Barry Callebaut reports Q4 upturn after unprecedented conditions during 2020
The Barry Callebaut Group has reported a fourth quarter recovery of 4% in its annual trading results, after the business acknowledged “unprecedented conditions” had impacted upon revenues for the first half of its financial year, writes Neill Barston
Speaking at a press briefing on its results, CEO Antoine de Saint-Affrique praised the efforts of the company’s employees around the world, as it continues to grapple with turbulent cocoa markets, and has been affected by retail channel closures amid the coronavirus pandemic.
Consequently, for the fiscal year 2019/20, Barry Callebaut’s sales volume declined by 2.0% to 2,095,982 tonnes, due to the COVID-19 pandemic. However, the business said that it was confident this represented a ‘one-off situation’ due to wider global conditions. Net profit for the year stood at CHF 319.3 million, down by a total of 13.3%.
As the Swiss-headquartered firm noted, after a 14.3% decline in the third quarter at the height of the pandemic, sales volumes had revealed an anticipated recovery in the fourth quarter by 4.3%. Sales volume in the chocolate business declined by 2.1% in the fiscal year. This was reflected in the fact that underlying confectionery market dipped by 0.3%, according to Nielsen.
Similarly global cocoa volumes were down 2.0%, with the business stating at a press briefing that market conditions remain uncertain for the key commodity, which remains a key supplier for the confectionery sector.
During fiscal year 2019/20, it was reported that cocoa bean prices fluctuated between £1,560 and £2,045 per tonne and closed at £1,762 per tonne on August 28, 2020. On average, cocoa bean prices increased by 6.3% against the previous year. This comes amid the introduction of the Living Income Differential in key producer nations of Ghana and Ivory Coast, which involves additional payments from confectionery manufacturers of $400 dollars per tonne of cocoa, which came into effect after the period covered by these figures, from October.
Commenting on the results, Antoine de Saint-Affrique (pictured at last year’s Wholefruit Chocolate launch in San Francisco), added: “I am proud of the solid set of results and strengthened balance sheet that we managed to deliver in unprecedented times. They are testimony to the strength and resilience of Barry Callebaut, its employees and its culture. Our focus on care, continuity and cash helped us to safeguard the health of our people and communities, to serve our customers well at a time when they need it most, and to enhance the financing of our company.
“Although markets are still volatile, we will further pursue expansion and drive for new opportunities, thanks to our continued focus on customers and our strong innovation pipeline. This, together with our solid financial basis, supports the confidence in our mid-term guidance.”
The business noted a number of key strategic developments during the past year, including completing the acquisition of GKC Foods in Australia, adding a fourth production line to the Senoko plant in Singapore, began developing facilities in Ecuador, as well as revamping its UK academy centre in Oxford.
Another notable breakthrough for the group came in October, with the Callebaut brand introducing its remastered Finest Belgian Chocolate range, improving taste and optimising workability. In addition, artisans can now tell their own bean-to-bar story by tracing the 100% sustainable cocoa bean selection back to the cocoa farming communities.
Furthermore, after successfully serving as Chief Financial Officer (CFO) of the Barry Callebaut Group for three years, Remco Steenbergen will leave the group as of December 31, 2020, to become CFO of airline business Lufthansa, and was thanked for his efforts in helping strengthen the business. The Board of Directors has appointed Barry Callebaut’s current President Asia Pacific and member of the Executive Committee, Ben De Schryver, as new CFO effective January 1, 2021.
Belgian-born Ben De Schryver has been with Barry Callebaut since 1999. He has been President of Barry Callebaut in Region Asia Pacific since September 2016 and has been a member of the Group’s Executive Committee since September 1, 2017. Under his leadership Region Asia Pacific has reportedly achieved four consecutive years of solid growth, combined with strong profitability.