Barry Callebaut Announces Fall In Half-Year Operating Profit Despite Sales Growth
The group said it had made significant investments in operating structures to support further growth, ramp-up costs related to recent long-term partnership and outsourcing agreements, investments in the growth of the gourmet & specialties products business as well as multiple capacity expansions led to higher operating expenses, negatively impacting EBIT.
Barry Callebaut Announces Fall In Half-Year Operating Profit
2 Apr 2012 --- Leading chocolate manufacturer Barry Callebaut has confirmed its growth targets despite a 12.5% fall in operating profits in the six months to the end of February.
Sales volumes rose by 6.7% and revenues were up 10.4% in local currencies - 3% in Swiss francs - at CHF 2,476.9m ($2,748.83m).
But operating profits fell to CHF 175.1m ($194.2m) - 12.5% down in Swiss francs and 5.5% lower in local currencies.
The group said it had made significant investments in operating structures to support further growth, ramp-up costs related to recent long-term partnership and outsourcing agreements, investments in the growth of the gourmet & specialties products business as well as multiple capacity expansions led to higher operating expenses, negatively impacting EBIT.
Net profit from continuing operations declined by 11.3% in local currencies (-18.0% in Swiss francs) due to lower EBIT, higher financing costs related to the bond placement in summer 2011 as well as a less favorable tax mix.
Juergen Steinemann, CEO of Barry Callebaut, said: "After an anticipated slow start in Q1, we regained momentum in Q2, in all Regions and across all Product Groups. Once again, we outpaced the global chocolate market. Several major new partnership deals were signed, confirming an important part of our business model. In the last six months, we initiated selective investments in our future growth. This temporarily affected our bottom-line results."
Commenting on the future outlook he said: "The economic environment in Western Europe and North America remains fragile. Nonetheless, we are dedicated to investing along the route of our four strategic pillars, Expansion, Cost Leadership, Innovation and Sustainable Cocoa, paving the way for our future growth. With this, we are confident of reaching our mid-term financial targets.
