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Europe delivers for Barry Callebaut in new fiscal year

By Oliver Nieburg+

15-Jan-2014

Petra Foods' cocoa division begins to reap rewards for Barry Callebaut as European chocolate consumption provides another boost
Petra Foods' cocoa division begins to reap rewards for Barry Callebaut as European chocolate consumption provides another boost

Barry Callebaut revenues for the first three months of fiscal 2013/14 were up 21.4% driven by a strong chocolate performance in Europe and the newly acquired Petra Foods cocoa business.

Barry Callebaut’s sales, which include the Petra Foods ingredients division acquired in June 2013, were up 21.4% for the three months up to 30 November 2013 to CHF 1.52bn ($1.68bn).

Petra Foods is being integrated into Callebaut’s Global Cocoa division. This segment grew sales volumes 91% in the three months to 127,520 MT and revenues by 8.5% to CHF 240.6 m ($265.8m).

Chocolate demand flourishes in Europe

Sales revenue growth for industrial chocolate was stronger in Barry Callebaut’s Europe region than in its Americas and Asia-Pacific divisions. Higher raw material prices helped the company’s European business grow revenues 11.5%, compared to 5.9% growth in the Americas and 3% in Asia-Pacific.

Rising demand for chocolate in Western European led Barry Callebaut to expand production capacity at its Wieze factory in Belgium by 23,000 MT during the period. “Further capacity optimizations in the region are under way,” said the firm. The company has previously complained of capacity constraints at its Western European plants.

CEO’s take

Juergen Steinemann, CEO of Barry Callebaut, said: “We have had a solid start into the new fiscal year. Our three key growth drivers – geographic expansion, outsourcing & partnership agreements, and our Gourmet business – have maintained their momentum, with emerging markets and Gourmet delivering particularly strong growth.

“The integration of the acquired cocoa business continues to make good progress. As of the beginning of the fiscal year, all integration-related workstreams have been transferred into our operational activities and are on track as planned.”

The firm’s overall sales volumes grew 19% to 463,966 metric tons. Without the Petra Foods business, sales volumes would have been up 4.6%, still above volume growth in global chocolate confectionery, which Nielsen put at 3.4% during the period.

Outlook

The company will continue to integrate the Petra Foods business and are confident of its mid-term financial targets.

The firm is aiming for 6-8% average volume growth per year, and EBIT per MT restored to pre-acquisition levels of CHF 256 per MT by 2015/16.

Cocoa prices

Barry Callebaut noted that cocoa terminal prices reached a two year high of £1,782 on 20 November 2013, but said that strong arrivals in the two principal growing countries, Ivory Coast and Ghana had led market players to gradually reduce their deficit expectations.

In December last year, Rabobank upped its forecasted deficit for the 2013/14 season to 207,000 MT. In May 2013 it had projected a 75,000 MT shortfall.

The bank also projected a cocoa shortfall 14% greater than the previous season for 14/15.

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