Barry Callebaut has Growing Appetite for Emerging Markets but Profits Slide

02 Nov 2016 --- A “sluggish global chocolate confectionery market" sent full-year profits at Barry Callebaut down 8.7 percent to 219m Swiss francs ($225m) but Chief Executive Antoine de Saint-Affrique pointed to momentum in China and India.

The world's biggest chocolate maker reported full-year sales revenues were up seven percent while sales volume growth slowed down to 2.2 percent, as it phased out less profitable contracts.

Amid a backdrop of a declining chocolate confectionery market, which declined 1.7 percent during the year, one highlight for Barry Callebaut was the performance of its Gourmet & Speciality unit, which grew over 12 percent driven by new product launches.

Amid a challenging market, Barry Callebaut is also looking to improve the performance of its cocoa business by axing less profitable contracts under its Cocoa Leadership project, such as in Thailand and Malaysia.

Speaking on a conference call, Saint-Affrique, who took over as chief executive last year, said "smart growth" - the balance between volume growth, profitability and cash flow - is "getting traction".

He pointed to the business recording "double digit growth in countries such as China" as well as its strong performance in Latin America, as customers lapped up its gourmet products.

Barry Callebaut also updated the market on its deal with Mondelez, in which its acquired its chocolate production facility in Halle, Belgium earlier this year, saying the deal will be complete by the end of the year.

Asked about the impact of Brexit on its UK business, which is an important business, particularly in gourmet, Saint-Affrique said the impact was "limited".

He said: "We don't see major impact. Obviously there is volatility in the pound which has an impact. Will it be felt moving forward? It is anybody's guess.”

Across the Americas, sales volumes were up 8.8 percent amid a chocolate market which declined overall by three percent.

Across Asia Pacific, sales volumes were up 10.8 percent also across a weak chocolate market.

The company also announced that Andreas Jacobs would step down as chairman, a role he has held for the past 11 years.

by John Reynolds