Barry Callebaut surpasses pre-pandemic performance in yearly results and increases dividend

10 Nov 2021 --- In its financial overview of fiscal year 2020/21 (ended August 31), Barry Callebaut Group has surpassed its pre-COVID-19 levels of 2018/19. With a 6.5% volume growth, the chocolate and cocoa giant business has evidently outpaced the underlying global chocolate confectionery market (+1.8%). 

The confectionery titan saw its profit grow faster than sales volume, amounting to CHF 1,147.2 million (US$1,257.3 million), compared to the previous year. It reports that healthy volume growth of 4.6%, to over 2 million metric tons, particularly in Gourmet & Specialties, had a positive impact on the mix.

Regional businesses remain robust
“Smart growth will continue to be at the heart of our long-term strategy execution with a focus on returns and cash generation,” says Peter Boone, CEO of the Barry Callebaut Group.

“By leveraging our global footprint, industry-best innovation, cost leadership, and impactful sustainability solutions, we are on track to accelerate up the value ladder. This makes us confident we will deliver on our mid-term guidance.”

Back side aerial view with focus on the High Bay of The Barry Callebaut Chocolate Box. (Credit: Barry Callebaut)Volume growth was supported by all of the company’s regional businesses (Asia Pacific +8.7%, Americas +7.9%, EMEA +5.5%). All key growth drivers of Outsourcing (+4.5%), Emerging Markets (+9.7%) and Gourmet & Specialties (+18.3%) had a particularly good impact.

Sales revenue increased by +8.7% in local currencies (+4.6% in CHF) to CHF 7,207.6 million (US$7,901.9 million).

Net profit for the year grew by 24.2% in local currencies (20.4% in CHF), compared to the prior year, and amounted to CHF 384.5 million (US$421.5 million).

Raw material price developments
During fiscal year 2020/21, cocoa bean prices fluctuated between £1,607 (US$2,200) and £1,869 (US$2,500) per metric ton and closed at £1,757 (US$2,400) per metric ton on August 31, 2021. 

On average, cocoa bean prices decreased by 7.0% versus prior year.

The global bean supply and demand shifted to a large surplus in 2020/21. On one hand, demand was subdued related to the COVID-19 pandemic. On the other hand, exceptionally good crop levels in key origins contributed to increased cocoa bean supply.

Sugar prices in Europe increased on average by +3.6% during the fiscal year under review, mainly due to poor crop and a reduction in capacity induced by low prices in previous years. 

The world market price for sugar increased on average by +22.3% on the back of strong demand from China in combination with a poor Brazilian crop.

Dairy prices increased on average by11.6% during the fiscal year 2020/21. Strong demand from Asia in combination with growing concerns around milk supply, logistical bottlenecks, sharply higher energy prices and general market inflation, boosted dairy product prices.

In October 2021, Barry Callebaut leveraged its deep knowledge of the cacao fruit and unlocked a new fruit drink category through its launch of Elix. (Credit: Barry Callebaut)Resilient cocoa business in volatile market environment
Barry Callebaut’s sales volume in Global Cocoa amounted to 445,719 metric tons, a decline of 2.6% compared to prior year. Sales revenue reached CHF 1,804.8 million (US$1,977.9 million). 

Operating profit (EBIT) was impacted by higher energy costs in West Africa as well as higher global freight costs.

This resulted in an EBIT of CHF 86.5 million (US$94.8 million), compared to CHF 94.9 million (US$104 million) EBIT recurring in the previous year. Excluding the above-mentioned additional cost, EBIT per metric ton grew by +4.8% in local currencies (+1.8% in CHF) to CHF 211 (prior year CHF 208).

Key business highlights
In September 2021, Hershey and Barry Callebaut extended their strategic supply agreement, under which Barry Callebaut will continue to supply Hershey’s North American business with chocolate products. The renewed agreement will enable Barry Callebaut to continue its strategic, long-term growth in North America.

In October 2021, Barry Callebaut inaugurated its new factory in Novi Sad, Serbia. The factory will serve as a regional hub from which Barry Callebaut can address the rapidly growing chocolate markets of Southeastern Europe and supply current as well as new customers with a wide range of chocolate, compound and filling products.

In the same month, Barry Callebaut opened its new Chocolate Academy Center in Belgrade, and re-opened its Chocolate Academy Center after relocation in Dubai. Through its global network of now 25 Chocolate Academy Centers, Barry Callebaut offers inspiration, training and personalized support for artisans, pastry chefs, confectioners, bakers and caterers.

Also in October, Barry Callebaut inaugurated “The Chocolate Box,” its new “fully energy-positive” Global Distribution Center in Lokeren, Belgium, the largest chocolate warehouse globally. It will serve as a logistical global hub for all packed chocolate and decorations products from the Group’s Belgium-based factories in Wieze and Halle.

In September 2021, Barry Callebaut completed the acquisition of Europe Chocolate Company, a privately-owned Belgian B2B manufacturer of chocolate specialties and decorations. This strategic acquisition strengthens Barry Callebaut’s manufacturing capabilities for value adding highly customized chocolate specialties and decorations.

Key innovation highlights
The first fully segregated dairy-free production facility in Norderstedt, Germany, expanded its range of plant-based indulgence for special dietary requirements, such as chocolate certified “Halal” or “Kosher Badatz.” Production started in April 2021 and will entice customers across Region EMEA.

In October 2021, Barry Callebaut inaugurated its new factory in Novi Sad, Serbia. (Credit: Barry Callebaut)In October 2021, Barry Callebaut’s new drinking chocolate powder with less sugar made its debut in Taiwan. This tasty innovation, with only four ingredients and minimal processing, is made with a natural monk fruit-based sweetener.

Furthermore, in Japan, Barry Callebaut developed a low carb chocolate with no added sugar for a leading brand in protein bars, which made its debut in early October 2021.

In the same month, Barry Callebaut organized “Treat Tomorrow Live,” a “glocal” customer gathering, bringing together on a virtual platform customers, brands and artisans from across the globe. “Treat Tomorrow” addresses pressing consumer questions on health, next generation indulgence, plant-based, sustainability and the climate.

Also in October, Barry Callebaut leveraged its deep knowledge of the cacao fruit and unlocked a new fruit drink category by introducing “Elix,” coined as the first nutraceutical fruit drink. Elix’ accompanying health claim related to the naturally present cacao fruit flavanols and their effect on circulatory health is approved under the EU Nutrition and Health Claims regulation.

Sustainability gains
In August, Barry Callebaut was recognized by Sustainalytics for the third consecutive year as an industry leader in managing Environmental, Social and Governance (ESG) risks in its chocolate supply chain.

Also in August, Barry Callebaut, together with Nestlé and Proforest, launched a scorecard to drive sustainable coconut oil production and assess sustainability risks at the sourcing locations. By 2022, Barry Callebaut intends to roll out this assessment with all of its coconut oil suppliers.

In July, Barry Callebaut, in collaboration with Gold Standard and Agolin, developed a new methodology to quantify and certify carbon insetting for dairy ingredients within its chocolate supply chain.

By Benjamin Ferrer

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