Barry Callebaut: Full-Year Results Fiscal Year 2017-2018

Zurich / CH. (bc) Swiss Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, announced its financial results for the fourth quarter and Fiscal Year 2017/2018 up to August 31, 2018. CEO Antoine de Saint-Affrique said: «I am delighted to announce a set of very strong results. The consistent execution of our ‘smart growth’ strategy enabled all our Regions and Product Groups to contribute to top- and bottom-line, delivering on our mid-term guidance». Overview:

• Sales volume up +6.3 percent, well above the market growth, first time over 2 million tonnes
• Sales revenue of CHF 6.9 billion, up +0.1 percent in local currencies (+2.1 percent in CHF)
• Operating profit (Ebit, recurring) up +21.2 percent in local currencies (+25.3 percent in CHF)
• Net profit (recurring) up +31.0 percent in local currencies (+35.9 percent in CHF)
• Free cash flow of CHF 311.9 million
• On track to deliver on mid-term guidance
• Board member James (Jim) Donald will not stand for reelection. Suja Chandrasekaran, Angela Wei Dong and Markus Neuhaus proposed as new Board members
• Proposed payout to shareholders of CHF 24.00 per share, up +20.0 percent

In fiscal year 2017/18 (ended August 31, 2018) the Barry Callebaut Group – the world’s leading manufacturer of high-quality chocolate and cocoa products – increased its sales volume by +6.3 percent to 2,035,857 tonnes, significantly above the growth rate of the global chocolate confectionery market (+1.8 percent). Growth was broadly based with strong contributions from all key growth drivers: Emerging Markets (+9.1 percent), Gourmet + Specialties (+7.7 percent) and Outsourcing (+5.6 percent). Global Cocoa achieved a solid volume growth of +3.9 percent.

Sales revenue was flat, +0.1 percent in local currencies (+2.1 percent in CHF), at CHF 6,948.4 million, as a result of lower raw material prices, which the Group passes on to its customers for a large part of its business.

Gross profit improved by +17.2 percent in local currencies (+20.7 percent in CHF) to CHF 1,157.1 million. This increase was driven by volume growth and a better product and customer mix across all Regions and Product Groups.

Operating profit (Ebit, recurring) increased by +21.2 percent in local currencies (+25.3 percent in CHF) to CHF 554.0 million. The increase was supported by all Regions and Product Groups and outpaced volume growth. The Group had a strong Ebit per tonne performance of CHF 272.1, an increase of +14.0 percent in local currencies (+17.8 percent in CHF).

Net profit for the year (recurring) grew by +31.0 percent in local currencies (+35.9 percent in CHF) to CHF 357.4 million. This increase can be attributed to the strong Ebit growth, as well as lower net finance costs, and despite higher income tax expenses due to a one-off impact of tax reforms in Belgium and the US.

Net working capital increased to CHF 1,074.4 million, compared to CHF 1,042.5 million in prior year. The increase is largely in line with the Group’s growth. The effect of higher inventory, trade receivables and other current assets and somewhat lower trade payables and other current liabilities was largely offset by a corresponding increase in net derivative financial liabilities.

Free cash flow amounted to CHF 311.9 million, compared to an exceptionally strong CHF 475.6 million in the previous fiscal year, which had benefited from decreasing cocoa bean prices and some positive one-off items.

As a result, net debt was further reduced to CHF 1,074.3 million (-3.3 percent) from CHF 1,110.9 million in the prior year.

Outlook – Continued execution of the ‘smart growth’ strategy

Looking ahead, CEO Antoine de Saint-Affrique said: «The continued execution of our ‘smart growth’ strategy, good visibility on volume growth and healthy global demand give us confidence that we are well on track to achieve our mid-term guidance.»