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% to 2,035,857 tonnes, significantly above the growth rate of the global chocolate confectionery market (+1.8%). Growth was broadly based with strong contributions from all key growth drivers: Emerging Markets (+9.1%), Gourmet & Specialties (+7.7%) and Outsourcing (+5.6%). Global Cocoa achieved a solid volume growth of +3.9%.
Sales revenue was flat, +0.1% in local currencies (+2.1% 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% in local currencies (+20.7% 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% in local currencies (+25.3% 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% in local currencies (+17.8% in CHF).
Net profit for the year (recurring) grew by +31.0% in local currencies (+35.9% 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%) 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.”