Barry Callebaut: Strong volume growth, product margins improved, continued investment in future growth

Marketwired

ZURICH, SWITZERLAND--(Marketwired - Apr 8, 2013) - Barry Callebaut - Half-year results,fiscal year 2012/13

* Strong, broad-based volume growth, significantly outperforming theglobal chocolate market[1]: sales volume +7.8%, fueled by strategic growthdrivers outsourcing, Gourmet and emerging markets

* Product margins improved; gross profit up +4.9% in local currencies(+5.5% in CHF) despite an unfavorable combined cocoa ratio[2]. EBIT decreasedby 2.4% in local currencies (-2.1% in CHF)

* Closing and integration plan for Cocoa Ingredients Division acquisitionfrom Petra Foods well on track

* Growth targets confirmed[3]

* Fernando Aguirre and Timothy Minges nominated for election as new Board members

Juergen Steinemann, CEO of Barry Callebaut said: "We continued to deliverstrongvolume growth, significantly outperforming the global chocolate market. Wegrewin all Regions and Product Groups thanks to our strategic growth driversoutsourcing, Gourmet and emerging markets. We were able to improve ourproductmargins. Our EBIT was impacted by the unfavorable combined cocoa ratio aswellas additional factory and supply chain costs due to our strong growth insomeregions causing capacity constraints. We continued to invest in theexpansion ofour global footprint, structures and processes."

Group key figures for the first half of fiscal year 2012/13 -from continuing operations


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Change in %

in local in CHF 6 months up 6 months up
currencies to Feb 28, to Feb 29,
2013 2012
---------------------------------------------------------------------------
Sales volume Tonnes 7.8 745,256 691,061
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Sales revenue CHF m (2.6) (2.4) 2,391.6 2,449.6
---------------------------------------------------------------------------
Gross profit CHF m 4.9 5.5 357.3 338.8
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Operating
profit (EBIT) CHF m (2.4) (2.1) 173.8 177.6
---------------------------------------------------------------------------
EBIT per tonne CHF (9.5) (9.3) 233.2 257.0
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Net profit CHF m (7.7) (7.4) 116.4 125.7
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Zurich/Switzerland - April 8, 2013 - In the first six months of fiscal year2012/13 (ended February 28, 2013), Barry Callebaut - the world's leadingmanufacturer of high-quality cocoa and chocolate products - stronglyincreasedits sales volume by 7.8% to 745,256 tonnes, significantly outpacing theglobalchocolate confectionery market[1]. Top-line growth was broadly based,driven bylong-term outsourcing agreements and strategic partnerships, Gourmet andemerging markets. All Product Groups and Regions contributed to thisgrowth.Sales revenue: Based on its cost-plus model, Barry Callebaut passes on rawmaterial prices to customers for 80% of its business. The lower averagepricesfor cocoa ingredients (cocoa beans, cocoa butter, and cocoa powder)compared tothe previous year translated into lower sales revenue. As a result, salesrevenue went down by 2.6% in local currencies (-2.4% in CHF) to CHF 2,391.6million despite the volume growth.

Gross profit increased by 4.9% in local currencies (+5.5% in CHF) to CHF357.3million, driven by higher volume and improved product margins, partlyoffset bythe effect of a lower combined cocoa ratio[2]. In addition, the stronggrowth insome regions caused capacity constraints, which led to additional factoryandsupply chain costs.

Operating profit (EBIT) was impacted by ongoing investments in structures,processes and people to accommodate future growth. Additionally, the Groupincreased its marketing activities for the global Gourmet brands, andincurredfirst costs related to the acquisition of Petra Foods' Cocoa IngredientsDivision. Consequently, EBIT declined by 2.4% in local currencies (-2.1% inCHF)to CHF 173.8 million.

Net profit for the period from continuing operations decreased by 7.7% inlocalcurrencies (-7.4% in CHF) to CHF 116.4 million, mainly as a result of thelowerEBIT in combination with an increase in net financial expenses and taxes.

