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Barry Callebaut Group: Good momentum of first six months of 2019/20 impacted by Covid-19

Barry Callebaut GKC Foods

ZURICH,Switzerland – The Barry Callebaut Group, the world’s leading manufacturer of high-quality chocolate and cocoa products, saw its good growth momentum of the first six months impacted by COVID-19 with volumes declining in the third quarter (ended May 31, 2020) by –14.3%. This led to an overall decline in the Group’s sales volume of –1.3% to 1,568,878 tonnes in the first nine months of fiscal year 2019/20.

Sales volume in the chocolate business declined by –14.1% in the third quarter, leading to a slight decline of –1.4% for the first nine months. The underlying global chocolate confectionery market in the first nine months was flat (0.0%2) according to Nielsen.

Global Cocoa volumes were down –14.6% in the third quarter and about flat for the nine-month period under review (–0.7%). Sales revenue in the first nine months amounted to CHF 5.2 billion, an increase of +0.4% in local currencies (–4.4% in CHF).

In June the Group saw a gradual sales volume recovery, as governments started to lift their COVID-19 measures. These early signs of recovery are visible both in Food Manufacturers and Gourmet & Specialties, albeit at a different pace.

“As anticipated in April, COVID-19 lockdowns across the globe impacted our sales volume in the third quarter, and herewith the good momentum of the first six months of fiscal year 2019/20,” said Antoine de Saint-Affrique, CEO of the Barry Callebaut Group.

“Throughout the COVID-19 pandemic, the precautionary measures we put in place early on allowed us to preserve business continuity and maintain a high service level for our customers worldwide, whilst protecting the health of our employees and the communities we operate in. We expect to emerge from the crisis with even closer relationships with our customers and suppliers, with fresh insights into innovative ways of doing business and a solid financial basis.”

COVID-19 update

Thanks to the precautionary measures and commitment of its employees, Barry Callebaut is able to keep its operations running and maintain a high level of service to its customers. In the face of the COVID-19 pandemic, the Group adopted precautionary measures early on to provide safe working environments for its employees and to maintain business continuity. In addition to the Group’s already strict hygiene standards, additional measures were put in place in factories, offices, laboratories and distribution centers. These measures include new hygiene protocols, social distancing on the work floor, remote working and limitation of travel. The Group also supported its employees in adjusting to the new normal.
Outlook – Updated mid-term guidance reflects confidence

Looking ahead, CEO Antoine de Saint-Affrique, CEO of the Barry Callebaut Group, said:

“We are confident we should rapidly regain momentum as markets are gradually reopening. This confidence is bolstered by the quality of our customer relationships, the breadth of our business model, as well as our strong innovation pipeline and balance sheet. The COVID-19 pandemic is a major unforeseen event, which will have a negative impact on fiscal year 2019/20.

This is why we update our mid-term guidance, excluding fiscal year 2019/20 and introducing increased metrics of, on average for the 3-year period 2020/21 to 2022/23, +5-7% volume growth and EBIT above volume growth in local currencies, barring any major unforeseeable events. The updated mid-term guidance starts in September 2020.”