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Covid does not stop Barry Callebaut, sales resumed in the 4th quarter

Recovery of 4.3%, as anticipated by the company at the beginning of the year

Barry Callebaut confectionery company founded in 1996 from the merger between the Belgian chocolate producer Callebaut and the French confectionery company Cacao Barry, after a 14.3% decline in revenues in August at the height of the Covid pandemic, recorded a recovery in sales in the 4th quarter.

Announcing a number of strategic milestones achieved in fiscal year 2019-20, CEO Antoine de SaintAffrique said: “Although markets are still volatile, we will pursue further expansion and target new opportunities, thanks to our continued focus on customers and our strong innovation pipeline. This, together with our solid financial base".

In a turbulent year, the global chocolate sweets market fell 0.3% and Barry Callebaut's sales volume in Global Cocoa fell 2.0% as chocolate makers struggled with weak demand due to the decline in purchases by consumers, forced to lockdown to avoid contagions. “I am proud of the solid track record and balance sheet strengthening we have been able to deliver in unprecedented times. They are a testament to the strength and resilience of the company, its employees and its culture. Our focus on care, continuity and money has helped us safeguard the health of our communities, serve our customers well when they need them most, and improve our company's financing", said de SaintAffrique.

Sales revenue declined by –0.4% in local currencies (–5.7% in CHF) to CHF 6,893.1 million. Gross profit amounted to CHF 1,063.7 million, a decline of –6.8% in local currencies (–11.3% in CHF) compared to prior year.6 The volume decline in the second half of the year due to the COVID-19 lockdowns, particularly in Gourmet & Specialties, had an adverse impact on the product mix. Operating profit (EBIT) recurring7 amounted to CHF 491.0 million, a decrease of –13.8% in local currencies (–18.5% in CHF), compared to prior year.6 Currencies had a strong negative translation effect of CHF –29 million. As announced with the Half-Year Results, the closure of the cocoa factory in Makassar, Indonesia, had a negative impact of CHF –7.8 million. As a result, the reported EBIT amounted to CHF 483.2 million, down –15.1% in local currencies (–19.8% in CHF) compared to prior year.6 The recurring EBIT per tonne amounted to CHF 234 compared to CHF 282 in prior year.6 Net profit for the year recurring7 amounted to CHF 319.3 million, down –13.3% in local currencies (–18.5% in CHF) compared to prior year.6 The reported Net profit for the year amounted to CHF 311.5 million, down –9.4% in local currencies (–14.8% in CHF) compared to prior year. 6 The net finance costs decreased to CHF 102.4 million from CHF 148.4 million in prior year, which included a CHF 33.0 million one-off expense for the early repayment of the EUR 250 million Senior Note. The income tax expenses amounted to CHF –69.2 million in 2019/20, which corresponds to an effective tax rate of 18.2% (18.6% in prior year).

The Group expects a "gradual" recovery in the gourmet business with restaurants, chefs and bakeries, where sales volumes decreased by 14.1% in 2019-20. The company also announced that Ben De Schryver, currently head of Asia and the Pacific, will be the new chief financial officer starting January 1, 2021, replacing Remco Steenbergen who has taken on the position of Lufthansa's chief financial officer.

Barry Callebaut launched the new Cabosse Naturals brand in October 2020, a range of 100% pure cacaofruit ingredients: pulp, juice, concentrate and cascara. The ingredients allow producers and chefs to turn cacaofruit into drinks, ice cream, snacks, yoghurt and chocolate confectionery. Earlier this year, Barry Callebaut introduced 100% dairy-free "M_lk Chocolate" to meet the growing demand for plant-based references and fit into the growing portfolio of "Plant Craft" products ranging from chocolate, nuts and fillings, to decorations. Additionally, in February 2020, Mona Lisa, the company's decoration brand, launched "Mona Lisa 3D Studio", the world's first large-scale 3D printed custom chocolate designed for hotels, bakeries and coffee shops.

The Group also pays attention to sustainability. Last month it declared that all of its gourmet brands, distributed globally, are made from 100% sustainable cocoa. In July 2020, the Forever Chocolate corporate sustainability program was recognized by Sustainalytics as the N.2 for sustainability strategy, out of 182 companies evaluated in the food packaging sector. Finally, the company also disclosed all its data relating to direct cocoa suppliers in Côte d'Ivoire, Ghana and Cameroon, contributing to transparency and traceability in its cocoa supply chain.

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EFA News - European Food Agency
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