Outlook - Continuation of robust growth, delivering on targets[3]

CEO Juergen Steinemann on the outlook: "Based on our four strategicpillars,Expansion, Innovation, Cost Leadership and Sustainable Cocoa, we willcontinueto deliver robust volume growth. The focus on product margins will remainimportant. We expect cocoa processing results to increase in the secondhalf ofour fiscal year. Our cost base will grow at a slower pace than volume,exceptfor non-recurring costs related to the closing and integration of theacquisition of the Cocoa Ingredients Division from Petra Foods. Consideringallthis, we are confident of delivering on our mid-term guidance."

Strategic developments - Closing for Cocoa Ingredients Division acquisitionfromPetra Foods well on track

In December Barry Callebaut announced its intention to acquire the CocoaIngredients Division of Petra Foods in order to support the further growthofits chocolate business. This transaction will boost Barry Callebaut'spresencein fast growing emerging markets to almost one-third of the Group's salesvolumeand enable the company to capitalize on the attractive growth rates inthesemarkets for cocoa powder-based applications in beverages, compoundchocolates,fillings, bakery products and ice cream. In addition, the acquisition willstrengthen Barry Callebaut's current and future partnership agreements asthereis a trend towards combined contracts (cocoa and chocolate products). Itwillalso add Asia as a strong sourcing base next to West Africa. Deal closeactivities are well on track. A joint integration taskforce has starteddeveloping an integration masterplan to be implemented upon the closing ofthe transaction, which is expected to takeplace in summer 2013. As expected, the acquisition of Petra Foods' CocoaIngredients Division led to arecent rating action by Standard & Poor's which assigned a BB+ rating toBarryCallebaut AG, down from BBB-.

Barry Callebaut is currently preparing the financing of the acquisition tocancel the bridge loan facility and replace it by issuing a combination ofnewequity for an equivalent amount of USD 300 million and a USD 600 millionRule144A/Reg S USD bond offering.

In January Barry Callebaut strengthened its leadership position inScandinaviathrough the acquisition of ASM Foods AB in Sweden from Danish Carletti A/S.WithASM Foods, Barry Callebaut is enhancing its portfolio of higher-marginproductssuch as specialty compound chocolates, fillings and inclusions for both itsindustrial and Gourmet business. In the same transaction, Carletti A/SbecameBarry Callebaut's first outsourcing partner in Scandinavia. In addition,theGroup signed its first outsourcing agreement in South America with ArcorGroupin Chile.

In terms of geographic expansion, four factories are currently underconstruction: A chocolate factory in Eskisehir, Turkey, a cocoa factory inMakassar, Indonesia, both going on stream in fall 2013, as well as twochocolatefactories in Santiago de Chile and in Takasaki, Japan, scheduled to beoperational in the first half of 2014.

The completion of the sale of the Dijon factory in November 2012 marked thefinal step in the disposal of all consumer activities.

Regional / Segment performance

Region Europe[5] - Solid growth, both top and bottom line

European chocolate confectionery markets grew by 2.0%. Growth in WesternEuropewas +1.4%, markets in Eastern Europe went up 3.4%[1].

Notwithstanding the still challenging market environment - especially inSouthern Europe - Barry Callebaut achieved solid growth in Region Europe:Overall sales volume moved up strongly by 5.8% to 377,458 tonnes. Growth inWestern Europe was driven by higher sales of both standard (chocolate andcompound) and specialties products (fillings, decorations, nut products) intheFood Manufacturers Products business. Despite the difficult marketenvironment,the Gourmet business achieved good, single-digit growth, supported by thecompany's Belgian Gourmet brand Callebaut®. Volumes in the Beveragesdivisionpicked up.

The industrial business in Eastern Europe, Middle East and Africa (EEMEA)grewdouble-digit in Russia, the Middle East and Turkey. Here, the Gourmet &Specialties Products business continued to record double-digit volumegrowththanks to a particular strong performance of Callebaut® in Russia.

Overall sales revenue in Region Europe increased by 3.1% in localcurrencies(+3.0% in CHF) to CHF 1,186.2 million. Operating profit (EBIT) developmentevenexceeded the good volume and sales revenue development: EBIT rose 8.1% inlocalcurrencies (+8.6% in CHF) to CHF 127.5 million) as a result of improvedmargins.

