Barry Callebaut: Announces 9-Month Key Sales Figures Fiscal Year 2014/2015

Zurich / CH. (bc) Swiss Barry Callebaut Group, the world´s leading manufacturer of cocoa and chocolate products, announced its 9-month key sales figures of fiscal year 2014/2015 (that ended May 31). CEO Juergen Steinemann: «I am pleased with our volume growth in the last nine months. With plus 2.5 percent we significantly outperformed the global chocolate confectionery market which declined by minus 2.1 percent, currently affected by recent price increases for consumer products and rather soft economies across the globe. Our growth was broadly based, supported by our growth drivers outsourcing, emerging markets and Gourmet + Specialties Products».

In the first nine months of fiscal year 2014/2015, the Group grew its sales volume by plus 2.5 percent to 1’320’714 tonnes. The company accomplished this growth amidst a global confectionery market that decreased by minus 2.1 percent.

Barry Callebaut achieved good growth in its chocolate business across all Regions fuelled by the company’s growth drivers (outsourcing, emerging markets and Gourmet + Specialties Products). Due to the still challenging cocoa products market, Barry Callebaut did not actively increase its sales in the Global Cocoa segment. Both the Food Manufacturers (plus 2.9 percent) as well as the Gourmet + Specialties Products business (plus 4.9 percent) delivered solid results.

Sales revenue of the Group increased by plus 12.0 percent in local currencies (plus 7.6 percent in CHF) to 4’644.8 million CHF, driven by stronger sales of Gourmet and specialties products resulting in a more favourable product mix and higher cocoa bean prices compared to last year.

Outlook – Volume growth to continue

Looking ahead, CEO Juergen Steinemann, said: «As communicated, we expect sales volume to gain more momentum in the fourth quarter of the fiscal year. We will keep on navigating carefully through the challenging cocoa market. Overall, we continue to see ample opportunities for further growth and all our growth drivers will support our sustained significant out-performance of the global chocolate market. We maintain our current guidance».

Strategic milestones in the first nine months of fiscal year 2014/2015

• Expansion: Acquisition of the assets from American Almond, a leader in the U.S. in artisanal nut-based ingredients, underlining Barry Callebaut’s strategic intention to grow in adjacent ingredients products. Signing of a long-term chocolate outsourcing agreement with GarudaFood Group, one of the largest food and beverage companies in Indonesia. In order to support the further expansion of its Gourmet business, Barry Callebaut opened its 19th «Chocolate Academy» center in Tokyo.
• Innovation: Barry Callebaut opened its first Cocoa Application Center in Asia Pacific. Built in Pasir Gudang (Malaysia) next to one of its largest cocoa factories in the region, the new center adds prototype and concept development as well as cocoa product and ingredient research capabilities to the Group’s innovation offering for industrial customers.
• Cost Leadership: After three years of significant investments in footprint, structures and processes, Barry Callebaut introduced tight cost and cash flow control as well as productivity measures this year. Additional expenses are limited to targeted cost areas such as Gourmet, supply chain optimization and emerging markets. Excluding these investments, costs declined on a comparable basis.

Region Europe – Maintaining good volume growth in Western Europe

Total sales volume in Region Europe rose by plus 2.5 percent to 567’204 tonnes, significantly above the market growth rate of minus 2.0 percent. In Western Europe, Barry Callebaut’s sales volume maintained its growth pace, supported by a strong development in the Food Manufacturers business and a double-digit increase in the Beverages business. The Gourmet business outperformed a flat market. The business in EEMEA was still influenced by the difficult political and economic environment in Russia. Total sales revenue for the Region was up plus 10.7 percent in local currencies, mainly due to the higher volume, a more favorable product mix as well as higher cocoa bean prices. In CHF revenue increased by plus 0.7 percent to 1’937.2 million CHF, impacted by a negative currency translation effect.

Region Americas – Accelerated growth momentum

In Region Americas, sales volume growth accelerated significantly in the third quarter (plus 7.4 percent), increasing by plus 3.7 percent to 339’912 tonnes for the nine-month-period, well above the market which decreased by minus 2.5 percent. In NAFTA, growth was driven by Barry Callebaut’s regional accounts; the Gourmet + Specialties business showed good growth. South America again recorded strong, double-digit growth across all Product Groups and in all countries. Total sales revenue in the Region went up by plus 13.2 percent in local currencies, as a result of an improved product mix and higher cocoa bean prices. Sales revenue in the reporting currency CHF increased by plus 18.8 percent to 1’101.7 million CHF, due to good volume growth as well as a positive currency translation effect.

Region Asia Pacific – Growth gaining momentum

Despite a weak chocolate market (minus 1.5 percent), total sales volume growth in Region Asia Pacific accelerated by plus 8.7 percent in the third quarter, growing in total by plus 6.7 percent to 52’357 tonnes in the first nine months. Main contributors were the local industrial customers as well as the two global Gourmet brands «Callebaut» and «Cacao Barry». Sales revenue in the Region rose by plus 11.6 percent in local currencies (plus 9.6 percent in CHF) to 205.7 million CHF, as a result of the good volume growth, an improved product mix and higher cocoa bean prices.

Global Cocoa – Challenging market environment continues

Sales volume growth in the segment Global Cocoa was flat at plus 0.8 percent to 361’241 tonnes for the nine-month period. In light of a further deterioration of the combined cocoa ratio, Barry Callebaut did not proactively pursue growth with third-party customers and gave priority to internal needs. Sales revenue increased by plus 13.4 percent in local currencies (plus 9.4 percent in CHF) to 1’400.2 million CHF, mainly reflecting the higher average cocoa bean and powder prices.

Price developments on the most important raw material spot markets

Despite an expected slight supply surplus for the 2014/2015 cocoa season, cocoa bean prices increased in the period under review by around plus 4.0 percent to GBP 2’100 on May 29, 2015. Price increases were mainly driven by financial market participants. World market sugar prices continued their downward trend as a result of funds building short positions, a further weakening of the Brazilian Real, producers selling into the market and India realizing a record production. European sugar prices were flat, the market bottoming out at relatively low levels. Favorable weather conditions led to an overall good level of global milk production in recent months. All the major milk producers reported higher output levels than last year, including China. This – together with lower demand – caused milk powder prices to drop again, both on the world and the European markets (Imgage Source: Barry Callebaut).