The Barry Callebaut Group registered flat sales volume growth (-0.4%) to 492,931 tons during the first three months of fiscal year 2016/17 (ended on November 30, 2016), against a strong base from the prior year.
Overall volume growth was consistently above the declining global chocolate confectionery market (-2.3 %)1 in volume. A good performance in the chocolate business of 2.3% was balanced out by the ongoing and now almost completed intentional discontinuation of less profitable cocoa contracts (-8.6%). Gourmet & Specialties showed outstanding volume growth of 14.3% supported by the acquisition of the beverage powder mixes business from FrieslandCampina Kievit.
Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, said: “We had a steady start to the year with the Cocoa Leadership project on track, all chocolate regions delivering solid growth above the market and Gourmet and Specialties performing very strongly. Our ‘smart growth’ strategy is proving to be the right recipe for a continued challenging market environment.”
Good visibility on volume growth, on track to deliver on ‘smart growth’ strategy
Looking ahead, CEO Antoine de Saint-Affrique said: “We have good visibility on volume growth and expect acceleration in the second half of the fiscal year. We are on track to deliver improved profitability in our cocoa business. The ‘smart growth’ strategy will provide us with the right balance to focus on consistent above-market volume growth, enhanced profitability and free cash flow generation. We confirm our mid-term guidance through 2017/18 of on average: 4-6% volume growth and EBIT above volume growth in local currencies, barring any major unforeseen events.”
Strategic milestones in the first three months of fiscal year 2016/2017
Expansion: In September, Barry Callebaut announced its intention to acquire and integrate the chocolate production facility of Mondelez International in Halle, Belgium, in its network. In addition, Mondelez International will enter into a long-term agreement for the supply of an additional 30,000 tons of liquid chocolate per year. The transaction was closed on December 31, 2016. Furthermore, chocolate capacity expansions were announced in California, US, and in Singapore. The opening of the first chocolate factory in Indonesia was also an important milestone for the Group.
Innovation: Together with a high tech partner in the Netherlands, Barry Callebaut developed a revolutionary 3D chocolate printing capability. With 3D chocolate printing, Barry Callebaut can combine its rich legacy in chocolate making with the technologies of tomorrow, creating new experiences in enjoying chocolate.
Sustainability: In November Barry Callebaut launched its new sustainability strategy Forever Chocolate, targeting 100% sustainable chocolate by 2025. In order to make sustainable chocolate the norm, Forever Chocolate includes four targets that the company expects to achieve by 2025 and that address the biggest sustainability challenges in the chocolate supply chain: child labor, farmer poverty, its carbon and forest footprint and sustainable sourcing. See also: https://www.barry-callebaut.com/new-sustainability-strategy.