Barry Callebaut reports accelerated top line growth

In the first half of fiscal year 2011/12 (ended February 29, 2012), Barry Callebaut increased its sales volume by 6.7%.

The company says all regions and product groups contributed to the volume growth, which rebounded strongly in Q2 (+11.5%).

First-half sales revenue grew faster than volumes, rising 10.4% in local currencies (+3.0% in CHF).

Gross profit increased by 2.9% in local currencies (-3.9% in CHF).

Operating profit (EBIT) decreased by 5.5% in local currencies, -12.5% after translation into Swiss francs.

It has made significant investments in operating structures to support further growth, ramp-up costs related to recent long-term partnership and outsourcing agreements, investments in the growth of the Gourmet & Specialties Products business as well as multiple capacity expansions led to higher operating expenses, negatively impacting EBIT.

Net profit from continuing operations declined by 11.3% in local currencies (-18.0% in CHF) due to lower EBIT, higher financing costs related to the bond placement in summer 2011 as well as a less favorable tax mix.

"After an anticipated slow start in Q1, we regained momentum in Q2, in all regions and across all product groups. Several major new partnership deals were signed, confirming an important part of our business model. In the last six months, we initiated selective investments in our future growth. This temporarily affected our bottom-line results," Says CEO Juergen Steinemann.

Chocolate markets in Asia continued to outperform all other regions, growing by +6.9%.

The company’s sales volume rose by 7.9% to 28,514 tons.

However, capacity constraints in the food manufacturers’ products business still limited the opportunities for full growth potential.

Recent and future capacity extensions will offer additional growth potential in the region.

Overall, the industrial business accelerated in Q2 driven by corporate accounts.

The gourmet & specialties products business grew substantially at double-digit rates driven by the two global brands Callebaut and Cacao Barry.

Sales revenue increased by 5.5% in local currencies (+1.5% in CHF) to CHF119.8 million ($131.8 million).

Operating profit (EBIT) was positively influenced by the good volume growth and improving margins. EBIT rose by 21.1% in local currencies (+16.3% in CHF) to CHF 15.7 million.