Barry Callebaut: Strong volume growth, product margins improved, continued investment in future growth

Barry Callebaut: Strong volume growth, product margins improved, continued 
investment in future growth 
ZURICH, SWITZERLAND -- (Marketwired) -- 04/08/13 --  Barry Callebaut
- Half-year results, fiscal year 2012/13 
* Strong, broad-based volume growth, significantly outperforming
the global 
chocolate market[1]: sales volume +7.8%, fueled by
strategic growth drivers 
outsourcing, Gourmet and emerging
markets 
* Product margins improved; gross profit up +4.9% in local
currencies (+5.5% 
in CHF) despite an unfavorable combined cocoa
ratio[2]. EBIT decreased by 
2.4% in local currencies (-2.1% in
CHF) 
* Closing and integration plan for Cocoa Ingredients Division
acquisition from 
Petra Foods well on track 
* Growth targets confirmed[3] 
* Fernando Aguirre and Timothy Minges nominated for election as new
Board     members 
Juergen Steinemann, CEO of Barry Callebaut said: "We continued to
deliver strong
volume growth, significantly outperforming the global
chocolate market. We grew
in all Regions and Product Groups thanks to
our strategic growth drivers outsourcing, Gourmet and emerging
markets. We were able to improve our product
margins. Our EBIT was
impacted by the unfavorable combined cocoa ratio as well
as
additional factory and supply chain costs due to our strong growth in
some
regions causing capacity constraints. We continued to invest in
the expansion of our global footprint, structures and processes." 
Group key figures for the first half of fiscal year 2012/13 - from
continuing operations 


 
-----------------------------------------------------------------
----------                          Change in %
 
                          in local     in CHF    6 months up    6 months up
                          currencies             to Feb 28,     to Feb 29,
                                                 2013           2012
---------------------------------------------------------------------------
Sales volume     Tonnes                   7.8     745,256         691,061
---------------------------------------------------------------------------
Sales revenue    CHF m        (2.6)      (2.4)      2,391.6         2,449.6
---------------------------------------------------------------------------
Gross profit     CHF m         4.9        5.5         357.3           338.8
---------------------------------------------------------------------------
Operating
profit (EBIT)    CHF m        (2.4)      (2.1)        173.8           177.6
---------------------------------------------------------------------------
EBIT per tonne   CHF          (9.5)      (9.3)        233.2           257.0
---------------------------------------------------------------------------
Net profit       CHF m        (7.7)      (7.4)        116.4           125.7
---------------------------------------------------------------------------

