Barry Callebaut Outperforms Chocolate Market But Profits Fall
Barry Callebaut, the world’s leading manufacturer of high quality cocoa and chocolate products, increased its sales volume by 6.7% for the first half year ended February 29, 2012 to again outperform the worldwide chocolate confectionery market. All the company’s regions and product groups contributed to the volume growth.
Barry Callebaut reported a 3% rise (up 10.4% in local currencies) in sales revenues to SFr2.48 billion but operating profit (EBIT) fell 12.5% (5.5% in local currencies) to SFr175.1 million (Eur145 million).
Significant investments in operating structures to support further growth, ramp-up costs related to recent long-term partnership and outsourcing agreements, investments in the growth of the Gourmet & Specialties Products business as well as multiple capacity expansions led to higher operating expenses, negatively impacting EBIT. Net profit from continuing operations declined by 11.3% in local currencies (-18.0% in SFr) to SFr121.8 million.
In the second quarter, Barry Callebaut’s largest region, Europe, returned to positive growth rates and reported a strong volume increase of 3.0%, compared to -0.1% for the respective chocolate market. Overall, sales revenue in Region Europe rose by 4.7% in local currencies (-3.2% in SFr) to SFr1.17 billion. Higher factory and supply chain costs as well as investments in sales and promotion, primarily in the Gourmet business, impacted operating profit (EBIT), which decreased by 12.2% in local currencies (-18.2% in SFr) to SFr114.5 million. Barry Callebaut closed the sale of its European Consumer Products business Stollwerck in September 2011. This led to a non-recurring loss of SFr 31.7 million for the reported period.
In order to readjust the structures and processes after the sale of the Consumer Products business, Barry Callebaut will spend Eur30 million for a comprehensive reengineering project, called ‘Spring’, over the next two years. The main focus of Project Spring is on Western Europe. The company expects the restructuring to yield yearly recurring efficiency gains of at least Eur10 million.
