Reporting its results for the first half of its fiscal year 2012/2013, Barry Callebaut said that it has seen strong volume growth – “significantly outperforming the global chocolate market” - improved product margins, and has continued to invest in future growth.
Sales volume was up by 7.8%. However, because Barry Callebaut works with 80% of its customers on a ‘cost plus’ basis, lower average prices for cocoa ingredients (cocoa beans, cocoa butter, and cocoa powder) compared to the previous year translated into a 2.6% reduction in sales revenue. Product margins improved; gross profit was up 4.9% in local currencies (+5.5% in CHF). EBIT decreased by 2.4% in local currencies (-2.1% in CHF).
The company said that its closing and integration plan for the Cocoa Ingredients Division acquisition from Petra Foods was well on track, and confirmed its growth targets.
"We continued to deliver strong volume growth, significantly outperforming the global chocolate market,” said Juergen Steinemann, CEO of Barry Callebaut. “We grew in all regions and product groups thanks to our strategic growth drivers outsourcing, Gourmet and emerging markets. We were able to improve our product margins. Our EBIT was impacted by the unfavorable combined cocoa ratio as well as additional factory and supply chain costs due to our strong growth in some regions causing capacity constraints. We continued to invest in the expansion of our global footprint, structures and processes."
Net profit for the period from continuing operations decreased by 7.7% in local currencies (-7.4% in CHF) to CHF 116.4 million, mainly as a result of the lower EBIT in combination with an increase in net financial expenses and taxes.
"Based on our four strategic pillars - expansion, innovation, cost leadership and sustainable cocoa - we will continue to deliver robust volume growth,” continued Steinmann. “The focus on product margins will remain important. We expect cocoa processing results to increase in the second half of our fiscal year. Our cost base will grow at a slower pace than volume, except for non-recurring costs related to the closing and integration of the acquisition of the Cocoa Ingredients Division from Petra Foods. Considering all this, we are confident of delivering on our mid-term guidance."
In December, Barry Callebaut announced its intention to acquire the Cocoa Ingredients Division of Petra Foods in order to support the further growth of its chocolate business. This transaction will boost Barry Callebaut's presence in fast growing emerging markets to almost one-third of the Group's sales volume and enable the company to capitalise on the attractive growth rates in these markets for cocoa powder-based applications in beverages, compound chocolates, fillings, bakery products and ice cream. In addition, the acquisition will strengthen Barry Callebaut's current and future partnership agreements as there is a trend towards combined contracts (cocoa and chocolate products). It will also add Asia as a strong sourcing base next to West Africa.
In January Barry Callebaut strengthened its position in Scandinavia through the acquisition of ASM Foods in Sweden from Danish Carletti. With ASM Foods, Barry Callebaut believes it is enhancing its portfolio of higher-margin products such as specialty compound chocolates, fillings and inclusions for both its industrial and Gourmet business. In the same transaction, Carletti became Barry Callebaut's first outsourcing partner in Scandinavia. In addition, the Group signed its first outsourcing agreement in South America with Arcor Group in Chile.
In terms of geographic expansion, four factories are currently under construction - a chocolate factory in Eskisehir, Turkey and a cocoa factory in Makassar, Indonesia (both going on stream in fall 2013) as well as two chocolate factories in Santiago de Chile and in Takasaki, Japan, scheduled to be operational in the first half of 2014.
The completion of the sale of the Dijon factory in November 2012 marked the final step in the disposal of all consumer activities.
Reporting its results for the first half of its fiscal year 2012/2013, Barry Callebaut said that it has seen strong volume growth – “significantly outperforming the global chocolate market” - improved product margins, and has continued to invest in future growth.
Sales volume was up by 7.8%. However, because Barry Callebaut works with 80% of its customers on a ‘cost plus’ basis, lower average prices for cocoa ingredients (cocoa beans, cocoa butter, and cocoa powder) compared to the previous year translated into a 2.6% reduction in sales revenue. Product margins improved; gross profit was up 4.9% in local currencies (+5.5% in CHF). EBIT decreased by 2.4% in local currencies (-2.1% in CHF).
The company said that its closing and integration plan for the Cocoa Ingredients Division acquisition from Petra Foods was well on track, and confirmed its growth targets.
"We continued to deliver strong volume growth, significantly outperforming the global chocolate market,” said Juergen Steinemann, CEO of Barry Callebaut. “We grew in all regions and product groups thanks to our strategic growth drivers outsourcing, Gourmet and emerging markets. We were able to improve our product margins. Our EBIT was impacted by the unfavorable combined cocoa ratio as well as additional factory and supply chain costs due to our strong growth in some regions causing capacity constraints. We continued to invest in the expansion of our global footprint, structures and processes."
Net profit for the period from continuing operations decreased by 7.7% in local currencies (-7.4% in CHF) to CHF 116.4 million, mainly as a result of the lower EBIT in combination with an increase in net financial expenses and taxes.
"Based on our four strategic pillars - expansion, innovation, cost leadership and sustainable cocoa - we will continue to deliver robust volume growth,” continued Steinmann. “The focus on product margins will remain important. We expect cocoa processing results to increase in the second half of our fiscal year. Our cost base will grow at a slower pace than volume, except for non-recurring costs related to the closing and integration of the acquisition of the Cocoa Ingredients Division from Petra Foods. Considering all this, we are confident of delivering on our mid-term guidance."
