Barry Callebaut reports half-year sales volume decline amid market challenges

The Barry Callebaut Group has reported a challenging picture for its half-year results, recording sales volumes of 1,130,742 tonnes in the first six months of fiscal year 2022/23 (ended February 28, 2023), as it restored full capacity to its core Wieze Belgian production site, reports Neill Barston.

Its latest figures came in the wake of the departure of CEO Peter Boone, who unexpectedly stepped down from his post after ten years working across the business, citing personal reasons, as his successor was named as Peter Feld.

As the company explained, the business endured a slow first quarter with volumes down 5.1%, though began to recover for the second quarter, down 0.5% as the company ramped-up to full production capacity following a salmonella incident last summer that required additional remediation measures to be put in place. As the company previously confirmed, no contaminated chocolate batches entered food chains, and it fully complied with national health and safety inspection monitoring.

Despite the dip in sales volumes, the company in fact saw a year-on-year net profit increase of 4.2% for the period, to CHF 234 million, with the company citing strong product mixes assisting in delivering an upturn in its gross profits.

There was further optimism for the business as it recently launched its second generation chocolate focused on enhanced sustainability of sourcing, and promising a ‘paradigm shift’ for its production capabilities.

According to its latest results, chocolate sales volume picked up in the second quarter in its region EMEA (up 1.8%, though for the half year was down 3.7%) and remained stable in Region Asia Pacific (+0.4%, Half Year +0.3%), though there was volume decline in Region Americas (-6.6%, Half Year -4.4%).

There were more encouraging signs from its emerging markets, (up 2% in the second quarter, -1% for the half year), and gourmet and specialties stood at +0.4% in the second quarter (-5.8% for the half year), while cocoa volume reportedly normalised and amounted to 227,773 tonnes, flat (-0.1%) year-on-year.

Assessing the situation, CFO Ben De Schryver (main image) said: In the first six months of the fiscal year we delivered strong profitability, reflecting the strength of our business model, which includes continued cost leadership in a highly inflationary environment, and good product mix. Against a high comparator, we witnessed progressive volume recovery, albeit slower than expected. This was due to the temporarily limited availability of our global brands and weaker than expected customer demand in an inflationary environment. I want to thank all colleagues for their commitment and passion in driving the business forward.

“We are confident to deliver continued strong operating profitability in the second half of the year. Due to the delayed volume growth, we now forecast the volume growth to be flat to modest for the Full Year 2022/23. Over the three years guidance6 period we expect average volume growth to be below 5% with EBIT strongly outperforming.”

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