In the midst of economic uncertainties and supply chain challenges, Barry Callebaut Grouphas reported a resilient performance for the fiscal year 2023/24. Despite facing headwinds from record-high cocoa bean prices and a volatile market environment, the company managed to achieve significant growth in sales revenue and volume, showcasing its robust business model and strategic initiatives, Kennedy’s Confection reports.
According to the latest report released by the Barry Callebaut Group, sales volume for the first three months of the fiscal year 2023/24 saw a modest increase of +0.4%, reaching 580,876 tonnes. This growth, although slight, outpaced the overall declining trend observed in the chocolate confectionery market, which experienced a decrease of -2.7% according to Nielsen data.
The company’s diversified business model played a crucial role in mitigating the impact of market challenges. Despite facing suppressed global volume performance due to weak growth in Fast-Moving Consumer Goods (FMCG) companies, Barry Callebaut managed to capture the consumer shift towards private label products. Gourmet and Specialties volume saw notable growth, indicating a shift in consumer preferences towards premium chocolate offerings.
Barry Callebaut’s sales revenue surged to CHF 2.2 billion, marking a remarkable increase of +14.1% in local currencies (+6.2% in CHF). This growth was primarily driven by the company’s cost-plus pricing model, which adjusts for higher costs, and its ability to navigate the inflationary environment effectively.
The company’s strategic investment program, BC Next Level, launched in September 2023, aims to enhance customer proximity, simplify business processes, and drive sustainable profitable growth. With a majority of the measures already initiated, including a revised leadership structure and SKU rationalisation, Barry Callebaut is well-positioned to capitalise on future opportunities.
Despite uncertainties in the cocoa market, Barry Callebaut has taken proactive measures to strengthen its financial position. The successful launch of a CHF 600 million bond and refinancing initiatives demonstrate the company’s commitment to managing working capital requirements and ensuring financial resilience.
Regionally, Barry Callebaut reported varying performance across different markets. While Western Europe and Central & Eastern Europe witnessed volume growth, North America experienced a decline. Latin America and Asia, Middle East, and Africa also saw mixed results, reflecting the complex dynamics of regional markets.
Looking ahead, Barry Callebaut reaffirmed its guidance for flat volume and flat EBIT for the fiscal year 2023/24, including modest benefits from the BC Next Level program. The company remains focused on delivering the best chocolate solutions and services to its customers while navigating the evolving market landscape.
As the chocolate industry continues to face challenges, Barry Callebaut’s resilience and strategic initiatives position it well for sustainable growth in the future. Investors and stakeholders are eagerly awaiting further updates on the company’s progress in the coming months.
Editorial contact:
Editor: Kiran Grewal kgrewal@kennedys.co.uk
