Barry Callebaut Sales Up 1.5% in Q1

In an environment that continues to be characterized by economic uncertainties, Barry Callebaut succeeded in growing its sales volume by a strong 7.2% to 362,973 tonnes.

13 Jan 2010 --- Barry Callebaut AG, the world’s leading manufacturer of high-quality cocoa and chocolate products, announced its key sales figures for the first three months of fiscal year 2009/102, ended November 30, 2009. In an environment that continues to be characterized by economic uncertainties, Barry Callebaut succeeded in growing its sales volume by a strong 7.2% to 362,973 tonnes. All regions and – on a like-for-like-basis – all product groups contributed to this growth. The most significant volume increases were noted in Region Asia (+17.7%), Region Americas (+15.6%) and in Global Sourcing & Cocoa (+14.0%). Sales revenue increased by 6.3% in local currencies, but was severely impacted by adverse currency translation effects. In Swiss francs, the company’s reporting currency, it came in at CHF 1,450.2 million (+1.5%).

Cocoa terminal market prices further advanced during the quarter and reached a 33-year high in London in December 2009 amidst fund buying and increased concerns over the size of the 2009/10 crop in Ivory Coast and Ghana. In Europe, fresh milk production is now seasonally increasing, and overall, dairy prices are showing their first slight decline since last August. World sugar prices have continued to rise and have now reached a level that is close to the regulated EU sugar prices.

Global Sourcing & Cocoa increased the volume of cocoa products sold to third-party customers by 14.0% to 57,499 tonnes, driven primarily by higher sales in Region Americas and by strong demand for cocoa powder. As already announced in November 2009, the combined cocoa ratio remained under pressure because the higher cocoa powder prices could not compensate for the low cocoa butter prices. Sales revenue amounted to CHF 231.6 million, which corresponds to an increase of 20.7% in local currencies or a plus of 16.1% in CHF.

The recession hit Eastern Europe later than Western Europe; Russia, in particular, is still badly suffering from the crisis. While the markets in Western Europe stabilized at a low level, there are still no clear signs of an economic recovery in Eastern Europe. Barry Callebaut’s Region Europe posted an overall sales volume growth of 2.4% to 216,217 tonnes in a sluggish market environment. Sales of Gourmet products, especially to the bakery/pastry segment, increased in all major markets. Sales revenue increased 0.7% in local currencies. Due to negative currency translation effects, it showed a decline of 2.9% in CHF terms and reached CHF 917.4 million. Recently acquired Danish vending mix specialist Eurogran has now been fully integrated into the Beverages division. The acquisition of Spanish chocolate maker Chocovic was closed on December 23, 2009. The integration of Chocovic into Region Europe started immediately.

The chocolate confectionery market in the Americas has bottomed out but is not recovering yet. Customers and consumers continue to downtrade to private label and lower-price products, such as compounds. In this context, Region America’s sales volume growth of 15.6% to 76,816 tonnes is remarkable. Major growth drivers were national accounts, the further implementation of existing outsourcing agreements in Mexico as well as sales to Gourmet customers, in particular to bakeries and large confectioners. The weak US-dollar relative to the Group’s reporting currency, the Swiss franc, negatively affected sales revenue. While sales revenue was up 14.3% in local currencies, the increase in CHF terms was only 4.0%. Sales revenue came in at CHF 248.5 million.

Asia is showing some early signs of a recovery. In a still fragile economic environment and at the currently high commodity price levels, customers continue to order at short notice. Sales volume rose significantly by 17.7% to 12,440 tonnes, driven by the implementation of an existing outsourcing contract as well as market share gains with new customers and distributors both in Food Manufacturers and Gourmet & Specialties products. Sales revenue growth, which was 18.7% in local currencies, was dampened by currency translation effects. In CHF terms, the growth rate was 14.1% and sales revenue amounted to CHF 52.7 million.

Food Manufacturer Products recorded strong sales volume growth of 7.1% to 227,457 tonnes. All regions contributed to this growth, in particular Asia and North America, but also a number of countries in Europe, such as Germany, France, Italy, Poland and Greece. Sales revenue grew 4.4% in local currencies. Due to negative currency translation effects, it declined by 1.8% in Swiss franc terms and came in at CHF 737.7 million.

As a result of higher promotional activities and a slightly improved economic environment combined with some restocking, sales volume in Gourmet & Specialties Products picked up significantly by 14.6% to 36,999 tonnes. All Regions contributed to this growth, which was driven by a rebound of the branded European Gourmet products. While the confectioners segment started to recover the bakery segment continued to perform well. Higher-end restaurant sales, however, were still depressed. With an increase of 14.0% in local currencies, sales revenue grew to the same tune as sales volume. However, due to negative currency effects, growth in Swiss francs was 9.8%, up to CHF 203.7 million.

Consumer Products was able to grow its international sales, especially in the UK, Scandinavia and Southern Europe, while business was flat in Germany. Tablets, pralines and bars performed well; specialty products, on the other hand, declined. However, changes in scope due to the divestment of consumer activities in the previous year, the phasing-out of some unprofitable contracts and a volume decline in France resulted in lower sales volume and sales revenue. Sales volume amounted to 41,018 tonnes, down 5.6%. Sales revenue came in at CHF 277.2 million, down 3.4% in local currencies and 5.5% lower in Swiss francs.