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UPDATE 1-Barry Callebaut confirms targets as volume growth accelerates
July 13, 2017 / 6:12 AM / 6 months ago

UPDATE 1-Barry Callebaut confirms targets as volume growth accelerates

* Sales volume growth accelerates to 5.5 pct in Q3

* Cocoa sales volumes back to a year-ago level in Q3 (Adds details, background, and analyst comment)

ZURICH, July 13 (Reuters) - Barry Callebaut confirmed its mid-term targets after new outsourcing contracts and the streamlining of its cocoa portfolio helped third-quarter sales volume growth accelerate to 5.5 percent.

The world’s biggest chocolate and cocoa product maker retained its mid-term targets, valid until end-August 2018, of 4-6 percent volume growth and said it expects earnings before interest tax to grow at a faster rate.

Global chocolate demand is under pressure as many consumers opt for healthier snacks, but Barry Callebaut has so far bucked the trend by striking deals with food groups that outsource chocolate production and by tapping into the fast-growing “gourmet” business with chefs and pastry makers.

“We continue to see a healthy portfolio and expect the good momentum to remain. On this basis we confirm our mid-term guidance,” the company, which supplies food groups such as Nestle and Unilever , said in a statement on Thursday.

Sales volumes at the Zurich-based company rose 5.5 percent in the third quarter ended May 31. This was ahead of a Reuters poll that forecast an increase of 4.7 percent. Sales volumes fell 0.4 percent in the first quarter and then edged up 3.5 percent in the second quarter.

The company cited its gourmet business, outsourcing and emerging markets as growth drivers, and said sales volume in its cocoa business is back to the year-ago level after the group exited less-profitable contracts.

Sales revenue grew 3.7 percent to 5.19 billion Swiss francs ($5.4 billion) in the nine-month period that ended in May, also slightly better than the poll estimate of 5.14 billion Swiss francs.

Vontobel analyst Jean-Philippe Bertschy said the growth acceleration in the third quarter was good news, but the mid-term guidance implied “more than 6 percent (volume) growth in the coming five quarters, a rather challenging goal without any significant new outsourcing deals”.

$1 = 0.9634 Swiss francs Reporting by Silke Koltrowitz; Editing by Sherry Jacob-Phillips

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