Barry Callebaut increases global sales, despite dip in annual profits
The opening of Chocolate Academy in Shanghai China, was a key highlight for Barry Callebaut in 2022. Pic: Barry Callebaut
Barry Callebaut has reported improved sales revenues of CHF 8.1 billion for the year, up 14.6%, with general growth across its international operations, despite a downturn in profits amid notable global challenges, writes Neill Barston.
While there were positives for the Swiss-headquartered firm including 5.3% sales volume increase (and 5.9% within chocolate), backed by a 10.2% increase in operating profits to CHF 624.7 million, its net profits have been impacted by conditions including a write-down of CHF 76 million on handling the cleaning operations for the Wieze incident, as well as a further CHF 7.8 million associated with recently closing a UK production site at Moreton.
Net profit for the year stood at CHF 360.9 million, compared to CHF 384.5 million, in light of market conditions, with a sales volume growth of 5.3% to 2,306,681 tonnes for the year ended August 31, 2022.
CEO Peter Boone (left of picture below) welcomed the general upturn in sales, despite the company having faced considerable challenges including handling a salmonella outbreak at its core chocolate facilities at Wieze in Belgium this summer, as well as broader trading tests including an increase in ingredients costs fuelled by the ongoing war in Ukraine, and general retail inflation impacting on the sector.
As previously reported, the CEO believed its key focus on delivering premium confectionery and cocoa-based products, including last week’s major introduction of its ‘Second Generation’ chocolate series would prove decisive in maintaining growth in the medium and long term for the business.
In spite of these factors, Boone remained optimistic for its future, and in an annual results presentation yesterday, he offered praise to colleagues across the business, as well as to support from its customers in relation to the quick response to the salmonella case, which critically enabled the business to contain the issue without it reaching its retail chains.
Reflecting on key events of 2022, he said: “We’ve had an eventful year including celebrating the groundbreaking of an new factory in Ontario, Canada, focusing on sugar-free, high protein for us in North America, as well as extending strategic supply agreements with Hershey, and long term distribution agreement with Levapan, will help drive expansion in Latin America.
The opening of the Chocolate Box, our global distribution centre in Lokeren (Belgium), was also an important investment to improve our global distribution, and leverage the benefits of our scale. In addition, we signed a partnership with Attelli, which established our first chocolate production footprint in Morocco, as well as a chocolate academy centre there, as well as in Shanghai, so we have grown the network now to 26 such academies around the world. All in all, a lot of events that we can be very proud of.”
In terms of the company’s regional performance, for 2022, its chocolate business reported strong volume growth of 5.9% (organic 4.5%), excluding the first-time consolidation of ECC), clearly outpacing the flat underlying global chocolate confectionery market (+0.3%)4.
Furthermore, the company noted volume growth was supported by all Regions (Asia Pacific 15.8%, Americas 6.4%, EMEA 4.3%) and all key growth drivers, Outsourcing (4.8%), Emerging Markets (+7.9%) and a particularly strong performance by Gourmet & Specialties (+22.5%). Sales volume growth in Global Cocoa further normalised to 456,970 tonnes, an increase of +2.5%.
Concluding on the results themselves, Peter Boone added: “We are presenting a strong set of results, delivering profitable volume growth throughout the year, supported by all Regions and segments, particularly Gourmet & Specialties. Our broad geographic footprint and customer base, together with our sharpened business model and strong balance sheet, continued to build a solid foundation for growth.”