Barry Callebaut earnings rise in 'flat' market
November 4, 2010
by Jeff Gelski
ZURICH, SWITZERLAND — Both EBITDA and revenue grew for Barry Callebaut AG in the fiscal year ended Aug. 31 even though growth in the global confectionery market was basically fat. Barry Callebaut’s EBITDA of 470.7 million Swiss francs ($488.3 million) compared with 456.1 million Swiss francs ($473.2 million) in the previous fiscal year.
Fiscal-year revenue of 5,213.8 million Swiss francs ($5,406.4 million) compared with 4,880.2 million Swiss francs in the previous fiscal year. Barry Callebaut had double-digit percentage gains in sales in the geographic regions of the Americas (15.6%), Asia-Pacific (15.5%) and Eastern Europe (11.1%). The global chocolate confectionary market overall grew at a rate of 0.3%. The strong Swiss franc had an unfavorable impact on sales revenue, operational profit (EBIT) and net profit for Zurich-based Barry Callebaut.
“Market conditions were challenging with a still rather fragile world economy, a flat global chocolate market, high raw material prices and important currency fluctuations,” said Juergen Steinemann, chief executive officer of Barry Callebaut. “Our growth strategy based on the three pillars of expansion, innovation and cost leadership, together with our robust business model, have allowed us to cope well with all these market challenges.”
The Americas regions had fiscal-year EBITDA of 108.1 million Swiss francs, up from 100.9 million Swiss francs in the previous year, and fiscal-year sales revenue of 998.2 million Swiss francs, up from 901.1 million Swiss francs. Long-term outsourcing and supply agreements with key corporate accounts, as well as growth in the Gourmet business, drove sales volume growth of 16% to 291,399 tonnes. Volume growth in both Food Manufacturers and Gourmet & Specialties Products business drove a rise in operating profit (EBIT) of 6.3% in local currencies to 92.5 million Swiss francs. Infrastructure investments, including start-up costs for a new chocolate factory in Brazil, partly offset the volume growth.
Global Sourcing & Cocoa had fiscal-year EBITDA of 75.2 million Swiss francs, up from 72.6 million Swiss francs in the previous fiscal year, and fiscal-year sales revenue of 962.5 million Swiss francs, up from 748.9 million Swiss francs. Higher cocoa bean prices and higher volumes drove sales revenue growth.
“There was high demand for cocoa powder since the market segments using cocoa powder as an ingredient — mainly the bakery, ice cream and beverage industries — did not suffer as much from the global economic crisis as the chocolate confectionery market where cocoa butter is used to a great extent,” Barry Callebaut said.
Going forward, Barry Callebaut plans to manage its Gourmet & Specialties business as a unit independent from but interdependent with its industrial business. Barry Callebaut will appoint management teams for its Gourmet & Specialties businesses in western Europe and North America, and the management teams will have their own profit and loss responsibility. The Gourmet & Specialties business will remain interdependent with the industrial factories and benefit from their scale and manufacturing efficiency.