 
Zurich/Switzerland - April 8, 2013 - In the first six months of fiscal
year 2012/13 (ended February 28, 2013), Barry Callebaut - the world's
leading manufacturer of high-quality cocoa and chocolate products -
strongly increased
its sales volume by 7.8% to 745,256 tonnes,
significantly outpacing the global
chocolate confectionery market[1].
Top-line growth was broadly based, driven by long-term outsourcing
agreements and strategic partnerships, Gourmet and emerging markets.
All Product Groups and Regions contributed to this growth.
Sales
revenue: Based on its cost-plus model, Barry Callebaut passes on raw
material prices to customers for 80% of its business. The lower
average prices
for cocoa ingredients (cocoa beans, cocoa butter, and
cocoa powder) compared to the previous year translated into lower
sales revenue. As a result, sales revenue went down by 2.6% in local
currencies (-2.4% in CHF) to CHF 2,391.6 million despite the volume
growth. 
Gross profit increased by 4.9% in local currencies (+5.5% in CHF) to
CHF 357.3
million, driven by higher volume and improved product
margins, partly offset by the effect of a lower combined cocoa
ratio[2]. In addition, the strong growth in some regions caused
capacity constraints, which led to additional factory and
supply
chain costs. 
Operating profit (EBIT) was impacted by ongoing investments in
structures, processes and people to accommodate future growth.
Additionally, the Group increased its marketing activities for the
global Gourmet brands, and incurred
first costs related to the
acquisition of Petra Foods' Cocoa Ingredients Division. Consequently,
EBIT declined by 2.4% in local currencies (-2.1% in CHF)
to CHF 173.8
million. 
Net profit for the period from continuing operations decreased by
7.7% in local
currencies (-7.4% in CHF) to CHF 116.4 million, mainly
as a result of the lower
EBIT in combination with an increase in net
financial expenses and taxes. 
Outlook - Continuation of robust growth, delivering on targets[3] 
CEO Juergen Steinemann on the outlook: "Based on our four strategic
pillars,
Expansion, Innovation, Cost Leadership and Sustainable
Cocoa, we will continue
to deliver robust volume growth. The focus on
product margins will remain important. We expect cocoa processing
results to increase in the second half of our fiscal year. Our cost
base will grow at a slower pace than volume, except
for non-recurring
costs related to the closing and integration of the acquisition of
the Cocoa Ingredients Division from Petra Foods. Considering
all
this, we are confident of delivering on our mid-term guidance." 
Strategic developments - Closing for Cocoa Ingredients Division
acquisition from
Petra Foods well on track 
In December Barry Callebaut announced its intention to acquire the
Cocoa Ingredients Division of Petra Foods in order to support the
further growth of
its chocolate business. This transaction will boost
Barry Callebaut's presence
in fast growing emerging markets to almost
one-third of the Group's sales volume
and enable the company to
capitalize on the attractive growth rates in these
markets for cocoa
powder-based applications in beverages, compound
chocolates,
fillings, bakery products and ice cream. In addition, the
acquisition will strengthen Barry Callebaut's current and future
partnership agreements as there
is a trend towards combined contracts
(cocoa and chocolate products). It will
also add Asia as a strong
sourcing base next to West Africa. Deal close activities are well on
track. A joint integration taskforce has started developing an
integration masterplan to be implemented upon the closing of the
transaction, which is expected to take place in summer 2013. As
expected, the acquisition of Petra Foods' Cocoa Ingredients Division
led to a recent rating action by Standard & Poor's which assigned a
BB+ rating to Barry
Callebaut AG, down from BBB-. 
Barry Callebaut is currently preparing the financing of the
acquisition to cancel the bridge loan facility and replace it by
issuing a combination of new
equity for an equivalent amount of USD
300 million and a USD 600 million Rule
144A/Reg S USD bond offering. 
In January Barry Callebaut strengthened its leadership position in
Scandinavia
through the acquisition of ASM Foods AB in Sweden from
Danish Carletti A/S. With
ASM Foods, Barry Callebaut is enhancing its
portfolio of higher-margin products
such as specialty compound
chocolates, fillings and inclusions for both its industrial and
Gourmet business. In the same transaction, Carletti A/S became
Barry
Callebaut's first outsourcing partner in Scandinavia. In addition,
the
Group signed its first outsourcing agreement in South America
with Arcor Group
in Chile. 
In terms of geographic expansion, four factories are currently under
construction: A chocolate factory in Eskisehir, Turkey, a cocoa
factory in Makassar, Indonesia, both going on stream in fall 2013, as
well as two chocolate
factories in Santiago de Chile and in Takasaki,
Japan, scheduled to be operational in the first half of 2014. 
The completion of the sale of the Dijon factory in November 2012
marked the final step in the disposal of all consumer activities. 
Regional / Segment performance 
Region Europe[5] - Solid growth, both top and bottom line 
European chocolate confectionery markets grew by 2.0%. Growth in
Western Europe
was +1.4%, markets in Eastern Europe went up 3.4%[1]. 
Notwithstanding the still challenging market environment - especially
in Southern Europe - Barry Callebaut achieved solid growth in Region
Europe: Overall sales volume moved up strongly by 5.8% to 377,458
tonnes. Growth in Western Europe was driven by higher sales of both
standard (chocolate and compound) and specialties products (fillings,
decorations, nut products) in the
Food Manufacturers Products
business. Despite the difficult market environment,
the Gourmet
business achieved good, single-digit growth, supported by the
company's Belgian Gourmet brand Callebaut(R). Volumes in the
