Barry Callebaut posts 11% sales growth, while operating profits drop amid challenging global markets
Swiss-headquartered Barry Callebaut has reported six-month sales growth of 11.1% to CHF 4.6 billion, amid a challenging backdrop that also saw its operating profit drop by 40% to CHF 178million for the period, which it attributed to investment in company restructuring, reports Neill Barston.
Net profit for the business stood at 76 CHF million, compared to 234 CHF million, with its separately reported net recurring profit for the period recorded at CHF 215 million, compared against CHF 234 million gained at the same time last year.
The business, which is set to return to this year’s Sweets & Snacks Expo between 14-16 May in Indianapolis after not being an exhibitor at this year’s ISM in Cologne as it had previously been until the pandemic, stated that its global chocolate business delivered 1% growth against a wider market that was declining according to Nielsen figures ( showing a -2.0% drop), as manufacturers continue to be impacted by weakened consumer demand owing to the ongoing cost of living criss that has been heavily impacted by inflation within retail markets.
Its results have been delivered in the wake of spiralling cocoa costs, reaching $10,000 a tonne on the New York Futures market, causing widespread concern within the sector, with prices standing at triple what they had been just 12 months ago.
However, the company confirmed that it was able to mitigate for some of these circumstances with a diversified business model shifting towards private label chocolate offerings, as well as gourmet and specialties recorded high single-digit volume growth, with continued strong demand across regions, supported by its BC Next Level initiatives.
Volume growth was up by 0.7% to 1.1 million tonnes for the first six months of the year, with chocolate markets were strongest in Western Europe (up 2.2% for volume growth), with central and Eastern Europe, as well as Turkey also reportedly showing an encouraging picture. However, demand in the US was down by 1.9%, as manufacturers continued to grapple with high inflation costs, as well as key ingredient sourcing challenges within cocoa supply chains.
As previously reported by Confectionery Production, the company is putting forward plans that could see up to 2,500 jobs lost across its global operations during the next 18 months, against ongoing market challenges.
Peter Feld, CEO of the Barry Callebaut Group, acknowledged that the past twelve months had been a difficult period of trading for the company, but he believed that its restructuring plans, based upon its BC Next Level, digital strategy would prove effective.
He said: “In a very disruptive external environment, we delivered a solid financial performance. With our integrated and diversified business model as well as our strong balance sheet, we remain a reliable partner for our customers. We retain some caution given the extraordinary price spikes over the past six months and potential implications for our customers and supply partners.
Our strategic investment program BC Next Level is the cornerstone of Barry Callebaut’s future success and we are tracking to plan. We are making our business more resilient by bringing us even closer to our customers, streamlining operations and accelerating our digital transformation. Besides investments in areas that matter most to our customers, we are implementing efficiency measures to streamline our structures and avoid double-work. We are currently in discussions with our social partners for the implementation of key activities and we are fully committed to supporting all of our employees who may be affected by our plans.”
