Barry Callebaut Reports Dynamic Business Growth

Barry Callebaut also highlighted a new study, conducted by the Queen Margaret University in Edinburgh, demonstrates that ACTICOA dark chocolate contributes to maintaining a healthy blood pressure. This confirms earlier studies done.

07/11/08 Barry Callebaut AG, the world’s leading manufacturer of high-quality cocoa and chocolate products, has successfully continued its dynamic growth in fiscal year 2007/08 ended August 31, 2008. Sales volumes rose 10.1% to 1,166,007 tonnes, driven by additional business with existing and new customers. Sales revenue increased strongly by 17.3% to CHF 4,815.4 million, mostly due to higher volumes and partly due to higher raw material prices. Excluding cocoa price and exchange rate effects, sales revenue rose 14.3%. As communicated in April 2008, the factors that slowed EBIT growth in the first semester did not reoccur. As a result of this and ongoing cost saving programs, EBIT growth accelerated in the second semester. For the fiscal year as a whole, operating profit (EBIT) rose 5.3% to CHF 341.1 million. Net profit for the year, including discontinued operations, increased 65.6% to CHF 205.5 million. Net profit from continuing operations rose by 1.0% to CHF 209.1 million. A loss on the sale of financial assets and higher financial expenses had a negative impact on net profit in fiscal year 2007/08.

Patrick De Maeseneire, CEO of Barry Callebaut, said: “I am satisfied with the sales and profit growth generated in the past fiscal year, which was in line with our expectations. Thanks to our robust business model and our ability to adapt quickly to changing market conditions, we were able to offset record-high raw material costs and accelerate our operating profit growth in the second semester. Additionally, we continued to grow more than three times as fast as the global chocolate market. These achievements, especially in the face of a challenging market environment, underline the effectiveness of our growth strategy.”

Looking ahead, CEO Patrick De Maeseneire said: “The robustness of Barry Callebaut’s business model, the proven success of our growth strategy and our position as the global market leader will enable us to perform in line with our growth targets in the current fiscal year. Additionally, chocolate is a defensive industry and consumption has proven resilient in previous economic downturns. Indeed, we continued to see good growth in the first two months of the current fiscal year. Thanks to our targeted expansion into high-growth markets, we now have an unrivalled global presence. In addition, we benefit from long-term supply contracts, a diversified product offering and a solid financial structure. All these factors, combined with our ongoing cost savings and efficiency initiatives, make us confident that we will reach our four-year financial targets1, barring any major unforeseen events."

In the year under review, capital expenditure was CHF 249.9 million (prior year: CHF 153.1 million) to support Barry Callebaut’s global expansion. Despite these significant investments, the return on invested capital (ROIC) remained stable at 14.0% (prior year: 14.3%). As a result, the Economic Value Added (EVA) generated by Barry Callebaut increased to CHF 126.3 million (prior year: CHF 122.9 million). 

Barry Callebaut has solid long-term committed financing facilities of EUR 1.2 billion (approximately CHF 2 billion) with an average tenor of 7 years. With a net debt position of CHF 1,041.2 million as per August 2008, Barry Callebaut has only used debt in the amount of around 50-55% of these lines.

Additional outsourcing volumes in Western Europe and new business in Eastern Europe led to a 6.5% rise in sales volumes to 786,698 tonnes. Sales volumes grew more than three times as fast as the regional chocolate market despite a challenging economic environment. Sales revenue increased by 15.8% to CHF 3,530.5 million, driven by higher sales volumes and higher sales prices related to higher raw material prices. Operating profit (EBIT) decreased by 4.3% to CHF 277.6 million. Profitability in the region was affected by three factors during the first six months of the fiscal year: start-up costs at the new chocolate factory in Russia; high initial fixed costs and low capacity utilization associated with the gradual phasing-in of large outsourcing volumes and a delay in price adjustments in the branded consumer business as raw material prices moved higher.

As the preferred outsourcing partner in the chocolate industry Barry Callebaut’s Food Manufacturers business unit in Europe continued to benefit from additional outsourcing volumes from existing and new customers. The implementation of the long-term supply agreements with Nestlé and Cadbury is on track. Barry Callebaut has significantly increased its presence in Eastern Europe. This promising region delivered very good growth rates, especially once the new chocolate factory in Russia was fully operational.

The Gourmet & Specialties business unit reinforced its sales teams and launched promotional activities in key markets, which led to market share gains. To strengthen relationships with customers the Gourmet business unit opened a new Chocolate Academy in Zundert, the Netherlands, in May 2008. To meet the growing demand for convenience products, Barry Callebaut built a specialty factory for ready-to-serve decorated frozen desserts in Alicante, Spain, as part of its joint venture with world-famous pastry chefs Paco and Jacob Torreblanca. In September 2008, Barry Callebaut acquired IBC in Belgium, a company that specializes in

Meanwhile Barry Callebaut has presented the results of new research into ACTICOA chocolate at Health Ingredients Europe 2008. The study, conducted by the Queen Margaret University in Edinburgh, demonstrates that ACTICOA dark chocolate contributes to maintaining a healthy blood pressure. This confirms earlier studies done.

Daily consumption of 17g ACTICOA dark chocolate (which contains 500mg of cocoa flavanols) for 2 weeks helps maintain healthy blood pressure.

Two test groups consumed a small portion of dark ACTICOA chocolate every day for two weeks. For the first group, the portion of ACTICOA chocolate contained 500 mg cocoa flavanols, for the second, 1000 mg cocoa flavanols. After two weeks, both groups, independent of the dose, displayed significantly reduced blood pressure.

A reduction of 7 points was observed in systolic and 5 points in diastolic blood pressure: expressed as a reduction of 7/5mm of mercury. This reduction has a proven, beneficial effect on our health as a reduction in blood pressure of 7/5 mmHg reduces the risk of cardiovascular diseases. This is underwritten by cardiologists the world over.