Barry Callebaut reports fiscal H1 net profit of 212.1M Swiss francs, up 3.6% in local currencies year-over-year, as sales revenue rises 16.5% to 4B francs

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ZURICH , April 13, 2022 (press release) –

- Strong volume, solid profitability and continued good cash generation

- Sales volume up +8.7%, with outstanding chocolate performance (+9.9%)

- Sales revenue of CHF 4.0 billion, up +16.5% in local currencies (+15.8% in CHF)

- Operating profit (EBIT) recurring [1] of CHF 318.1 million, up +8.0% in local currencies (+7.2% in CHF), EBIT reported up +12.3% in local currencies (+11.5% in CHF)

- Net profit recurring 1 of CHF 212.1 million, up +3.6% in local currencies (+3.1% in CHF), Net profit reported up +9.7% in local currencies (+9.3% in CHF)

- Continued good cash generation with adjusted Free cash flow [2] of CHF 167.0 million

- Confident of delivering on mid-term guidance[3]

Peter Boone, CEO of the Barry Callebaut Group, said: “In the first six months of fiscal year 2021/22 we continued our strong growth trajectory, well ahead of the underlying chocolate confectionery market. A strong performance across the board, in particular in chocolate, delivered strong volume, solid profitability and continued good cash generation.”

Group Key Figures

Disclaimer: The table has been omitted (The document can be viewed at https://www.barry-callebaut.com/sites/default/files/2022-04/PRR%20Barry%20Callebaut%20Group%20Half-Year%20Results%20Fiscal%20Year%202022.pdf).

The Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, reported strong sales volume growth of +8.7% to 1,164,749 tonnes in the first six months of fiscal year 2021/22 (ended on February 28, 2022). Although achieved on a low comparison base, the result is well ahead of the Group’s pre-COVID-19 volume in fiscal year 2018/19 [4] . Excluding the first-time consolidation of Europe Chocolate Company (ECC) as of September 2021, organic volume growth in the period under review was +7.9%. Chocolate volume grew by an outstanding +9.9%, clearly outpacing the underlying global chocolate confectionery market (+2.0%) [5]

The strong growth was supported by all Regions and key growth drivers: Outsourcing (+7.3%), Emerging Markets (+8.7%) and Gourmet & Specialties (+29.5%). Sales volume in Global Cocoa grew by +4.0% to 227,951 tonnes.

Sales revenue amounted to CHF 4,030.3 million, up +16.5% in local currencies (+15.8% in CHF). The increase was impacted by the overall inflationary environment, which Barry Callebaut manages through its cost-plus pricing model for the majority of its business.

Gross profit amounted to CHF 606.4 million, up +7.2% in local currencies (+6.5% in CHF), growing overall in line with volume. The positive volume and mix effect was reduced through the negative impact of the cocoa business and the impairment of financial assets in Russia.

Operating profit (EBIT) recurring 6 amounted to CHF 318.1 million, despite being affected by the aforementioned impairment of financial assets, leading to an increase of +8.0% in local currencies (+7.2% in CHF). The recurring EBIT per tonne was fairly stable at CHF 273, reflecting the strength of the cost-plus model. The recovery of indirect tax credits for prior fiscal periods related to a recent decision by the Brazilian Supreme Court applicable to all taxpayers had a positive impact of CHF +12.8 million. As a result, the reported EBIT amounted to CHF 330.9 million, up +12.3% in local currencies (+11.5% in CHF).

Net profit for the period recurring6 amounted to CHF 212.1 million, up +3.6% in local currencies (+3.1% in CHF) compared to prior-year Net profit. Net profit reported amounted to CHF 224.8 million, up by +9.7% in local currencies (+9.3% in CHF). The increase was supported by higher Operating profit (EBIT), which was partially offset by higher Net financing cost due to higher benchmark interest rates and impairments on cash in emerging markets, in particular in Russia. Income tax expenses amounted to CHF –47.1 million, which corresponds to an effective tax rate of 17.3% (17.4% in prior year).

Net working capital slightly increased to CHF 1,598.8 million from CHF 1,579.1 million in the prior-year period. The increase was well below the Group’s volume growth, thanks to overall good working capital management. Receivables increased on the back of strong business momentum. Inventories were higher to ensure product availability amidst the global supply chain constraints. Both increases were largely offset by higher payables.

