* Growth beats global chocolate market as Europe holds up
* 2011/12 sales volumes up 8.7 pct vs poll for 7.8 pct
* Results helped by outsourcing agreements
* Shares jump 4 pct
* Ivory Coast crop seen slightly down; cocoa prices seen
By Emma Thomasson
ZURICH, Nov 7 Barry Callebaut AG
expects sluggish growth of the global chocolate market to pick
up slightly next year as the world's largest maker of chocolate
products reported better-than-expected sales for its 2011/12
The group, which makes chocolate for groups such as Nestle
SA and The Hershey Co, said sales volume
growth rose to 8.7 percent in the 12 months to Aug. 31, compared
with average analyst forecasts for an increase of 7.8 percent.
"We believe the big markets, western Europe and north
America, will grow but, with today's view, it will not be a big
push," CEO Juergen Steinemann told Reuters, adding he saw global
growth of more than 1 percent, but "probably not 2-3 percent".
"Barry Callebaut's growth rate is impressive given the low
market growth of the overall chocolate industry," said Sarasin
analyst Patrick Hasenboehler.
Shares in the group jumped 4 percent to 920 Swiss francs
versus a 0.4 percent rise for the European food and beverage
Market researcher Mintel expects the value of the global
chocolate market to be little changed at $84.5 billion in 2012,
but to fall by around 5 percent in western Europe due to the
economic crisis even though the treat was once thought of as
But Barry Callebaut, which provides the food industry with
cocoa and chocolate products, coatings and cocoa powders, said
it had managed 6.9 percent sales volume growth in Europe due to
new outsourcing deals and strong demand in eastern Europe.
"NO LIMIT TO OUTSOURCING"
Barry Callebaut has signed a string of outsourcing deals
this year, including supplying the world's third largest
consumer good's group, Unilever, with 70 percent of its
global cocoa and chocolate needs.
However, ramp-up costs associated with those deals as well
as investments in factory expansions and "sustainable cocoa"
programmes weighed on net profit, which fell 8.5 percent to 241
million Swiss francs ($255.38 million), compared with average
analysts forecasts for 239 million francs.
Steinemann said he saw the trend towards more outsourcing
goods continuing: "There is still roughly 3 million tonnes out
of the 6 million tonnes consumed which is produced in-house. So
I don't see a limit to outsourcing."
Barry Callebaut renewed its financial targets of 6-8 percent
average volume growth and earnings before interest and tax
(EBIT) at least in line with that through to 2014/15.
Steinemann said he expected the cocoa harvest from top
grower Ivory Coast to be slightly smaller than last year's
record crop, with the global crop roughly meeting demand.
"We will not see a surplus but not a significant deficit,"
he said, adding he expected flat global cocoa prices.
"On the bearish side, there is rather a weak cocoa demand,
the industry is very well covered, the funds are long so that
shouldn't give too much upward pressure," he said.
"On the bullish side, there will likely be a slight deficit
this year and the prices of cocoa came down quite a bit. It is
still undervalued compared to other commodities. So there are
reasons why it should go upwards as well as downwards."