Barry Callebaut Sees Volumes Rise in First Half of 2015

02 Apr 2015 --- Swiss chocolate manufacturer Barry Callebaut has reported strong volume sales increases in the first half of 2014/15, along with a sales increase of 12% and net profit increase of 11%. Half year sales reached CHF 3.24bn ($3.49bn), higher than the expected CHF 3.20bn ($3.44bn).

The increases were higher than expected and come as a result of a cost cutting exercise to combat the effects of a strong Swiss franc.

The decision of the Swiss National Bank to discontinue the minimum exchange rate of CHF 1.20 per Euro impacted the Group’s reported figures as its reporting currency is the Swiss franc. Thus, the recent appreciation of the Swiss franc, particularly against the Euro, led to currency translation effects on the Group’s income statement. However, the Group generates approx. 99% of its sales revenue outside of Switzerland and therefore has limited operational exposure to the Swiss franc.
 
Sales volume reached 893,437 tonnes, representing an increase of 2.0% which was mainly supported by higher volumes in the Group’s main regions and by both the outsourcing & partnerships and the Gourmet business. Growth stems from all Regions and Product Groups, with the largest absolute contribution coming from Region Western Europe and Product Group Food Manufacturers.
 
Sales revenue improved by 11.6% to CHF 3,244.2 million ($3.49bn)(+14.5% in local currencies), outpacing volume growth due to higher prices for cocoa products that are generally passed on to customers and due to increased sales of higher value products.
 
Gross profit amounted to CHF 446.2 million ($481m) and showed a plus of 5.8% compared to CHF 421.6 million ($454m) in the prior year period (+9.5% in local currencies). The increase exceeds volume growth as a result of the Group’s continuous focus on margins and product mix.
 
Marketing and sales expenses grew by 5.9% to CHF 64.6 million ($70m) as the Group further invested in promoting its global Gourmet brands, in expanding the distribution and sales networks, in particular in emerging markets, as well as in broadening its range of specialty products in the Food Manufacturers business.
 
Operating profit (EBIT) reached CHF 219.2 million ($236m), representing an increase of 8.7% (+13.0% in local currencies) that originated from the higher gross profit as well as tight cost control. Regions Western Europe and Americas contributed strongly to this result, supported by the positive impact of margin increases and an improved product mix across all Regions. However, this increase was partly offset by the effect of the weak combined cocoa ratio. Finance income increased from CHF 1.6 million ($1.72m) to CHF 4.1 million ($4.1m) on account of a positive foreign currency exchange result.
 
Shares in the company rose by 8% on the announcement of the results.