Free cash flow continued to strengthen in the six months under review and amounted to CHF –132.6 million compared to CHF –183.4 million in the prior-year period. Adjusted for the effect of cocoa beans considered as readily marketable inventories (RMI), the adjusted Free cash flow amounted to a strong CHF 167.0 million (February 28, 2021: CHF 162.9 million).

Net debt further decreased to CHF 1,594.3 million from CHF 1,752.9 million in the prior-year period, driven by the Group’s strong Free cash flow generation. Taking into consideration the cocoa bean inventories as readily marketable inventories (RMI), the adjusted Net debt decreased to CHF 561.1 million compared to CHF 661.6 million in the prior-year period.

Outlook – Confident of delivering on mid-term guidance

Looking ahead, CEO Peter Boone said: “I am profoundly heartened by the way our colleagues across the globe have come together to support those in need. Our strong team, our global footprint and our cost-plus model make us confident that we can deliver on our mid-term guidance in a continued volatile market environment.”

Footnotes:

[1] Operating profit (EBIT) recurring excluded CHF +12.8 million and Net profit for the period recurring excluded CHF +12.7 million for the recovery of indirect tax credits for prior fiscal periods related to a recent decision by the Brazilian Supreme Court applicable to all taxpayers.

[2] Free cash flow adjusted for the cash flow impact of cocoa bean inventories regarded by the Group as readily marketable inventories (RMI).

[3] On average for the 3-year period 2020/21 to 2022/23: 5–7% volume growth and EBIT above volume growth in local currencies, barring any major unforeseeable events.

[4] Sales volume in the first six months of fiscal year 2018/19: 1,046,695 tonnes.

[5] Source: Nielsen volume growth excluding e-commerce – 25 countries, September 2021 – January/February 2022, data subject to adjustment to match Barry Callebaut’s reporting period. Nielsen data only partially reflects the out-of-home and impulse consumption

[6] Operating profit (EBIT) recurring excluded CHF +12.8 million and Net profit for the period recurring excluded CHF +12.7 million for the recovery of indirect tax credits for prior fiscal periods related to a recent decision by the Brazilian Supreme Court applicable to all taxpayers.

[7] Source: Euromonitor, chocolate confection per capita in Australia in 2021: 5.1 kg.

[8] Source: Nielsen. The volume growth – excluding e-commerce – for the period September 2021 to January/February 2022. Data subject to adjustment to match Barry Callebaut’s reporting period. Nielsen data only partially reflects the out-of-home and impulse consumption.

[9] Operating profit (EBIT) recurring excluded CHF +2.4 million in Region Americas and CHF +10.4 million in Global Cocoa for the recovery of indirect tax credits for prior fiscal periods related to a recent decision by the Brazilian Supreme Court applicable to all taxpayers.

[10] Source: London terminal market prices for 2 nd position, September 2021 to February 2022. Terminal market prices exclude Living Income Differential (LID) and country differentials.

About Barry Callebaut Group (www.barry-callebaut.com):

With annual sales of about CHF 7.2 billion (EUR 6.6 billion / USD 7.9 billion) in fiscal year 2020/21, the Zurich- based Barry Callebaut Group is the world’s leading manufacturer of high-quality chocolate and cocoa products – from sourcing and processing cocoa beans to producing the finest chocolates, including chocolate fillings, decorations and compounds. The Group runs more than 60 production facilities worldwide and employs a diverse and dedicated global workforce of more than 13,000 people.

The Barry Callebaut Group serves the entire food industry, from industrial food manufacturers to artisanal and professional users of chocolate, such as chocolatiers, pastry chefs, bakers, hotels, restaurants or caterers. The global brands catering to the specific needs of these Gourmet customers are Callebaut® and Cacao Barry®, Carma® and the decorations specialist Mona Lisa®.

The Barry Callebaut Group is committed to make sustainable chocolate the norm by 2025 to help ensure future supplies of cocoa and improve farmer livelihoods. It supports the Cocoa Horizons Foundation in its goal to shape a sustainable cocoa and chocolate future.

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