Barry Callebaut sticks to sales growth target after solid full year
By Silke Koltrowitz
ZURICH (Reuters) - Barry Callebaut <BARN.S>, which makes chocolate and cocoa products for firms like Nestle <NESN.S> and Unilever <ULVR.L>, stuck to a sales volume growth target of 4-6% over the next three years, counting on new outsourcing deals to fuel growth.
Although global chocolate confectionery consumption is only growing slowly, Barry Callebaut said its focus on outsourcing contracts and emerging markets allow it to outperform the market. A weakness in its business with chefs and artisans would quickly be fixed, it added.
"Our business is extremely predictable in the medium term, but there is quite a bit of variation from quarter to quarter," Chief Executive Antoine de Saint-Affrique told reporters on Wednesday after volume growth slowed in the final quarter of the group's fiscal year from the previous quarter.
This was partly due to scant development in its gourmet and specialities business with pastry chefs and restaurants - normally one of its growth drivers - but De Saint-Affrique said this would be fixed in the second half of the current fiscal year.
"We didn't renew two contracts that were not on the right level of profitability and were too slow in renewing and broadening our customer base," he said, adding he was confident of returning the unit to mid- to high-single digit growth.
Barry Callebaut shares, which have risen 36% so far this year, were down 3.6% at 1033 GMT partly due to the slowdown in the final quarter.
Vontobel analyst Jean-Philippe Bertschy said the share price had also risen so much that it may be hard to sustain the current valuation even with the upbeat outlook.
De Saint-Affrique said the Zurich-based company, more than 50% in the hands of the billionaire Jacobs family, was also working on a pipeline of outsourcing opportunities and could do bolt-on acquisitions to boost business.
Overall sales volumes grew 5.1% to 2.14 million tonnes in the 12 months to Aug. 31., while net profit rose 6.9% in local currencies to 368.7 million Swiss francs (£288.1 million), the maker of berry-flavoured "ruby" chocolate said in a statement, proposing an 8% higher dividend of 26 francs per share.
Kepler Cheuvreux analyst Jon Cox said this was "a solid set of figures with excellent free cash flow and a dividend ahead of expectations".
(Reporting by Silke Koltrowitz; Editing by Michael Shields, Alexander Smith and Emelia Sithole-Matarise)