Barry Callebaut records strong annual performance amid expansion
The Swiss-headquartered Barry Callebaut Group has recorded key growth for its latest annual results, with revenues of CHF 7.3 billion, up by a total of 7.8% amid expansion across its global operations.
Sales volumes also increased by 5.1% to 2,139,758 tonnes, with the company also delivering an upturn of 14.3% with its net profit figures (standing at CHF 394.7 million).
According to the business, the second half of the year produced notably favourable results, amid the company’s launch of its latest cacaofruit chocolate series in San Francisco recently, which Confectionery Production covered. This followed the unveiling of Ruby, the fourth type of chocolate in the US, which gained its official Stateside launch in May. It is now available in a total of more than 50 countries worldwide.
The company’s cacaofruit series has offered the business potential for an expanded portfolio of product ranges, that also includes applications across the snacks and drinks market segments. As we previously reported, the company has already forged a deal with Mondelez International for the release of regional snacks in the US, with further global use of the new series, which significantly reduces processing waste by making use of the whole cacaofruit.
Sales volumes in the chocolate business grew by 5.9%, well above the growth rate of the global chocolate confectionery market (1.8%). All Regions and key growth drivers: Outsourcing (5.2%), Emerging Markets (9.7%) and Gourmet & Specialties (excluding Beverage, 6.1%), contributed to the good momentum. Global Cocoa volumes increased by 2.4%.
As the company noted, the increase in sales revenues was supported by the first-time adoption of IFRS 154 and higher raw material prices, which the Group passes on to its customers for a large part of its business, based on its ‘cost-plus’ model.
Gross profit developed in line with the growth in sales volume and amounted to CHF 1,188.4 million, up +5.1% in local currencies (+2.7% in CHF). The positive effect from volume growth and product mix was offset by costs for structural improvements of operations.
Operating profit (EBIT) increased by 11.9% in local currencies (8.5% in CHF) to CHF 601.2 million, affected by a strong headwind from currencies (CHF -19 million). EBIT growth was more than double the volume growth, supported by all Regions and Product Groups. The Group’s EBIT per tonne continued to improve to CHF 281, an increase of 6.5% in local currencies (3.3% in CHF).
Significantly, the company expanded in the fiscal year under review across all regions, including the Europe, Middle East, Africa (EMEA) zone, with the integration of Inforum, a leading Russian B2B producer of chocolate, compound coatings and fillings, acquired in January 2019, is well on track.
Notably this April Barry Callebaut signed a Memorandum of Understanding with the Government of Serbia to build the Group’s first chocolate factory in Southeastern Europe. The plant in Novi Sad is expected to be operational by 2021 and will serve as a regional hub, driving further growth in the Southeastern European market.
In August 2019, Barry Callebaut opened its chocolate academy center in Antwerp, the 23rd globally. In the same month, Barry Callebaut announced the construction of its new Global Distribution Centre in Lokeren, Belgium, to further improve its customer service. The logistics hub is expected to be operational by 2021 and will further drive efficiency.
The Group also deepened its presence in Region Asia Pacific, e.g. by opening a further chocolate academy Center in Beijing, China, and by laying the first stone for the construction of a new chocolate and compound manufacturing facility in Baramati, India, one of the fastest growing chocolate markets in Asia.
Antoine de Saint Affrique, CEO said: “I am delighted to announce another set of strong results, with profitable growth and good cash generation. We are also proud to have successfully delivered on our mid-term guidance, which was on average 4-6% volume growth and EBIT above volume growth in local currencies for the 4-year period 2015/16 to 2018/19. On average, we have achieved above-market volume growth of +4.5% and EBIT growth in local currencies of +13.9% per year. These achievements confirm the strength of our long-term ‘smart growth’ strategy.