Barry Callebaut with significant improvement at half year result

Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, said: “We keep delivering on our ‘smart growth’ agenda. Sales volume growth picked up in the second quarter of the current fiscal year, despite sluggish global demand for chocolate confectionery1. We significantly improved our profitability as a result of our ongoing focus on product and customer mix and the successful implementation of our Cocoa Leadership program. At the same time, we continue to focus on free cash flow and returns.” The Barry Callebaut Group saw sales volume growth picking up to +3.5% in the second quarter (first quarter -0.4%), leading to a topline growth for the first six months of fiscal year 2016/17 of +1.4% to 946,782 tonnes. This contrasts with the -2.1%1 decline of the global chocolate confectionery market during the same period. Growth was fueled particularly by outsourcing, i.e. the successful integration of the Halle factory acquired from Mondelēz International, but also Gourmet & Specialties and emerging markets contributed. Sales volume in chocolate was up +3.5%, while the intentional phase-out of less profitable contracts in cocoa, now completed, led to a decline of -5.0%. Sales revenue outpaced volume growth, rising by +2.5% in local currencies (+3.3% in CHF) to CHF 3,538.7 million, due to a better product mix and partly offset by lower raw material prices. Gross profit amounted to CHF 464.0 million, corresponding to +6.2% in local currencies (+6.0% in CHF). The increase, which is significantly above the reported volume growth, was fueled by a good product and customer mix, the successful execution of the Cocoa Leadership program and a more supportive cocoa products market. Operating profit (EBIT) amounted to CHF 238.4 million, an increase of +19.3% in local currencies (+18.8% in CHF) as a result of the good gross profit. EBIT per tonne increased by +17.6% in local currencies (+17.1% in CHF) to CHF 251.8. Excluding the non-recurring positive effect of CHF 16.3 million related to acquisition activity, the EBIT increase was +11.1% in local currencies. On this adjusted basis, the Group achieved a recurring EBIT per tonne of CHF 234.6, which is an increase of +10.0% in local currencies (+9.1% in CHF).