16/04/2020 | International

Barry Callebaut reports strong profitable growth

The Barry Callebaut Group, Zürich, has increased its sales volume by 5.4% to 1,103,728 tonnes in the first six months of fiscal year 2019/20 (ended on February 29, 2020). Sales revenue increased by 5.8 % in local currencies (+2.4% in CHF) to CHF 3.76 bn.  

Sales volume in the chocolate business grew by 5.2%, well above the flat global chocolate confectionery market (–0.0 %) according to Nielsen. Growth was supported by all Regions and key growth drivers: Outsourcing (+1.8%), Emerging Markets (+10.6%) and Gourmet & Specialties (excluding Beverage, +3.6%). Sales volume in Global Cocoa grew +6.5%. Excluding the first-time contribution from the consolidation of Inforum, organic growth was +4.0%.

Gross profit amounted to CHF 607.4 m, up +6.1% in local currencies (+3.2% in CHF) compared to prior-year pro-forma IFRS 16. The increase above volume growth was supported by an improved product mix. Operating profit (EBIT) recurring increased by +6.7% in local currencies (+3.1% in CHF) to CHF 311.5 m, compared to prior-year pro-forma IFRS 16. Currencies had a negative translation effect of CHF –10.9 m. The costs for the closure of the cocoa factory in Makassar, Indonesia, had a negative impact of CHF –8.0 million. As a result, the reported EBIT amounted to CHF 303.5 m, up +4.0% in local currencies (+0.5% in CHF) compared to prior-year pro-forma IFRS 166. The recurring EBIT per tonne was about stable at CHF 282. Net profit for the period recurring7grew by +11.6% in local currencies (+7.1% in CHF) to CHF 211.7 m. The reported Net profit amounted to CHF 203.7 m, up +7.5% in local currencies (+3.1% in CHF) compared to prior-year pro-forma IFRS 16. The increase was supported by the lower net financing cost, while income tax expenses remained roughly flat at CHF –49.6 m, compared to CHF –47.5 m in the prior-year period.

According to sthe statement, Barry Callebaut plays a critical role in contributing to the availability of food products during the COVID-19 pandemic. To do so, the group has put in place precautionary measures to provide safe working environments for its people and maintain business continuity. Barry Callebaut has – early on – created dedicated teams at global and regional levels who are monitoring the situation as it develops and will adjust any measures based on the guidance of governments and other relevant authorities. Barry Callebaut has to date not experienced any major disruption to its production operations. While Food Manufacturers and Global Cocoa are less affected, Gourmet sales volumes are impacted by government restrictions on the access to shops and restaurants. In China there are signals of strong demand recovery, but the overall progression of the COVID-19 pandemic remains volatile and difficult to predict. Due to the uncertainty in the financial markets, Barry Callebaut took the precautionary decision to draw the full amount of its Revolving Credit Facility (RCF), in total € 1 bn with a tenor of six months, to create an alternative to the Group’s Commercial Paper Program (equivalent to around € 450 m) and to increase access to liquidity.

Antoine de Saint-Affrique, CEO of Barry Callebaut, said: "In the context of the COVID-19 pandemic, we are taking all necessary measures to protect the health of our employees and their families. We keep contributing every day to the continuity of the global food supply chain. I would like to thank all our employees, as well as our suppliers and our customers, who are as committed, engaged and passionate as ever to produce and distribute food during this challenging time. Outlook – Committed to mid-term guidance Looking ahead, CEO Antoine de Saint-Affrique said: COVID-19 is a major unforeseen event. While we have put in place precautionary measures to support the continuation of our operations, its impact on business growth and profitability cannot be quantified at this stage as it depends on the duration and severity of the pandemic. In the meantime, we remain committed to our mid-term guidance for the period ending with fiscal year 2021/22. Our global footprint, a strong innovation pipeline, diversity in customers and channels, in combination with the diligent execution of our proven ‘smart growth’ strategy, give us a sound basis to overcome the COVID-19 pandemic."