Barry Callebaut reports strong first quarter

Jan. 21, 2013, Switzerland – In its first quarter of fiscal year 2012-13
(ended Nov. 30, 2012), Barry Callebaut says it experienced an overall
sales volume growth of 8.3 per cent.

Jan. 21, 2013, Switzerland – In its first quarter of fiscal year 2012-13 (ended Nov. 30, 2012), Barry Callebaut says it experienced an overall sales volume growth of 8.3 per cent. All regions contributed to this growth. The food manufacturers products business's sales volume rose by 10 per cent. Sales volume of gourmet and specialties products increased by 5.9 per cent. Sales revenue for the first quarter went down by 1.4 per cent in local currencies (-0.6 per cent in CHF) because comparable sales prices for cocoa ingredients were lower at the time when the business was contracted.

Strategic developments
In December, Barry Callebaut announced its latest and largest acquisition so far. The company will acquire the cocoa ingredients division from Petra Foods. With this, Barry Callebaut will boost its presence in fast-growing emerging markets to almost one-third of the group's sales volume. The company says this will enable it 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. The closing of the transaction is expected in summer 2013.

At the end of November, Barry Callebaut completed the sale of its factory and the related business in Dijon, France, to the newly formed "Chocolaterie de Bourgogne," concluding the final step in the disposal of all of its consumer activities. The company also announced the construction of two new chocolate factories. Barry Callebaut will open a factory for chocolate and compound in Eskisehir, Turkey, late summer 2013. In addition, the company will construct a facility in Santiago de Chile, Chile, after recently signing a long-term outsourcing agreement with Alimentos Dos en Uno S.A. to be operational in early 2014.

Sales volume in Region Europe rose 6.3 per cent to 201,006 tonnes in a market environment which was still depressed in Southern Europe. In the gourmet business, all countries grew except Italy. Sales volume at the beverages division returned to positive growth rates. In Eastern Europe, Middle East and Africa (EEMEA), the food manufacturers products business performed well mainly in Russia, Middle East and Turkey. The gourmet and specialties products business continued to record double-digit volume growth. Overall, sales revenue in the region went up 2.4 per cent in local currencies (1.6 per cent in CHF) to CHF 624.6 million.

Region Americas was again able to achieve double-digit growth rates in the first three months; sales volume increased by 14.7 per cent to 104,898 tonnes. In North America, the company's global accounts in the industrial business and the gourmet business both grew double digit. Mexico continued to report a strong performance. Growth in South America was mainly driven by the vigorous development of the gourmet and specialties product business. Sales revenue rose 1.4 per cent in local currencies (+6.3 per cent in CHF) to CHF 300 million. The lower growth in sales revenue is attributable to lower cocoa ingredient prices, which only recently started increasing again.

Both the industrial and the gourmet businesses showed high double-digit sales volume growth in Barry Callebaut's Asia-Pacific region. Overall, volume rose 17.5 per cent to 15,502 tonnes. Strong growth was recorded in China, Australia, Malaysia and Korea. In the food manufacturers products business, both global and local accounts grew double digit. Growth in the gourmet business was equally driven by Callebaut and local brands; substantial growth was recorded in China and India. Sales revenue in the region increased by 4.2 per cent in local currencies (8 per cent in CHF) to CHF 60.9 million.

Cocoa terminal market prices peaked at around GBP 1,700 in early September due to uncertainties with regards to the main crop as well as the cocoa reform in Côte d'Ivoire. In the following two months, prices moved in a narrow range between GBP 1,500 and 1,600 to close at GBP 1,586 on Nov. 30, 2012, the average level of the last six months. Prices on the world sugar market continued to go down thanks to a very good crop in Brazil. EU sugar prices slightly increased with the start of the new crop in October. Following a strong surge due to the drought in the U.S., milk powder prices stabilized at a high level as of September.

Sales volume in the global sourcing and cocoa segment went up 2.9 per cent to 66,754 tonnes. The growth of this segment was impacted by ongoing expansion at some of the factories, as well as higher internal demand for cocoa powder, which limited sales to third parties. Sales revenue decreased by 12.8 per cent in local currencies (-13.1 per cent in CHF) to CHF 262.9 million. This is mainly because sales prices for cocoa ingredients (cocoa butter, cocoa liquor, and cocoa powder) were lower at the time the business was contracted.