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The amount of chocolate sold in absolute figures was almost 581,000 tonnes. Thus, the company exceeded the expectations of analysts who expected an average increase of 0.1 percent.
In addition, the company has challenged the declining chocolate market, where sales fell 2.7 percent in the similar period, according to information. However, in the same period last year, Barry Callebaut’s sales volume was also affected by the salmonella case at its largest factory in Wieze, Belgium.
Meanwhile, sales rose significantly more than volumes, rising by 6.2 percent to 2.24 billion francs, although the strong Swiss franc put pressure on sales. In fact, in local currency terms, BC could have grown by 14.1 percent. However, the main contribution to this growth was high prices; because BC passes on a large portion of its high raw material costs to its customers.
During the reporting period, cocoa beans alone were almost 70 percent more expensive on average than in the previous year. The decline in harvest in West Africa has increased fears of supply shortages.
The company said the development of the cocoa price “remains uncertain” as the latest data on the cocoa bean harvest in West Africa was weaker than expected. Barry Callebaut therefore expects “a higher demand for working capital across the industry.” This is the reason for the 600 million franc bond issued in January.
Sugar, as well as cocoa, were significantly more expensive in the first quarter, according to the announcement. On average, costs were 40 percent higher than in the same quarter last year. Dairy products also cost about a quarter less during the reporting period than in the previous year.
BC performed best in the Western European region, where the company sold nearly a third of total volume. Due to the incident at Wieze last year, sales volume there increased by almost 5 percent, although it was low in comparison.
Western European business was affected by reluctance among customers in the Fast Moving Consumer Goods (FMCG) sector. Because people are now more likely to save money when shopping in stores, these customers are also producing fewer items. This means that Barry Callebaut can supply less chocolate to cover snacks such as chocolate bars, for example. On the other hand, consumer demand for retailers’ own brands increased, which benefited BC.
But there was no increase in the second largest region, North America, where BC sells about a quarter of its total sales volume. As BC writes, sales volumes here fell 4 percent, although less than in the overall market. Food producers in the region were negatively affected by weak consumer demand. However, this was partially offset by increased new business. There were also signs of recovery in the Gourmet and Specialties sector.
Latin America and the Middle East and Africa, two smaller regions of Asia, also experienced volume declines, and BC also had fewer sales in its Global Cocoa cocoa trading business. BC, on the other hand, grew in Central and Eastern Europe.
In the statement, CEO Peter Feld is optimistic about the progress of the restructuring program for the full year. «We are making good progress in implementing BC Next Level. “We have implemented our new working model, the new management team has been appointed and most of the planned measures have already been initiated,” he was quoted as saying.
In the statement, Barry Callebaut confirms the objectives expressed in November. Accordingly, sales volumes at constant exchange rates are likely to be almost the same as in the previous year. For comparison: At that time it was 2.281 million tons. The operating result, adjusted for one-off restructuring measures as part of the “BC Next Level” program and recorded in local currencies, is also expected to remain stable (EBIT 2022/23: CHF 659.4 million). (SDA)
Source :Blick
I’m Tim David and I work as an author for 24 Instant News, covering the Market section. With a Bachelor’s Degree in Journalism, my mission is to provide accurate, timely and insightful news coverage that helps our readers stay informed about the latest trends in the market. My writing style is focused on making complex economic topics easy to understand for everyone.
