Swiss chocolate maker Barry Callebaut has reported a sales volumes increase of 8.0 percent in the first half of the company’s fiscal year 2017/18 results, which is significantly above the global chocolate market growth rate of +2.5 percent, helped by a strong performance in Europe and accelerating growth in the Americas.

All key growth drivers supported the strong volume growth: Gourmet & Specialties (+7.1 percent), Outsourcing (+8.1 percent) and Emerging Markets (+11.0 percent), as well as the gradual recovery in market demand. Sales revenue declined by -1.8 percent in local currencies (+0.3 percent in CHF) to CHF 3,549.9 million, mainly due to lower cocoa and other raw material prices, which, based on the company’s cost-plus model, are for the majority of its business passed on to customers.

Net profit jumped 33 percent to 173 million Swiss francs (US$180.9 million) on a recurring basis, helped in part by lower net finance costs.

Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, commented on the results: “We had a very strong performance in the first six months of the current fiscal year, which was supported by all product groups and regions, as well as our key growth drivers. This resulted in the continued improvement of our profitability, driven by a favorable mix, operational leverage and a more supportive market.”

Gross profit amounted to CHF 553.0 million (US$576.6 million), corresponding to +15.5 percent in local currencies (+19.2 percent in CHF). The increase, which is significantly above volume growth, was fuelled by a good product and customer mix, and a more supportive market environment.

Looking ahead, CEO Antoine de Saint-Affrique said: “We continue to see healthy market dynamics. We have good visibility in our portfolio and together with the diligent execution of our ‘smart growth’ strategy, we feel confident to deliver on our 4-year guidance.”

Strategic milestones achieved
Expansion: The integration of the recent acquisitions of DOrsogna Dolciaria in Italy, in October 2017, and Gertrude Hawk Ingredients in the US, in December 2017, further expanding Barry Callebaut’s value-adding Specialties & Decorations business, is well on track. Furthermore, to keep serving its customers optimally, Barry Callebaut invested in the expansion of its global chocolate production capacity in Region EMEA, Singapore and Region Americas.

Innovation: Since its launch in September 2017 by Barry Callebaut, the fourth type of chocolate: Ruby, is hitting the consumer market. The first consumer-facing Ruby products were introduced in Japan and South Korea. Barry Callebaut also announced the launch of Ruby for the Gourmet & Specialties customers under the Callebaut brand. The UK and Europe are gearing up for the launch of KitKat Ruby next week. Furthermore, inspired by wine, coffee and craft beer categories, Barry Callebaut introduced a sensory language and tasting ritual for chocolate in January 2018. These tools will enable brands and artisans to help consumers appreciate chocolate even more than they do today. Also, Barry Callebaut‘s sugar-reduced solutions are enticing customers and growing by double-digits.

Sustainability: Barry Callebaut launched its first Forever Chocolate pilot in Indonesia. This is the first in a series of five pilot programs planned in cocoa origin countries that are intended to test theories of change in the quest to accelerate impact in sustainable cocoa production. Barry Callebaut is partnering with Dutch Wageningen University & Research which is providing the Group with robust, scientific support to provide the baseline and analytical framework against which the outcomes can be assessed