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Factory shutdown to hit Barry Callebaut after 9-month sales rise
Global Banking & Finance Review®
Company
By Silke Koltrowitz
ZURICH (Reuters) -Barry Callebaut expects a “notable financial impact” in its fourth quarter from the shutdown of its Wieze factory as the world’s biggest chocolate maker said on Wednesday that strong demand boosted sales in the nine months to May.
Sales volumes grew 7.9% to 1,751 thousand tonnes in the first nine months of Barry Callebaut’s fiscal year 2021/22, while sales revenue increased 13.5% to 6.076 billion Swiss francs ($6.27 billion), the Zurich-based group said in a statement, also confirming its mid-term targets.
The global chocolate confectionery market grew only 1.4% during that period, Barry Callebaut said, and it outpaced it thanks to strong demand across regions and a continued recovery in its gourmet business that caters to bakeries and chefs.
The company halted production at its Wieze site in Belgium – the world’s biggest chocolate factory – after detecting salmonella in June, but said cleaning was progressing well and it expected to restart production early next month and return to full capacity over the following weeks.
“Though the full financial impact of the incident is still being assessed, the Group expects it to be notable for the financial results in the fourth quarter 2021/22,” it said.
“I assume a 2% group impact on a full-year basis from the factory’s temporary closure, its biggest and around a fifth of group volume,” said Kepler Cheuvreux analyst Jon Cox, adding that the negative impact could reach 10% in the quarter.
Shares, down about 5% so far this year, opened 0.4% higher.
Barry Callebaut, which passes higher raw material costs on to customers like Nestle, confirmed it expects average volume growth of 5-7% per year and earnings before interest and tax above volume growth in local currencies for the period ending on Aug. 31 next year.
($1 = 0.9683 Swiss francs)
(Reporting by Silke Koltrowitz, editing by Kirsti Knolle, Michael Shields and Louise Heavens)
Barry Callebaut is the world's largest chocolate manufacturer, based in Zurich, Switzerland, known for producing high-quality chocolate and cocoa products for various clients, including major food companies.
Salmonella is a type of bacteria that can cause food poisoning, leading to symptoms like diarrhea, fever, and abdominal cramps. It can contaminate food products, prompting recalls and safety measures.
Sales revenue is the income generated from selling goods or services before any expenses are deducted. It is a key indicator of a company's financial performance.
A factory shutdown refers to the temporary closure of a manufacturing facility, often due to safety concerns, maintenance, or contamination issues, affecting production and financial performance.
Earnings before interest and tax (EBIT) is a measure of a firm's profitability that excludes interest and income tax expenses, providing insight into operational performance.
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