Beverages division
picked up. 
The industrial business in Eastern Europe, Middle East and Africa
(EEMEA) grew
double-digit in Russia, the Middle East and Turkey. Here,
the Gourmet & Specialties Products business continued to record
double-digit volume growth
thanks to a particular strong performance
of Callebaut(R) in Russia. 
Overall sales revenue in Region Europe increased by 3.1% in local
currencies
(+3.0% in CHF) to CHF 1,186.2 million. Operating profit
(EBIT) development even
exceeded the good volume and sales revenue
development: EBIT rose 8.1% in local
currencies (+8.6% in CHF) to CHF
127.5 million) as a result of improved margins. 
Region Americas - Continued double-digit top-line growth, strong
bottom-line Performance 
The chocolate confectionery market in the U.S. decreased by 1.3%;
Brazil was at -0.7%[1].
Barry Callebaut maintained the double-digit
growth pace in Region Americas. Sales volume increased by 13.6% to
200,434 tonnes. In North America, growth was
mainly driven by the
company's global accounts in the Food Manufacturers Products
business. The Gourmet business continued to grow double-digit in
North
America and sales volume in South America was again
substantially higher. Mexico
was a strong performer, doubling volumes
compared to last year. Sales revenue in the Region went up 1.6% in
local currencies (+3.6% in CHF) to CHF 567.2 million
as result of
lower raw material prices. Volume growth positively influenced
the
regional operating result: Operating profit (EBIT) rose by 8.7%
in local currencies (+10.4% in CHF) to CHF 49.8 million. 
Region Asia-Pacific - Double-digit volume growth 
Chocolate markets in Asia grew by 11.6%, again outperforming the
growth in other
world regions, although still from a lower base[6].
In Region Asia-Pacific, Barry Callebaut continued to grow
double-digit. Overall
sales volume increased by 11.9% to 30,915
tonnes. Growth was driven by strategic
partnerships in the Food
Manufacturers Products business. In the Gourmet & Specialty Products
business, Callebaut(R) achieved broadly based, double-digit
volume
growth; overall growth was also strongly supported by well
performing
local brands. Both in the industrial and the Gourmet
business, China was the
best performing country. Due to lower average
raw material prices compared to last year, sales revenue in the
Region increased by 0.3% in local currencies (+1.0% in CHF) to CHF
118.1
million. Operating profit (EBIT) was negatively impacted by a
higher cost base
as a result of ongoing expansion: EBIT decreased by
2.5% in local currencies
(-1.3% in CHF) to CHF 15.0 million. 
Global Sourcing & Cocoa[7] - Combined cocoa ratio[2] affected
profitability 
Cocoa terminal market prices traded above the GBP 1,700 threshold
early September due to uncertainties with regard to the development of
the main crop
and the implementation of the Cocoa Reform in Cote
d'Ivoire. In the following
months, prices continuously retreated and
closed at GBP 1,429 at the end of February. The downward move was
mostly caused by the liquidation of funds' long
positions and, more
recently, by good prospects for the size of the upcoming
mid-crop,
starting in May. 
The sugar crop 2012/13 was very good; the world market closed the 3rd
year in
a row in a surplus. After peaking last October, world sugar
prices steadily declined. Funds going short put additional downward
pressure on prices. By the
end of February, world market prices for
sugar were at a two-year low. In the
EU, special measures were taken
to supply the sugar market by increasing the
import quota. EU sugar
prices stayed at the same, still rather high levels. 
Milk powder prices in Europe remained flat, but on high levels, due
to balanced
supply and demand. In contrast, world market prices
increased and reached EU
levels at the end of February due to lower
overall supply in the market and in
anticipation of a drier season in
New Zealand, which would lead to less supply
in the near future. 
The segment Global Sourcing & Cocoa expanded its total third party
sales volume
by 4.9% to 136,449 tonnes, despite a downturn in powder
demand in the U.S. and
Europe. Compared to last year, sales prices
for cocoa ingredients (cocoa butter,
cocoa liquor, and cocoa powder)
were significantly lower. Therefore, sales revenue declined by 17.2%
in local currencies (-18.0% in CHF) to CHF 520.1 million. As
expected, the combined cocoa ratio[2] had a negative effect on
cocoa
processing profitability and as a result operating profit
(EBIT) dropped by 37.5% in local currencies (-40.4% in CHF) to CHF
19.8 million. 
Proposals to the Extraordinary General Meeting of Shareholders (EGM) 
Authorized capital increase 
As announced on March 27, 2013, the Board of Directors of Barry
Callebaut has
called for an Extraordinary General Meeting of
Shareholders (EGM) on April 22, 2013 proposing to create authorized
share capital for the purpose of partly
financing the acquisition of
the Cocoa Ingredients Division from Petra Foods. 
Election of two new members to the Board of Directors 
Furthermore, the Board of Directors also proposes to the EGM the
election of
Fernando Aguirre and Timothy E. Minges as new members of
the Board of Directors
of Barry Callebaut for the current term of
office until the next ordinary General Meeting on December 11, 2013. 
Fernando Aguirre served as the Chairman and CEO of Chiquita Brands
International
Inc. from 2004 until 2012. Presently Mr. Aguirre is a
consultant to Chiquita and a Director of Levi Strauss & Co. as well
as a Director at Aetna Inc. 
Timothy E. Minges is currently Chairman of PepsiCo Greater China
Region and a
member of PepsiCo's Executive Committee. Mr. Minges also
serves on the Board of Tingyi-Asahi Beverage. 
(see separate CVs for further details) 
*** 
For more detailed financial information see Barry Callebaut's Letter
to Investors 'Half-year results 2012/13':
www.barry-callebaut.com/documentation#c1212. 
*** 