Region Americas - Continued double-digit top-line growth, strongbottom-line Performance

The chocolate confectionery market in the U.S. decreased by 1.3%; Brazilwas at-0.7%[1].Barry Callebaut maintained the double-digit growth pace in Region Americas.Sales volume increased by 13.6% to 200,434 tonnes. In North America, growthwasmainly driven by the company's global accounts in the Food ManufacturersProducts business. The Gourmet business continued to grow double-digit inNorthAmerica and sales volume in South America was again substantially higher.Mexicowas a strong performer, doubling volumes compared to last year. Salesrevenue inthe Region went up 1.6% in local currencies (+3.6% in CHF) to CHF 567.2millionas result of lower raw material prices. Volume growth positively influencedtheregional operating result: Operating profit (EBIT) rose by 8.7% in localcurrencies (+10.4% in CHF) to CHF 49.8 million.

Region Asia-Pacific - Double-digit volume growth

Chocolate markets in Asia grew by 11.6%, again outperforming the growth inotherworld regions, although still from a lower base[6].In Region Asia-Pacific, Barry Callebaut continued to grow double-digit.Overallsales volume increased by 11.9% to 30,915 tonnes. Growth was driven bystrategicpartnerships in the Food Manufacturers Products business. In the Gourmet &Specialty Products business, Callebaut® achieved broadly based,double-digitvolume growth; overall growth was also strongly supported by wellperforminglocal brands. Both in the industrial and the Gourmet business, China wasthebest performing country.Due to lower average raw material prices compared to last year, salesrevenue inthe Region increased by 0.3% in local currencies (+1.0% in CHF) to CHF118.1million. Operating profit (EBIT) was negatively impacted by a higher costbaseas a result of ongoing expansion: EBIT decreased by 2.5% in localcurrencies(-1.3% in CHF) to CHF 15.0 million.

Global Sourcing & Cocoa[7] - Combined cocoa ratio[2] affected profitability

Cocoa terminal market prices traded above the GBP 1,700 threshold earlySeptember due to uncertainties with regard to the development of the maincropand the implementation of the Cocoa Reform in Côte d'Ivoire. In thefollowingmonths, prices continuously retreated and closed at GBP 1,429 at the end ofFebruary. The downward move was mostly caused by the liquidation of funds'longpositions and, more recently, by good prospects for the size of theupcomingmid-crop, starting in May.

The sugar crop 2012/13 was very good; the world market closed the 3rd yearina row in a surplus. After peaking last October, world sugar prices steadilydeclined. Funds going short put additional downward pressure on prices. Bytheend of February, world market prices for sugar were at a two-year low. IntheEU, special measures were taken to supply the sugar market by increasingtheimport quota. EU sugar prices stayed at the same, still rather high levels.

Milk powder prices in Europe remained flat, but on high levels, due tobalancedsupply and demand. In contrast, world market prices increased and reachedEUlevels at the end of February due to lower overall supply in the market andinanticipation of a drier season in New Zealand, which would lead to lesssupplyin the near future.

The segment Global Sourcing & Cocoa expanded its total third party salesvolumeby 4.9% to 136,449 tonnes, despite a downturn in powder demand in the U.S.andEurope. Compared to last year, sales prices for cocoa ingredients (cocoabutter,cocoa liquor, and cocoa powder) were significantly lower. Therefore, salesrevenue declined by 17.2% in local currencies (-18.0% in CHF) to CHF 520.1million. As expected, the combined cocoa ratio[2] had a negative effect oncocoaprocessing profitability and as a result operating profit (EBIT) dropped by37.5% in local currencies (-40.4% in CHF) to CHF 19.8 million.

Proposals to the Extraordinary General Meeting of Shareholders (EGM)

Authorized capital increase

As announced on March 27, 2013, the Board of Directors of Barry Callebauthascalled for an Extraordinary General Meeting of Shareholders (EGM) on April22, 2013 proposing to create authorized share capital for the purpose ofpartlyfinancing the acquisition of the Cocoa Ingredients Division from PetraFoods.

