Chocolate maker Barry Callebaut confirms guidance as sales accelerate
By Silke Koltrowitz
ZURICH (Reuters) - Swiss chocolate and cocoa maker Barry Callebaut <BARN.S> confirmed its mid-term guidance on Thursday after posting an acceleration in sales volumes for the nine months to May 31 as its outsourcing business expanded.
The company, which makes chocolate for big food groups, has been benefiting from a trend at food makers to outsource chocolate production and is also focusing on the fast-growing business with professional clients, like pastry chefs.
"As anticipated we accelerated our volume growth in the third quarter. All regions contributed to the good sales momentum, and our volume growth was again significantly above the global chocolate confectionery market," Barry Callebaut said in a statement.
Sales volumes grew 5% to 1,589,181 tonnes in the nine-month period and 10.6% in the third quarter. That was an acceleration from 2.4% growth in the first half particularly thanks to an improvement in its cocoa business and extra sales to British biscuit manufacturer Burton's Biscuit Company.
Sales revenue rose by 5.7% to 5.48 billion Swiss francs (£4.44 billion), the company said.
"An absolute blow out! Third-quarter volume growth was almost double that expected by consensus - you don't see much double-digit growth in volume in food these days," Kepler Cheuvreux analyst Jon Cox said.
The ramp-up of volumes for Burton's Biscuit, but also newly acquired Russian company Inforum, contributed to growth in Europe, Barry Callebaut said. Growth in its gourmet business stayed strong in both Europe and the Americas.
Vontobel analyst Jean-Philippe Bertschy said the acceleration in the third quarter was mainly driven by a strong recovery in the group's cocoa powder sales to third parties, the volumes from Inforum, as well as some new outsourcing contracts.
But he said the new volumes were dilutive and pointed to the demanding share price valuation, confirming his "hold" rating.
Shares, which have gained over 29% so far this year, were up 0.2% in early trading.
The Zurich-based company confirmed its mid-term guidance for 4-6% volume growth on average for the three-year period to the end of its fiscal year 2021/2022.
(Reporting by Silke Koltrowitz; Editing by Michael Shields and Edmund Blair)