FDBusiness.com

Despite achieving strong volume growth and increasing sales by 11.5% in local currencies and by 8.3% in Swiss Francs to SFr4.83 billion (Eur4.0 billion) in the year ended August 31st 2012, Barry Callebaut has reported a sharp drop in net profit including discontinued operations of SFr142.6 million, compared to SFr176.8 million in prior year.

Sales volume grew by 8.7% to 1,378,856 tonnes with all product groups contributing ot the growth. Barry Callebaut’s growth was significantly higher than the global chocolate market growth. It was driven by the company’s core business, the Food Manufacturers Products business, including long-term partnership agreements. Specialties products and emerging markets also supported growth. Barry Callebaut’s Gourmet business considerably outpaced the respective local market growth.

In order to support current and future growth, Barry Callebaut invested significantly in structures, factory expansions, its Gourmet business, ramp-ups related to strategic partnership agreements, and in ‘Sustainable Cocoa’. An accelerated demand as well as capacity constraints in some areas resulted in higher operating and supply chain costs. All these factors affected the company’s operating profit (EBIT) – EBIT increased 1.0% in local currencies (-2.5% in SFr) to SFr353.2 million. A lower EBIT (in SFr), higher financing costs as well as a less favorable tax mix led to a decrease in net profit from continuing operations (-5.2% in local currencies, -8.5% in SFr) to SFr241.1 million.

“Despite the current, rather difficult economic environment, especially in Western Europe, we remain positive on delivering on our strategy and reaching our targets. Therefore, we have renewed our mid-term guidance of on average 6-8% growth in volume and EBIT until 2014/154,” says Juergen Steinemann, chief executive of Barry Callebaut. “Our main priority for the next fiscal year is to finalise the various investments in capacities and structures. This will create a sound basis for profitable growth. Other priorities are managing our continued growth through long-term partnerships, Gourmet and emerging markets as well as further increasing our operational efficiency with project ‘Spring’ in Western Europe. We also aim to bring additional innovations to the market and further invest in our sustainability initiative ‘Cocoa Horizons’.”