Election of two new members to the Board of Directors

Furthermore, the Board of Directors also proposes to the EGM the electionofFernando Aguirre and Timothy E. Minges as new members of the Board ofDirectorsof Barry Callebaut for the current term of office until the next ordinaryGeneral Meeting on December 11, 2013.

Fernando Aguirre served as the Chairman and CEO of Chiquita BrandsInternationalInc. from 2004 until 2012. Presently Mr. Aguirre is a consultant toChiquita anda Director of Levi Strauss & Co. as well as a Director at Aetna Inc.

Timothy E. Minges is currently Chairman of PepsiCo Greater China Region andamember of PepsiCo's Executive Committee. Mr. Minges also serves on theBoard ofTingyi-Asahi Beverage.

(see separate CVs for further details)

***

For more detailed financial information see Barry Callebaut's Letter toInvestors 'Half-year results 2012/13':www.barry-callebaut.com/documentation#c1212.

***



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Financial calendar for fiscal year 2012/13 (September 1, 2012 to August
31, 2013):
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Extraordinary General Meeting of Shareholders April 22, 2013
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9-month key sales figures 2012/13 (news release) July 4, 2013
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Full-year results 2012/13 (news release &
conference) November 7, 2013, Zurich
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Annual General Meeting 2012/2013 December 11, 2013, Zurich

***

Barry Callebaut (www.barry-callebaut.com/):

With annual sales of about CHF 4.8 billion (EUR 4.0 billion / USD 5.2billion)for fiscal year 2011/12, Zurich-based Barry Callebaut is the world'sleadingmanufacturer of high-quality cocoa and chocolate - from the cocoa bean tothefinest chocolate product. Barry Callebaut operates out of 30 countries,runsmore than 45 production facilities and employs a diverse and dedicatedworkforceof about 6,000 people. Barry Callebaut serves the entire food industryfocusingon industrial food manufacturers, artisans and professional users ofchocolate(such as chocolatiers, pastry chefs or bakers), the latter with its twoglobalbrands Callebaut® and Cacao Barry®. Barry Callebaut is the globalleader incocoa and chocolate innovations and provides a comprehensive range ofservicesin the fields of product development, processing, training and marketing.Costleadership is another important reason why global as well as local foodmanufacturers work together with Barry Callebaut. Through its CocoaHorizonsinitiative and research activities, the company engages with farmers,farmerorganizations and other partners to help ensure future supplies of cocoaandimprove farmer livelihoods.

***


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Media and Analysts'/Institutional Investors' conferences of Barry
Callebaut AG
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Date: Monday, April 8, 2013
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Location: Barry Callebaut Head Office, Chocolate Academy, Groundfloor,
Pfingstweidstrasse 60, Westpark, 8005 Zurich/Switzerland
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Time: Media: 09.30 am to 10.30 am CET
Analysts/Institutional Investors: 11.30 to approx. 1 pm CET
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The onferences can be followed by telephone or audio webcast. All dial-in
and access details can be found on the Barry Callebaut website:
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Media
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Analysts/Institutional Investors
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***


Group key figures for the first half of fiscal year 2012/13 -
from continuing operations
---------------------------------------------------------------------------


Change in %

in local 6 months up 6 months up
currencies in CHF to Feb 28, to Feb 29,
2013 2012[4]
---------------------------------------------------------------------------


Group
---------------------------------------------------------------------------
Sales volume Tonnes 7.8 745,256 691,061
---------------------------------------------------------------------------
Sales revenue CHF m (2.6) (2.4) 2,391.6 2,449.6
---------------------------------------------------------------------------
EBITDA CHF m 1.8 2.1 220.1 215.6
---------------------------------------------------------------------------
Operating profit (2.4) (2.1) 173.8 177.6
(EBIT) CHF m
---------------------------------------------------------------------------
Net profit CHF m (7.7) (7.4) 116.4 125.7
---------------------------------------------------------------------------
Net profit (incl.
discontinued
operations) CHF m 22.0 22.4 110.3 90.1
---------------------------------------------------------------------------

