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Barry Callebaut announces 31% rise in net profit after posting strong growth, FY results reveal

By Anthony Myers contact

- Last updated on GMT

Antoine de Saint-Affrique, CEO, Barry Callebaut Group. Pic: Barry Callebaut
Antoine de Saint-Affrique, CEO, Barry Callebaut Group. Pic: Barry Callebaut

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'Smart growth' strategy delivered strong results across all regions, says company as sales volume rise 6.3%, significantly above the growth rate of the global chocolate confectionery market (+1.8%).

Barry Callebaut Group (BCG), the world’s leading manufacturer of high-quality chocolate and cocoa products, has announced a 6.3% rise in growth, according to its annual results for 2017-18, published today.

The report stated production was up to over 2 million tons for the first time in the company’s history while net profit rose 31% in local currencies to CHF 357.4 million ($357.22 million), helped by factors including lower net finance costs, BCG said.

BCG’s board of directors is proposing a payout to shareholders of CHF 24.00 ($24.10) per share at its Annual General Meeting of Shareholders on December 12, an increase of 20.0% versus prior year. This represents a payout ratio of 37% of the net profit.

At a press conference at the Group’s headquarters in Zurich, Switzerland, Antoine de Saint-Affrique, CEO, 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​.”

The shareholders’ dividend will be paid on or about January 9, 2019, subject to approval by the Annual General Meeting of Shareholders, he said.

Barry Callebaut’s 6.3% rise in sales volume to 2,035,857 tons is significantly above the growth rate of the global chocolate confectionery market (+1.8%), the company reported.

It said 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%.

BCG also reported that sales revenue was flat, +0.1% in local currencies (+2.1% in CHF), at CHF 6,948.4 million ($6976.30), as a result of lower raw material prices, which the Group says it passes on to its customers for a large part of its business.

Integrations

The integration of recent acquisitions, including D'Orsogna Dolciaria in Italy and Gertrude Hawk Ingredients in the US, kept BC’s value-adding Specialties & Decorations business ‘well on track’.

A long-term supply agreement with Burton’s Biscuit Company, the UK’s second largest biscuit manufacturer, was announced in September 2018 and the recently announced acquisition of Inforum, a leading B2B chocolate manufacturer in Russia, the world’s second largest chocolate confectionery market, support Barry Callebaut’s growth ambition in Europe, Middle East and Africa (EMEA).

The company stated both transactions are subject to closing conditions and regulatory approvals and are expected to be closed by the end this year.

Innovation

Since its global launch in Shanghai in September 2017, ruby, the fourth type of chocolate, has been making waves in consumer markets across the world. Last week, Nestlé launched a ruby version of Baci Perugini​ following pink variants of its iconic KitKat brand in Japan, South Korea, several European markets and Australia.

BCG also announced the extension of its dairy-free chocolate product portfolio in the US, tapping into growing customer demand for dairy-free chocolate.

Sustainability

BCG says it is on record to make sustainable chocolate the norm by 2025 from its Forever Chocolate program.

According to figures released in its Financial Results, in 2017/18, the group sourced 44.0% (vs. 36.0% in prior year) of its cocoa and 44.0% (vs. 30.0% in prior year) of its other chocolate ingredients from sustainable sources.

De Saint-Affrique said the company remains committed to the Cocoa and Forests Initiative, and eradicating deforestation from the cocoa supply chain in West Africa and is working closely with the organization in a ‘disciplined way’ to make cocoa sustainable for the long term.

In addition, BCG has developed pilot projects in five key cocoa sourcing countries, Côte d’Ivoire, Ghana, Cameroon, Brazil and Indonesia, as a model for sustainable cocoa farming.

Chocolate Academy

In May 2018, Barry Callebaut opened its first ‘CHOCOLATE ACADEMY Center’ on the African continent – its 21st globally – in Johannesburg, South Africa. The investments in South Africa and further extensions of its cocoa processing capacities in Côte d’Ivoire and Cameroon reaffirm the Group’s commitment to the African continent, de Saint-Affrique said in his statement.

In other news from the press conference, BCG announced a change to its board of directors after Jim Donald informed he was stepping down following his recent appointment to President & CEO of Albertsons Companies, one of the largest supermarket chains in North America.

Suja Chandrasekaran, Markus Neuhaus and Angela Wei Dong will be announced as new board members at its AGM in January.

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