Barry Callebaut’s Reports Sales Volume Up by 5.6%

The Gourmet & Specialties Products business showed a good performance in the entire Region. The bakery segment was flat, whereas HORECA sales (hotels, restaurants, catering) are recovering.

1/12/2011 --- Barry Callebaut AG, the world’s leading manufacturer of high-quality cocoa and chocolate products, announced its key sales figures for Q1 of fiscal year 2010/11, ended November 30, 2010. Sales volume increased considerably by 5.6% to 383,222 tonnes, driven by the Gourmet & Specialties Products business as well as the good performance of emerging markets and the Cocoa Products business. Sales revenue went up significantly by 14.2% in local currencies. Due to unfavorable exchange rate developments, in particular the strengthening of the Swiss franc against the euro and the US dollar, sales revenue in the reporting currency (CHF) was negatively affected and rose 4.9% to CHF 1,521.8 million.

Juergen Steinemann, CEO of Barry Callebaut, said: “As expected, the general economic growth momentum continued to pick up, but with geographic variations: Whereas emerging markets again showed gratifying GDP growth rates, the economic environment in Western Europe and North America was mixed but still better overall. Under these market circumstances and despite significant negative currency effects, we were able to achieve good volume and sales revenue growth. We are particularly pleased with the growth of our Gourmet business, our performance in emerging markets such as Eastern Europe and Asia-Pacific as well as the positive momentum of our cocoa products sales to global customers. We are confident that, based on our recently fine-tuned strategy, we will continue to significantly outperform the global chocolate market and achieve our extended financial targets.”

Sales performance by Region in Q1 of fiscal year 2010/11

Region Europe

Overall, the economy in Western Europe is picking up. Eastern European economies are performing well, especially Russia showed first signs of recovery. Sales volume in the Region went up by 3.0% to 222,708 tonnes, mainly driven by strong double-digit growth rates of the Food Manufacturers Products business in Eastern Europe. The Gourmet & Specialties Products business showed a good performance in the entire Region. The bakery segment was flat, whereas HORECA sales (hotels, restaurants, catering) are recovering. More demand was seen for premium products. Overall, sales revenue rose by 7.5% in local currencies. Due to the strength of the Swiss franc versus the euro, sales revenue declined 4.5% in CHF terms to CHF 876.3 million.

Region Americas

The economic environment in the Region has improved although high unemployment rates, especially in the U.S., are having an impact on consumer spending. Latin American countries continued to show high GDP growth rates, but inflation is also on the rise. In a very competitive market environment, Region Americas was able to increase sales volume by 2.0% to 78,368 tonnes. In North America, the Food Manufacturers business was driven by the good performances of the corporate accounts. Sales revenue in local currencies surged 11.9% but was negatively affected by currency translation effects. In Swiss francs, sales revenue rose by 7.9% to CHF 268.2 million.

Region Asia-Pacific

The general economic conditions continue to improve in the Region. The Chinese economy is still growing at around 9% but with a high inflation rate. Region Asia-Pacific was able to benefit from the generally favorable economic environment and increased its sales volume by 9.2% to 13,582 tonnes. The main growth driver was the Food Manufacturers Products business. Good growth was seen in China. Gourmet & Specialties Products business saw strong demand for both premium European brands as well as for the local brands. Sales revenue grew by double digits with a plus of 19.1% in local currencies and 18.2% in the reporting currency, closing at CHF 62.3 million.

Global Sourcing & Cocoa

Cocoa terminal market prices moved in a bandwidth from GBP 1,850 to 1,950 per tonne in the period under review, down from historical highs in the last quarter of fiscal year 2009/10. Nevertheless, cocoa prices are still on high long-term average levels and very volatile on a daily basis. Prices on the world sugar markets soared to new record highs due to a third deficit in a row. The sugar price in the regulated EU region, where Barry Callebaut sources the majority of its sugar supplies, also moved up significantly. World as well as European market prices for milk powder increased at the beginning of the period under review. This was followed by downward corrections and – due to increasing demand – prices have begun to rise again and are expected to stabilize around the historical average.

The segment Global Sourcing & Cocoa significantly increased the volume of cocoa products sold to third-party customers by 19.2% to 68,564 tonnes. The higher sales were driven by increased sales of semi-finished products and cocoa bean deliveries to global customers, especially in Europe and Asia-Pacific. Driven by high cocoa powder prices, sales revenue of Global Sourcing & Cocoa amounted to CHF 315.0 million, which corresponds to an increase of 42.3% in local currencies and a plus of 36.0% in Swiss francs. As already apparent in the previous quarter, the (Forward) Combined Cocoa Ratio further improved.