,296 million tonnes in the last fiscal year 2010/11 ended August 31, 2011. According to the company all Regions and Product Groups contributed to this growth. Food Manufacturers Products showed good growth driven by higher demand for specialties products and fillings. Emerging markets performed at double-digit growth rates.

The Gourmet business achieved strong growth, especially in Asia-Pacific and Europe. All Gourmet segments contributed to the growth. The global Gourmet brands Cacao Barry® and Callebaut® performed well above market growth. Global Sourcing & Cocoa significantly increased its volume, driven by the strong demand for cocoa powder as well as sales of cocoa products to strategic customers. The weakening of various currencies against the Swiss franc – Barry Callebaut’s reporting currency – negatively impacted both sales revenue and operating profit (EBIT).

In local currencies, sales revenue rose strongly by 13.3% (+ 0.7% in CHF) to CHF 4.554 bn, driven by the volume increase and by higher raw material prices. Operating profit (EBIT) went up significantly by 15.3% in local currencies (+ 5.7% in CHF) to come in at CHF 360.6 million. Net profit for the year from continuing operations rose by 19.8% in local currencies (+ 9.0% in CHF) to CHF 258.9 million, benefiting from the higher operating result in combination with lower income tax expenses. Net profit for the year including discontinued operations amounted to CHF 176.8 million, compared to CHF 251.7 million in prior year. The reduction is attributable to the non-recurring loss of CHF 82.1 million for the discontinuation of the European Consumer Products business.

Consumer demand for chocolate is growing – on long-term average by 2-3% per annum. Despite the recent bumper crop of 2010/11, Barry Callebaut sees significant challenges ahead in securing sufficient supplies of high quality, responsibly grown cocoa to meet future chocolate demand. The company added a new, fourth strategic pillar called ‘Sustainable Cocoa’ to its current three pillars Expansion, Innovation and Cost Leadership to address this challenge and underline the importance of its activities in the area of sustainability. With this fourth strategic pillar, Barry Callebaut aims to intensify its efforts in direct cooperation with the farmer communities to increase cocoa yields and the respective quality, acting through its existing direct sourcing programs such as the Quality Partner Program (QPP) and Biolands. Various initiatives such as Farmer Practices, Farmer Education and Farmer Health will also enable the company to scale up its certified volumes.

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