* More chocolate outsourcing as confectionery demand surges
* Net profit falls to 229 mln Sfr, beats poll
* Sales volumes up 11.4 pct, 8.7 pct without Petra
* Confirms midterm guidance of 6-8 pct volume growth
By Silke Koltrowitz
ZURICH, Nov 7 Barry Callebaut, the
world's No. 1 chocolate and cocoa maker, beat analysts'
forecasts on Thursday as big food groups, such as Nestle and
Mondelez, outsource more chocolate making and as confectionery
sales rise worldwide.
Sales volumes rose 11.4 percent in the full year to August,
compared with a Reuters poll forecast for 10.3 percent, and net
profit fell 5.4 percent to 229 million Swiss francs ($251.36
million), beating a forecast of 213 million.
Profits were squeezed by costs related to buying Petra
Foods' loss-making cocoa business. Without Petra,
volumes grew 8.7 percent. Sales revenue rose slightly to 4.88
billion Swiss francs, roughly in line with expectations.
It beat 2.1 percent growth in the European chocolate
confectionery market with 8.1 percent sales volumes growth and
also generated double-digit growth in the shrinking American
market, notably thanks to a deal with Hershey.
Major customer Nestle said confectionery sales
rose 6.1 percent in the first nine months, and Mondelez
, also a customer, reported double-digit sales growth
for its Milka and Cadbury Dairy Milk brands on Wednesday.
"We will continue to focus on pushing our topline while also
paying attention to a further margin improvement," chief
executive Juergen Steinemann told Reuters on Thursday. He
confirmed the group's midterm 6-8 percent volume growth target.
Steinemann said he was happy with how the Petra integration
was progressing and was confident of achieving forecast
synergies of 30-35 million Swiss francs by 2015/16.
Vontobel analyst Jean-Philippe Bertschy said in a note that
results were "reassuring". "Underlying results were in line with
expectations, and Petra's negative impact slightly lower than
anticipated," he said, noting that the Petra integration would
Chief Finance Officer Victor Balli said the dispute over the
Petra sale price was not linked to the performance of the
business but rather to asset valuations. "For us, there's only
upside here. We've already paid and booked the acquisition."
Barry Callebaut bought Petra Foods' cocoa business for $860
million this year, $90 million less than the initially agreed
price. It is trying to get a further $98 million reduction,
which Petra Foods refuses. "We hope to solve this quickly,"
Balli said, without giving a time frame.
He said he expected Petra's operating profit to be 30
million francs in 2013/14.
Steinemann and Balli said capacity problems in Asia-Pacific,
where operating profit fell by 9 percent, would soon be solved
as a new factory in Japan was now operational, and that earnings
in the region should improve in this fiscal year.
Price rises for cocoa beans and lower prices for cocoa
powder weighed but the situation should improve, Balli said.
"I think cocoa powder prices have bottomed out because stock
levels have been reduced and processing capacities have not been
increased again," Balli said.
He expects cocoa bean prices to stay at current levels,
while Steinemann sees powder prices rising slightly and cocoa
butter prices starting to fall.
Liffe cocoa prices have risen around 11 percent in
the past three months, hitting a two-year high in October of
1,774 pounds, as expectations for a second consecutive global
deficit supported the market. Balli said he expected the deficit
to be "relatively small".
The group said it would propose a dividend of 14.50 Swiss
francs per share, below the 15.70 francs forecast in the poll.
Shares, up 8 percent this year, rose 2.9 percent to 972
francs by 0957 GMT, outperforming a flat sector index.