 
----------------------------------------------------------------
-----------
 Financial calendar for fiscal year 2012/13 (September 1, 2012 to August
 31, 2013):
---------------------------------------------------------------------------
 Extraordinary General Meeting of Shareholders               April 22, 2013
---------------------------------------------------------------------------
 9-month key sales figures 2012/13 (news release)              July 4, 2013
---------------------------------------------------------------------------
 Full-year results 2012/13 (news release &
 conference)                                       November 7, 2013, Zurich
---------------------------------------------------------------------------
 Annual General Meeting 2012/2013                 December 11, 2013, Zurich

                                     *** 
Barry Callebaut (www.barry-callebaut.com/): 
With annual sales of about CHF 4.8 billion (EUR 4.0 billion / USD 5.2
billion)
for fiscal year 2011/12, Zurich-based Barry Callebaut is the
world's leading
manufacturer of high-quality cocoa and chocolate -
from the cocoa bean to the
finest chocolate product. Barry Callebaut
operates out of 30 countries, runs
more than 45 production facilities
and employs a diverse and dedicated workforce
of about 6,000 people.
Barry Callebaut serves the entire food industry focusing
on
industrial food manufacturers, artisans and professional users of
chocolate
(such as chocolatiers, pastry chefs or bakers), the latter
with its two global
brands Callebaut(R) and Cacao Barry(R). Barry
Callebaut is the global leader in cocoa and chocolate innovations and
provides a comprehensive range of services
in the fields of product
development, processing, training and marketing. Cost
leadership is
another important reason why global as well as local food
manufacturers work together with Barry Callebaut. Through its Cocoa
Horizons
initiative and research activities, the company engages with
farmers, farmer
organizations and other partners to help ensure future
supplies of cocoa and
improve farmer livelihoods. 
*** 


 
-----------------------------------------------------------------
----------
Media and Analysts'/Institutional Investors' conferences of Barry
Callebaut AG
---------------------------------------------------------------------------
Date:     Monday, April 8, 2013
---------------------------------------------------------------------------
Location: Barry Callebaut Head Office, Chocolate Academy, Groundfloor,
          Pfingstweidstrasse 60, Westpark, 8005 Zurich/Switzerland
---------------------------------------------------------------------------
Time:     Media: 09.30 am to 10.30 am CET
          Analysts/Institutional Investors: 11.30 to approx. 1 pm CET
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
The onferences can be followed by telephone or audio webcast. All dial-in
and access details can be found on the Barry Callebaut website:
---------------------------------------------------------------------------
Media
---------------------------------------------------------------------------
Analysts/Institutional Investors
---------------------------------------------------------------------------

  
*** 


 
Group key figures for the first half of fiscal year 2012/13 -
from continuing operations
---------------------------------------------------------------------------
 
                            Change in %
 
                            in local              6 months up   6 months up
                            currencies   in CHF   to Feb 28,    to Feb 29,
                                                  2013          2012[4]
---------------------------------------------------------------------------
 
