Chocolate manufacturer Barry Callebaut has fallen short of expectations in the first half of its financial year and has been forced to revise its profit forecast downward. In the six months to the end of February, the comapny's sales volumes declined by just under 7 per cent to 1.01 million tonnes.
The group attributes the drop to broad market pressure driven by weaker consumer demand and "supply disruptions in North America". Revenue fell by more than 7 per cent to 6.75 billion Swiss francs. Adjusted operating profit (EBIT) dropped by almost 6 per cent to 310.9 million Swiss francs, significantly lower than analysts expected.
Where the company previously forecast limited growth in adjusted operating profit in local currency, it now expects a decline of around 15 per cent. "In the context of significantly lower cocoa bean prices, the group is taking short-term action to protect its market share," the company said.
Barry Callebaut argues that cheaper raw materials will help drive the chocolate market toward recovery. Cocoa bean prices fell 61 per cent in the first half of the financial year, following an unprecedented spike.
New CEO Hein Schumacher has also announced a new growth plan, to be presented in June. The group intends to "prioritise core markets and segments" and transition to "smaller, more commercially focused management teams".
Barry Callebaut is headquartered in Zurich and was formed in 1996 through the merger of the Belgian company Callebaut and the French company Cacao Barry. The group operates the world's largest chocolate factory in Wieze, East Flanders. In February, it announced a 375 million euro investment in its Flemish plants.
#FlandersNewsService | Barry Callebaut's distribution centre in Lokeren © BELGA PHOTO JAMES ARTHUR GEKIERE
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