Barry Callebaut posts annual growth despite market challenges
Barry Callebaut’s annual results have posted a 0.1% increase in sales revenue, to CHF 6.9 billion, and a net 31% rise in profits, to CHF 357.4 million, supported by growth in key global markets.
The Swiss-headquartered chocolate and cocoa product manufacturer also increased its sales volume by 6.3%, to 2,035,857 tonnes, which represented a 1.8% figure above the international industry performance.
During the past year, the business has made a number of core product investments including the global introduction of its flagship ruby chocolate variety. This gained significant global media attention, alongside the development of its RB1 gourmet version aimed at professional chefs.
There has also been a key launch of its 1% added sugar product, known as Eclipse, which the manufacturer believes will have a significant impact on the market.
The company said that its results represented its strongest annual performance to date, and its net profit increase was backed by a corresponding upturn in operating profit, which was welcomed by the company’s CEO Antoine de Saint-Affrique.
According to the business, its revenue performance was due to lower raw materials prices, which it passes on to customers in the majority of instances.
Cocoa bean prices increased over the course of the past financial year by 10.9%, from £1,524 per tonne in September 2017, to £1,688 per tonne in August 2018. However, the average price for 2017/18 was in fact 6.8% lower than that of the 2016/2017 year. This was attributed to a more balanced cocoa bean crop.
There was also a reported decrease of 13.9% in sugar prices, due to a reported global surplus in production, which further influenced the company’s results.
One of the company’s strongest areas of performance was in the Region America, where sales volumes increased by 6.0%, to 549,287 tonnes. It noted this was well ahead of wider market growth of 0.7% within the territory.
Sales revenues rose 3.3% to CHF 1,7 billion. Its work included concluding the acquisition of Gertrude Hawk Ingredients, a leading specialties and decorations.
Meanwhile, in Asia Pacific, there was also a sales volume increase of 16.2% to 105,777 tonnes. Its performance was driven by growth in in China, Japan and Indonesia. Sales revenue rose by 6.6%.
The company also saw success with its gourmet business, as well as investing in expansion of its chocolate production capacity in Singapore.
Within the EMEA region, the company’s revenue performance remained flat, with revenues remaining consistent with the previous year at CHF 3.07 billion.
Sales volume in the region increased by 6.8% to 925,144 tonnes, while the chocolate confectionery market grew by a total of 1.9%.
The company reported that in Western Europe, sales volume growth was strong as a result of good growth within both food manufacturers and gourmet markets.
In Eastern Europe, Middle East, Africa, sales volume recorded a strong double-digit increase driven by gourmet and food manufacturers, as well as a diversification of the customer base.
Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, believed the results showed strong evidence for overall growth.
He said: “I am delighted to announce a set of very strong results. The consistent execution of our ‘smart growth’ strategy enabled all our Regions and Product Groups to contribute to top- and bottom-line, delivering on our mid-term guidance.
“The continued execution of our smart growth’ strategy, good visibility on volume growth and healthy global demand give us confidence that we are well on track to achieve our mid-term guidance.”