Lower cocoa prices boost Barry Callebaut FY profit

Chocolate and cocoa products manufacturer Barry Callebaut has seen its full-year profit jump almost 40%, thanks to lower cocoa prices, and extended its mid-term guidance to fiscal year 2018/19.

Net profit for the fiscal year 2016/17 grew 39.6% in local currencies or 38.3% in CHF to CHF302.9 million ($303.3m), compared to CHF219m in the fiscal year 2015/16. Recurring net profit increased by 31.3% in local currencies (up 30.1% in CHF). This, the company says, is a reflection of the strong EBIT, a stable tax rate and lower financing costs.

Sales revenue climbed 1.2% in local currencies to CHF6.81bn (up 1.9% in CHF) from CHF6.68bn, as a result of a good product mix, offset by lower cocoa bean and cocoa product prices. Sales volume rose by 4.4% to 1,914,311 tonnes, which is well above the global confectionery market growth rate of 0.1%.

The intentional phase-out of less profitable cocoa contracts, amounting to 50,000-60,000 tonnes overall, was completed; sales volume growth in global cocoa for the year was 0.4%. At the same time, the chocolate business grew by +5.6% with a strong performance in all regions.

Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, says, “We saw a good performance across all our regions and product groups at top and bottom-line level. We keep delivering on our ‘smart growth’ agenda, which is reflected in the improvement of all our group key financial metrics.”

Looking ahead, he adds, “We will continue to deliver on our ‘smart growth’ strategy. A more supportive cocoa products market and slightly improving global demand for chocolate, together with the consistent execution of our strategy, give us confidence to extend our mid-term guidance to fiscal year 2018/19: We are targeting 4-6% volume growth, and EBIT above volume growth in local currencies on average for the four-year period 2015/16 to 2018/19, barring any major unforeseen events.”