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By Region
---------------------------------------------------------------------------
Europe
---------------------------------------------------------------------------
Sales volume Tonnes 5.8 377,458 356,888
---------------------------------------------------------------------------
Sales revenue CHF m 3.1 3.0 1,186.2 1,151.4
---------------------------------------------------------------------------
EBITDA CHF m 8.5 9.0 143.1 131.3
---------------------------------------------------------------------------
Operating Profit 8.1 8.6 127.5 117.4
(EBIT) CHF m
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Americas
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Sales volume Tonnes 13.6 200,434 176,446
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Sales revenue CHF m 1.6 3.6 567.2 547.4
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EBITDA CHF m 13.7 15.1 60.7 52.7
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Operating profit 8.7 10.4 49.8 45.1
(EBIT) CHF m
---------------------------------------------------------------------------

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Asia-Pacific
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Sales volume Tonnes 11.9 30,915 27,639
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Sales revenue CHF m 0.3 1.0 118.1 116.9
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EBITDA CHF m 0.7 1.6 18.2 17.9
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Operating Profit (2.5) (1.3) 15.0 15.2
(EBIT) CHF m
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Global Sourcing &
Cocoa
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Sales volume Tonnes 4.9 136,449 130,088
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Sales revenue CHF m (17.2) (18.0) 520.1 633.9
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EBITDA CHF m (21.3) (23.6) 34.9 45.6
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Operating Profit (37.5) (40.4) 19.8 33.2
(EBIT) CHF m
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By Product Group
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Sales Volume Tonnes 7.8 745,256 691,061
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Cocoa Products Tonnes 4.9 136,449 130,088
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Food Manufacturers 8.8 524,738 482,336
Products Tonnes
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Gourmet & 6.9 84,069 78,637
Specialties
Products Tonnes
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---------------------------------------------------------------------------
Sales Revenue CHF m (2.6) (2.4) 2,391.6 2,449.6
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Cocoa Products CHF m (17.2) (18.0) 520.1 633.9
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Food Manufacturers 1.9 2.6 1,455.1 1,418.3
Products CHF m
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Gourmet & 4.5 4.8 416.4 397.4
Specialties
Products CHF m
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[1] The global chocolate confectionery market grew by 1.5% in volume in theperiod September 2012 until January 2013. Source: Nielsen.

[2] Combined sales prices for cocoa butter and cocoa powder relative to thecocoa bean price. For cocoa processors, profitability depends on the ratiobetween input costs (price of cocoa beans) and output prices (price ofcocoabutter and powder).

[3] Mid-term growth targets for 2011/12-2014/15: On average 6-8% volumegrowthand average EBIT growth in local currencies at least in line with volumegrowth- barring any unforeseen events.

[4] Restated figures due to the divestiture of the consumer business.

[5] Including Western Europe, Eastern Europe, Middle East and Africa.

[6] China (+4.1%) and India (+16.3%); Source: Nielsen, September 2012 untilJanuary 2013.

[7] The figures reported under "Global Sourcing & Cocoa" include all salesofcocoa products to third-party customers in all Regions while the figuresshownunder the respective Region show all chocolate sales.

The complete news release and CVs can be downloaded from the followinglinks:

News Release (PDF):http://hugin.info/100441/R/1690938/555159.pdf

CV - Candidate 2: Mr. Timothy E. Minges (PDF):http://hugin.info/100441/R/1690938/555164.pdf

CV - Candidate 1: Mr. Fernando Aguirre (PDF):http://hugin.info/100441/R/1690938/555163.pdf



This announcement is distributed by Thomson Reuters on behalf ofThomson Reuters clients. The owner of this announcement warrants that:

(i) the releases contained herein are protected by copyright and other applicable laws; and

(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.

Source: Barry Callebaut via Thomson Reuters ONE

[HUG#1690938]

Contact:

Contact

for investors and financial analysts:
Evelyn Nassar
Head of Investor Relations
Barry Callebaut AG
Phone: +41 43 204 04 23
Email Contact

for the media:
Raphael Wermuth
Head of Media Relations
Barry Callebaut AG
Phone: +41 43 204 04 58
Email Contact

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