Acquisition costs affect Barry Callebaut profit
by Jeff Gelski
ZURICH, SWITZERLAND — Sales volume jumped 11% in the fiscal year for Barry Callebaut, but costs associated with acquiring the cocoa business of Petra Foods, Ltd. helped to bring about a decline in profit.
Barry Callebaut recorded net profit of 229.3 million Swiss francs ($248.6 million) in the fiscal year ended Aug. 31, which compared with 241.1 million Swiss francs in the previous fiscal year. Operating profit (EBIT) was 339.6 million Swiss francs, down from 353.2 million Swiss francs. One-off costs related to the cocoa business acquisition and the expected operational loss of the business impacted total EBIT, Barry Callebaut said.
Excluding the acquisition, operating profit (EBIT) was 368.8 million Swiss francs, up from 353.2 million Swiss francs.
Sales volume in the fiscal year increased 11% to 1,535,662 tonnes from 1,378,856 tonnes. Sales revenue increased 1% to 4,884.1 million Swiss francs ($5,296.4 million) from $4,829.5 million Swiss francs. On a stand-alone basis, sales revenue decreased by 1.9% in local currencies to 4,756.4 million Swiss francs, which reflected the lower average raw material prices compared to the previous year.
“I am proud of the excellent volume growth we have achieved, notably with strategic partnerships, in emerging markets and in our gourmet business,” Juergen Steinemann, chief executive officer of Zurich-based Barry Callebaut, said when results were given Nov. 7. “This growth is even more remarkable against the background of a challenging market environment in some regions.
“Equally, I am pleased that our product margins further improved and profitability gained momentum in a period when we significantly invested in structures and processes. The integration of our newly acquired cocoa business is progressing well, and I am happy to confirm the synergy potential announced earlier.”
Barry Callebaut closed the cocoa business acquisition on June 30, but when the company in September sought a reduction in the closing price, Singapore-based Petra Foods Ltd. objected. The two companies planned to apply a dispute resolution mechanism.
In Barry Callebaut’s Region Americas, the U.S. chocolate confectionery market decreased by 0.9% in the fiscal year. Region Americas overall achieved 17% volume growth. EBIT increased 19% in Region Americas to 107.6 million Swiss francs.
Partnership agreements in the gourmet business and the integration of the Mona Lisa decoration business fueled volume increases in North America and Mexico. Brazil achieved double-digit top-line growth.