Barry Callebaut on solid financial ground

By Anthony Fletcher

- Last updated on GMT

Related tags Barry callebaut Generally accepted accounting principles Europe Earnings before interest and taxes

Leading chocolate manufacturer Barry Callebaut has reported an
increased operating profit (EBIT) of 14.6 per cent for the first
nine months of fiscal year 2005/06.

In addition, net profit went up by 23.8 per cent to CHF 126 million, while consolidated sales volumes were practically unchanged in the period under review.

Sales revenue, including above-average physical cocoa bean sales in the second quarter, was up 8.7 per cent.

The company attributed profitability growth to improvements in gross profit across all business units. In addition, a successful restructuring process saw the consumer products Europe business unit reduce costs.

"I am very pleased with the strong third quarter results, which show positive developments in terms of volumes, revenue and profitability,"​ said Patrick De Maeseneire, CEO of Barry Callebaut.

"The turnaround in the European consumer business has been achieved. As we pointed out at the end of the first semester, we see the effects of this year's late Easter confirmed with some sales being shifted from the second to the third quarter in the food manufacturers and consumer products business units."

The restructuring programme in the consumer products Europe business unit has now entered the final phase. The distribution structure in Germany is being optimised, while the migration of administrative processes to the existing SAP platform has been completed and will now be rolled out to all factories.

Barry Callebaut also aims to increase the share of sales generated in regions other than Western Europe and North America from 11 per cent to 20 per cent by 2010. The company therefore plans to adopt a new organisational structure with a clear focus on regions.

The new organisation will take effect as of 1 September 2006.

"Barring any major unforeseen events, we are confident that we will achieve our financial targets for 2005/06 - despite the impact of the costs for our employee stock ownership programme, which now affect the income statement due to a change in accounting standards,"​ said De Maeseneire.

"The stronger regional focus of our organisation will allow us to tap faster and deeper into the above-average growth markets in North America, Eastern Europe and Asia."

In fact, Asia is now Barry Callebaut's fastest growing market, and further development looks likely since the opening of a factory in Singapore in 1997, and a sales office in Tokyo in 2004. The firm has also begun supplying chocolate to a number of speciality chocolatier boutiques throughout Japan.

It is clear that whatever the future holds for Barry Callebaut, the international arena will play an increasing important role. De Maeseneire revealed last year that "we don't want to be a European company only. We want to be a global company"​.

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