Barry Callebaut Turns Bullish on Chocolate Outlook
April 06 2016 - 4:50AM
Dow Jones News
ZURICH—Barry Callebaut AG is confident of taking a bigger chunk
of the chocolate market, strengthening its position as the world's
largest supplier now that global demand is showing signs of
recovery.
The Zurich-based company, the maker of the chocolate that goes
into Oreo cookies, is seeing demand stabilize in many markets, said
Chief Executive Antoine de Saint-Affrique said on Wednesday.
"The long term forecast for the confectionary market is 1.8%
growth, and we see a stabilization of markets altogether," Mr.
Saint-Affrique said.
Growth in Barry Callebaut's growth in sales volumes to
restaurants as well as to food, ice-cream and drinks manufacturers
like Mondelez International Inc. and Unilever NV contrast with
shrinking global demand for confectionary particularly in some
emerging markets.
"The interesting thing is the decline in some ways is slowing
down, or getting better," said Mr. de Saint-Affrique.
The comments followed Barry Callebaut's announcement of a 19%
drop in net profit for the six months to Feb. 29 to 107.9 million
francs ($112.7 million) from a year earlier on a 5.6% fall in
revenue to CHF3.42 billion.
Fiscal first-half sales volumes rose by 4.5%, a contrast with
the 2.6% decline in the global confectionary market measured by
market research company Nielsen.
"In the global confectionary market, volumes are still negative,
but the value is going up," said Mr. de Saint-Affrique. "Six months
ago we were at -5%, so the trend is improving bit by bit."
Mr. Saint-Affrique's bullish outlook cheered up investors, with
Barry Callebaut stock rising more than 6% in early trading in
Zurich.
Barry Callebaut's first-half results would have been better had
it not been for the strong Swiss franc. Revenue rose 12% in local
currencies.
The franc has soared in value over the past year versus the euro
since the Swiss central bank scrapped a long-standing limit on the
currency's value early last year. Barry Callebaut said it suffered
a "severe" impact in converting its foreign profit back into Swiss
francs.
Sales growth was also tempered by the company reducing some
sales in the cocoa business, with less profitable contracts phased
out. Mr. de Saint-Affrique said Barry Callebaut would be more
"picky" in future.
Management would also continue to look at bolt-on acquisitions,
particularly looking at companies who make high-end chocolate used
by chefs for desserts, he said.
Write to John Revill at john.revill@wsj.com
(END) Dow Jones Newswires
April 06, 2016 04:35 ET (08:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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