Sales volume at Barry Callebaut is dropping.
Barry Callebaut’s sales volume fell 2.9% in the first half of the fiscal year due to destocking priorities from US customers and the requirement for a factory in Belgium to ramp back up. Volume decreased from 1,164,749 tonnes at this time last year to 1,130,742 tonnes for the six-month period that concluded on February 28.
From 224.8 million Swiss francs to 234.3 million Swiss francs ($259 million) in the first half, net profit climbed by 4.2%. A 348.4 million Swiss franc operating profit helped to fund the rise, however higher net financing costs from higher income taxes and benchmark interest rates somewhat countered the gain. From 4.03 billion Swiss francs to 4.18 billion Swiss francs ($4.62 billion), sales revenue climbed by 3.7%. Barry Callebaut used a cost-plus pricing model for the majority of its operations and a positive product mix to handle rising raw material prices and the inflationary environment.
Chocolate and cocoa manufacturer Barry Callebaut, situated in Zurich, predicted a drop in volume for the first quarter. On June 27, 2022, the Weize facility in Belgium ceased operations following the discovery of Salmonella in a production lot. In the first quarter, the Weize factory was still ramping up.
During an April 5 earnings call, Chief Financial Officer Ron De Schryver stated, “We delivered strong profitability in the first half of the fiscal year, reflecting the strength of our business model, which includes continued cost leadership in a highly inflationary environment and good product mix.” “In the second quarter, sales volume gradually increased, bringing the half-year volume decrease down to minus 2.9%. Due to the temporary limited availability of our worldwide brands in the first quarter and the lower-than-expected customer demand in the second quarter’s high inflationary environment, volume recovery was slower than anticipated.
Volume in the Americas area decreased 4.4% in the first half from 318,133 tonnes to 304,032 tonnes.
According to Mr. De Schryver, “volume in region Americas continued to decline in the second quarter against high competitors of the prior year and in an overall soft market environment.” “A more cautious environment affected food manufacturers, causing customers to prioritize destocking, especially in the first quarter, and to continue delaying orders, resulting in lower-than-expected volume in the second quarter.”
The entire Barry Callebaut company now anticipates flat to modest growth in volume for the fiscal year due to the overall delayed rise in volume.
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In April, Peter Feld, who was most recently the CEO of Jacobs Holding AG, was appointed CEO of Barry Callebaut. Peter F. Boone, who resigned for private reasons, was succeeded by him.
During the April 5 results call, Mr. Feld stated, “Barry Callebaut is the heart and the engine of the chocolate and the cocoa industry.” “That is an excellent and highly impactful mission statement for our company. In order to provide sustainable growth for all of our stakeholders, it provides us with direction and guidance. So it’s really personal to me to join Barry Callebaut. It is a fantastic honor, and I am very excited to work with all of our staff to shape the upcoming chapter.
“I’m excited to get to know everyone who is involved in making it happen over the coming weeks, from sourcing the cocoa to providing customer service.” I’m eager to find out more about our culture, what functions well, and what needs improvement.