Group
---------------------------------------------------------------------------
Sales volume       Tonnes                 7.8       745,256         691,061
---------------------------------------------------------------------------
Sales revenue       CHF m     (2.6)     (2.4)       2,391.6         2,449.6
---------------------------------------------------------------------------
EBITDA              CHF m       1.8       2.1         220.1           215.6
---------------------------------------------------------------------------
Operating profit              (2.4)     (2.1)         173.8           177.6
(EBIT)              CHF m
---------------------------------------------------------------------------
Net profit          CHF m     (7.7)     (7.4)         116.4           125.7
---------------------------------------------------------------------------
Net profit (incl.
discontinued
operations)         CHF m      22.0      22.4         110.3            90.1
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
By Region
---------------------------------------------------------------------------
Europe
---------------------------------------------------------------------------
Sales volume       Tonnes                 5.8       377,458         356,888
---------------------------------------------------------------------------
Sales revenue       CHF m       3.1       3.0       1,186.2         1,151.4
---------------------------------------------------------------------------
EBITDA              CHF m       8.5       9.0         143.1           131.3
---------------------------------------------------------------------------
Operating Profit                8.1       8.6         127.5           117.4
(EBIT)              CHF m
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
Americas
---------------------------------------------------------------------------
Sales volume       Tonnes                13.6       200,434         176,446
---------------------------------------------------------------------------
Sales revenue       CHF m       1.6       3.6         567.2           547.4
---------------------------------------------------------------------------
EBITDA              CHF m      13.7      15.1          60.7            52.7
---------------------------------------------------------------------------
Operating profit                8.7      10.4          49.8            45.1
(EBIT)              CHF m
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
Asia-Pacific
---------------------------------------------------------------------------
Sales volume       Tonnes                11.9        30,915          27,639
---------------------------------------------------------------------------
Sales revenue       CHF m       0.3       1.0         118.1           116.9
---------------------------------------------------------------------------
EBITDA              CHF m       0.7       1.6          18.2            17.9
---------------------------------------------------------------------------
Operating Profit              (2.5)     (1.3)          15.0            15.2
(EBIT)              CHF m
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
Global Sourcing &
Cocoa
---------------------------------------------------------------------------
Sales volume       Tonnes                 4.9       136,449         130,088
---------------------------------------------------------------------------
Sales revenue       CHF m    (17.2)    (18.0)         520.1           633.9
---------------------------------------------------------------------------
EBITDA              CHF m    (21.3)    (23.6)          34.9            45.6
---------------------------------------------------------------------------
Operating Profit             (37.5)    (40.4)          19.8            33.2
(EBIT)              CHF m
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
 
By Product Group
---------------------------------------------------------------------------
Sales Volume       Tonnes                 7.8       745,256         691,061
---------------------------------------------------------------------------
Cocoa Products     Tonnes                 4.9       136,449         130,088
---------------------------------------------------------------------------
Food Manufacturers                        8.8       524,738         482,336
Products           Tonnes
---------------------------------------------------------------------------
Gourmet &                                 6.9        84,069          78,637
Specialties
Products           Tonnes
---------------------------------------------------------------------------
 
---------------------------------------------------------------------------
Sales Revenue       CHF m     (2.6)     (2.4)       2,391.6         2,449.6
---------------------------------------------------------------------------
Cocoa Products      CHF m    (17.2)    (18.0)         520.1           633.9
---------------------------------------------------------------------------
Food Manufacturers              1.9       2.6       1,455.1         1,418.3
Products            CHF m
---------------------------------------------------------------------------
Gourmet &                       4.5       4.8         416.4           397.4
Specialties
Products            CHF m
---------------------------------------------------------------------------

 
[1] The global chocolate confectionery market grew by 1.5% in volume
in the period September 2012 until January 2013. Source: Nielsen. 
[2] Combined sales prices for cocoa butter and cocoa powder relative
to the cocoa bean price. For cocoa processors, profitability depends
on the ratio between input costs (price of cocoa beans) and output
prices (price of cocoa
butter and powder). 
[3] Mid-term growth targets for 2011/12-2014/15: On average 6-8%
volume growth
and average EBIT growth in local currencies at least in
line with volume growth
- barring any unforeseen events. 
[4] Restated figures due to the divestiture of the consumer business. 
[5] Including Western Europe, Eastern Europe, Middle East and Africa. 
[6] China (+4.1%) and India (+16.3%); Source: Nielsen, September 2012
until January 2013. 
[7] The figures reported under "Global Sourcing & Cocoa" include all
sales of
cocoa products to third-party customers in all Regions while
the figures shown
under the respective Region show all chocolate
sales. 
The complete news release and CVs can be downloaded from the
following links: 
News Release (PDF): http://hugin.info/100441/R/1690938/555159.pdf 
CV - Candidate 2: Mr. Timothy E. Minges (PDF):
http://hugin.info/100441/R/1690938/555164.pdf 
CV - Candidate 1: Mr. Fernando Aguirre (PDF): 
http://hugin.info/100441/R/1690938/555163.pdf 
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants
that: 
(i) the releases contained herein are protected by copyright and    
other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and     
originality of the information contained therein. 
Source: Barry Callebaut via Thomson Reuters ONE 
[HUG#1690938] 
Contact 
for investors and financial analysts:
Evelyn Nassar
Head of Investor Relations
Barry Callebaut AG
Phone: +41 43 204 04 23
evelyn_nassar@barry-callebaut.com 
for the media:
Raphael Wermuth
Head of Media Relations
Barry Callebaut AG
Phone: +41 43 204 04 58
raphael_wermuth@barry-callebaut.com