ZURICH, SWITZERLAND — The coronavirus (COVID-19) pandemic negatively will impact the global Gourmet & Specialties business of Barry Callebaut AG by an unknown extent, said Antoine Bernard de Saint-Affrique, chief executive officer, in an April 16 earnings call. He provided details on how that business was affected in China in February.
Because of uncertainty in the financial markets, Barry Callebaut as a precautionary decision drew the full amount of its revolving credit facility, a total of €1 billion ($1.08 billion) with a tenor of six months.
The Zurich-based company reported sales revenue of 3,762 million Swiss francs ($3,877 million) in the six-month period ended Feb. 29, which was up 2.4% from 3,673 million Swiss francs in the first half of the previous fiscal year. Sales volume rose 5.4%. Except for China in February, COVID-19 did not affect first-half results, Mr. Bernard de Saint-Affrique said.
He noted several positives. The main cocoa season in Africa is over, and COVID-19 for the moment has had less of a negative effect on volume in Barry Callebaut’s Food Manufacturing and Global Cocoa businesses.
“We expect Gourmet & Specialties volume to be particularly impacted as countries going into lockdown have shut down all restaurants, the coffee zones and most of the out-of-home activity,” Mr. Bernard de Saint-Affrique said. “The impact cannot be quantified at this stage as it depends on the length and the severity of the pandemic. However, we do expect to have a better understanding of the overall impact of COVID-19 on the company by the time of our nine-month sales publication in July.”
First-half sales volumes by business were 688,602 tonnes for Food Manufacturing, 227,578 tonnes for Cocoa and 130,515 tonnes for Gourmet & Specialties.
COVID-19’s effect on the Gourmet & Specialties business in China intensified on Feb. 13 when the country went into lockdown.
“We saw immediately a sharp slowdown of our Gourmet business and our factory, like the vast majority of Chinese factories, couldn't restart production until Feb. 20,” Mr. Bernard de Saint-Affrique said. “After the reopening, it took us about three weeks to get back to normal factory utilization. We now see a buoyant market recovery in both FM (Food Manufacturing) and Gourmet.”
Online sales have accelerated in China as well, he said.
“Whilst we cannot predict if and when the example of China can be extrapolated elsewhere, we certainly keep it in mind to make sure that we are well-prepared to serve our customers as soon as the situation improves as this day will obviously come,” Mr. Bernard de Saint-Affrique said.
Barry Callebaut continues to manufacture product for its customers. Mr. Bernard de Saint-Affrique called it a tribute to Barry Callebaut employees.
“I think there is no better testimony to their work than the fact that our operations have, to date, not experienced any major disruption and that we keep serving our customers every day,” Mr. Bernard de Saint-Affrique said. “As you know, our cocoa and chocolate products can be found everywhere: in breakfast products, in energy bars, in our cookies, all products which are foods essential. We contribute every day to keep the food chain going, and this gives all of us all the energy in the world.”