Callebaut claims investment status upgrade will serve growth plans

By Jane Byrne

- Last updated on GMT

Related tags Barry callebaut Chocolate Cocoa solids Investment

Callebaut claims investment status upgrade will serve growth plans
Pod-to-pallet industrial chocolate supplier Barry Callebaut has flagged up the potential for growth arising from the fact that independent analysts, Moody’s, has given the company an ‘investment grade’ status.

A spokesperson for the Swiss company told that the new Baa3 corporate rating from the research and risk analysis provider will widen the type of investor Callebaut is able to attract such as pension fund groups as well as ensuring the company gets access to more favourable credit lending rates.

Callebaut said that its consistent focus on strengthening its balance sheet and financial metrics helped secure the new category of rating.

Its growing presence in emerging markets, which now account for 21 per cent of Barry Callebaut's business, has also played a part in it achieving the beneficial investment status, continued the spokesperson.

The “grade reflects the company's track record of stable operating performance in spite of volatile cocoa prices and challenging economic conditions, which has allowed Barry Callebaut to achieve credit metrics in line with a higher rating category,”​ noted the group on Friday.

The Baa3 category will have both mid and long-term implications for Callebaut’s expansion plans such as new factory builds, but we are conscious of the fact that Moody’s ratings can be amended down the road.

Thus we certainly won’t rest on our laurels but will continue to ensure the business model merits this rating,” ​commented he spokesperson.

Last month, the Swiss group noted strong performance in emerging markets and a strategic focus on customer segmentation rather than individual products had helped it record half year profits.

The Swiss chocolate maker reported its six month net profit figure rise 9 per cent to CHF158.8m (€122.81m) in the first half of 2010 even as political unrest grew in primary cocoa source the Ivory Coast. Western European sales volumes fell 1.8 per cent amid profits coming under aggressive price pressure and "weaker consumer product results".

And emerging markets like India, China, Brazil, Poland, Russia, Mexico and the Asia Pacific were highlighted as where investments were seeing 20+ per cent volume gains in some markets.

“Once again, we managed to significantly outperform the global chocolate market by growing twice as fast,"​ said CEO Juergen Steinemann at the time.

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