Barry Callebaut nets strong sales despite waning market

Barry Callebaut nets strong sales despite waning market

Sales volume increased by 15 percent in the Americas region, compared to a 4 percent contraction in the U.S. chocolate market.

With a sales volume increase of 6.6 percent to 1,037,313 tonnes in the first nine months of fiscal year 2011/12, Barry Callebaut AG, the world’s leading manufacturer of high quality cocoa and chocolate products, significantly outperformed the global chocolate market. In the last three months the company’s sales volume grew 6.5 percent, maintaining the growth rate reported in the first half year. Growth in Q3 was driven by the Food Manufacturers Products business with market share gains and the implementation of long-term partnership agreements. Year-to-date, all Regions showed positive growth rates, led by the Food Manufacturers Products business in Americas and emerging markets. The Gourmet & Specialties Products business performed well in all Regions except in the difficult Western European markets, where it also was affected by lower volumes in the Beverages division. Sales revenue increased by 8.4 percent in local currencies to CHF 3,593.1 million (+2.3 percent in CHF).

Juergen Steinemann, CEO of Barry Callebaut, said: “We are very satisfied with the overall strong growth in all of our Regions and across all of our Product Groups given the challenging market environment in Western Europe. Our project ‘Spring’ for reviewing all our customer-related structures and processes in Western Europe, our additional sustainability initiative “Cocoa Horizons” as well as the implementation of the recent long-term partnership agreements are all well on track.”

Region Europe – Growth driven by Food Manufacturers Products business and Eastern Europe
In Europe, the chocolate confectionery market increased by 1.7 percent. Barry Callebaut outperformed the market with 3.7 percent volume growth to 531,439 tonnes. In Western Europe the main growth driver was the Food Manufacturers Products business where the company saw higher demand in chocolate specialties products. The Gourmet & Specialties Products business reported good growth; overall regional growth was, however, affected by the economic situation in Southern Europe. In Eastern Europe, Barry Callebaut continued to achieve double-digit growth both in its Food Manufacturers Products and Gourmet business. Sales revenue in the Region rose 4.0 percent in local currencies (-3.4 percent in CHF) to CHF 1,695.8 million.

Region Americas – Strong growth across all Product Groups
Once again, Region Americas was the strongest Region in terms of volume growth: Sales volume increased by 15.0 percent to 264,500 tonnes, compared to a 4.0 percent contraction in the U.S. chocolate market. In North America, both Corporate and National Accounts of the Food Manufacturers Products business showed double-digit volume increases driven by outsourcing volumes and market share gains. Also the Gourmet business sustained its double-digit growth rate, supported by additional distribution points as well as first signs of a gourmet market recovery. Both Mexico and South America remained on track with strong volume growth versus last year. Sales revenue in the Region increased 13.8 percent in local currencies (+9.4 percent in CHF) to CHF 810.2 million.

Region Asia-Pacific – Accelerated volume growth
Asian chocolate markets grew by 6.3 percent. Barry Callebaut strongly accelerated its sales volume growth in the Region with +12.3 percent to 43,620 tonnes. The Food Manufacturers Products business reported double-digit growth across all countries, supported by strategic as well as local customers. Also the Gourmet business developed well in the Region with both its global and local brands. Barry Callebaut is finalizing chocolate capacity extensions in Kuala Lumpur and Singapore. Sales revenue in the Region increased 6.9 percent in local currencies (+4.1 percent in CHF) to CHF 176.8 million.

Global Sourcing & Cocoa – Growing with strategic partners
In the recent months, the cocoa price moved in a narrow band of GBP 1,450 and 1,550 with little activity. There will be more clarity on the crop and future price developments after the current rainy season has come to an end. The world sugar market showed a strong downward correction, reaching a 20-month low. In contrast, EU sugar prices increased due to a structural deficit and market measures by the EU. Dairy market prices stabilized after a phase of continuous decline triggered by very good milk supply worldwide. Recently prices started to slightly move higher again.

The segment Global Sourcing & Cocoa increased its sales volume by 3.3 percent to 197,754 tonnes, positively impacted by the growth with the company’s strategic partners. Barry Callebaut continued to invest in its grinding capacities across all Regions to prepare the further implementation of the recently signed long-term partnership agreements. Sales revenue of the segment increased strongly by 13.0 percent in local currencies (+7.4 percent in CHF) to CHF 910.3 million driven by higher average cocoa powder prices.

Other developments/highlights
As part of capacity expansions in North America, Barry Callebaut entered into an agreement to purchase the assets of the Chatham, Ontario facility of Batory Industries Company in early June, adding new chocolate and compound capacity in the Midwest. The company also renewed and extended a long-term supply agreement with the Japanese company Morinaga. As part of the agreement, Barry Callebaut will build a new chocolate and compound factory near Tokyo.

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