Profits drop at Barry Callebaut after plant closed earlier this year

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The Zurich-based group said operating profit fell 2.3% to 553.5 million Swiss francs ($557.6 million), missing analysts’ forecast of 586.5 million francs.

In its statement, Barry Callebaut said profit was hit by the one-time impact of 76.9 million francs linked to the outbreak of salmonella in June at its main factory in Wieze.

Peter Boone, the group’s leader, told the media it was still on track to meet its medium-term targets in its 2022-23 financial year. “Our Wieze plant is operating at normal capacity again, although we will still be impacted in Q1 2022-23 as we catch up on delayed volume. I would like to thank all the colleagues involved for their hard work in cleaning the plant and all our customers for their loyalty and cooperation.​.”

Innovation

British Columbia’s “2nd generation chocolate”. Photo: Barry Callebaut

At a launch in Venice last month, Barry Callebaut showed off a groundbreaking innovation in redesigning how chocolate is made. With the advancements in the process of growing, fermenting and roasting cocoa beans, he said chocolate lovers can indulge in the purity of cocoa flavors because the recipe for the new “2nd generation chocolate” contains only the essential ingredients. Dark chocolate is made only of cocoa and sugar, while milk chocolate also contains dairy products. In introducing this innovation, Barry Callebaut said in the statement that it is supporting brands and artisans to launch innovative and exciting chocolate creations in confectionery, bakery, patisserie, desserts and ice cream.

Sustainability

Also this year, Barry Callebaut collaborated with the Conseil Café Cacao (CCC) in Côte d’Ivoire on a traceability pilot project in the Aboisso region, which includes merging Group data with government-owned farmer data. . The goal of the trial project is to incorporate the learnings into a consolidated national farm database currently under construction by CCC.

In his annual report, published with the annual figures, he said he had to “add a new ambition​” to its Forever Chocolate Plan. “In fiscal year 2022-23, we will present a refined set of targets, using our ongoing Forever Chocolate targets for 2025 as a springboard“, did he declare.

Our sixth Forever Chocolate progress report, covering fiscal year 2021-22, shows that we continue to scale up our business by partnering with customers as well as societal and industry stakeholders to create impact. tangible on the ground, while publicly advocating for policies to make sustainable chocolate the norm​.”

Raw material costs

On average, the price of cocoa beans increased by +4.2% compared to the previous year. While global bean supply and demand expectations for 2021-22 point to a shortfall, large stocks from the previous year’s surpluses allow sufficient supply of beans, which should lead to a more global situation. balanced, confirmed the Group.

The world sugar market price increased on average by +18.7%. This is explained by a significantly weaker Brazilian harvest and a macro-economic environment impacted by high energy prices and geopolitical uncertainties. Sugar prices in Europe increased by an average of +56.4% during the financial year 2021-22. Robust demand faced weak supply due to reduced acreage and dry weather.

Medium-term orientation

Despite the disruption, volume growth was within the range of Barry Callebaut’s medium-term guidance for increases of 5% to 7%. But it missed its target of growing its operating profit in local currencies to a level above volumes, with only a 0.1% increase.

Supported by the consistency of our growth strategy and the strength of our innovation pipeline, we are on track to achieve our medium-term objectives in fiscal year 2022-23.“, Boone said. “We are presenting a solid results package, delivering profitable volume growth throughout the year, supported by all Regions and all segments, in particular Gourmet & Specialties. Our large geographic footprint and customer base, along with our honed business model and strong balance sheet, continued to provide a strong foundation for growth​.”

Reuters said its shares were up 0.5% on the Swiss stock exchange after the earnings release.

Change to the Executive Committee

In a separate announcement, the Group announced that Olivier Delaunay, Chief Operations Officer, will be leaving Barry Callebaut with Jo Thys as COO effective January 1, 2023.

“After having successfully served as Chief Operations Officer (COO) of the Group since September 1, 2019, Olivier Delaunay has decided to leave Barry Callebaut for personal reasons. The Board of Directors has appointed Barry Callebaut’s current Asia-Pacific President and Executive Committee member, Jo Thys, as the new COO, effective January 1, 2023.’

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