BARRY CALLEBAUT AG Barry Callebaut | Annual Report 2022/23 | Page 2 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Table of Contents
-
This is Barry Callebaut
4 Key figures 2022/23
5 Fiscal year 2022/23 in brief
6 Letter to Shareholders
- Overview
- Business at a Glance
- 5-YearOverview
- Risk Overview
- Business Highlights
- Financial Review
24 Business Review
- Sustainability
- Forever Chocolate
- Prospering Farmers
- Human Rights
- Thriving Nature
- Sustainable Ingredients
- Our People
- Employee Development
- Chairman's Awards 2023
- Financial Reports
- Consolidated Financial Statements
- Notes to the Consolidated Financial Statements
- Financial Statements of Barry Callebaut AG
- Governance
- Corporate Governance Report
- Remuneration Report
- Alternative Performance Measures
- Contact & Financial Calendar
Barry Callebaut | Annual Report 2022/23 | Page 3 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
This is Barry Callebaut
Growing the world of chocolate and cocoa
Sales volume
2.3 million
In tonnes
EBIT
659.4
In CHF million
50.1 million
premiums generated from Cocoa Horizons products (in CHF)
26
CHOCOLATE
ACADEMYTM
Centers
66
factories worldwide
More than
175 years
Volume growth
-1.1%
Sales revenue
8.5 billion
In CHF
1 out of 2
products sold containing 100% sustainable cocoa or chocolate
Around
190,000
chocolate professionals trained online and offline in 2022/23
More than
13,000
employees
Doing business in
138
of chocolate heritage | countries |
Barry Callebaut | Annual Report 2022/23 | Page 4 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Key figures 2022/23
Sales volume | EBIT | Net profit | Free cash flow | Proposed dividend | ||||
2.3 | 659.4 | 443.1 | 113.0 | 29.00 | ||||
million tonnes | CHF million | CHF million | CHF million | CHF per share | ||||
-1.1% | +12.2%1 in local currencies | +9.6%1 in local currencies | 36% payout ratio |
Sales volume
In tonnes
2,400,000 | ||||
2,000,000 | ||||
1,600,000 | ||||
1,200,000 | ||||
800,000 | ||||
400,000 | ||||
0 | ||||
2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
EBIT reported
In CHF million
700 | ||||
600 | ||||
500 | ||||
400 | ||||
300 | ||||
200 | ||||
100 | ||||
0 | ||||
2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
EBIT recurring1
Sales volume by Region
In tonnes
21%
7% | 45% |
27%
EMEA | 1,036,227 |
Americas | 619,747 |
Asia Pacific | 157,074 |
Global Cocoa | 467,877 |
Sales revenue
In CHF million
9,000 | ||||
7,500 | ||||
6,000 | ||||
4,500 | ||||
3,000 | ||||
1,500 | ||||
0 | ||||
2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
Net profit reported
In CHF million
500 | ||||
400 | ||||
300 | ||||
200 | ||||
100 | ||||
0 | ||||
2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 |
Net profit recurring1
Sales volume by Product Group
In tonnes
21%
12%
67% | |
Food Manufacturers | 1,530,076 |
Gourmet & Specialties | 282,972 |
Cocoa Products | 467,877 |
- Compared to prior-year Operating profit (EBIT) recurring and Net profit recurring. Please refer to page 189 for the detailed recurring results reconciliation.
Barry Callebaut | Annual Report 2022/23 | Page 5 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Fiscal year 2022/23 in brief
- Growth in Q4 of +3.9%, bringing full year sales volume to 2.3 million tonnes (-1.1%)
- Sales revenue of CHF 8.5 billion, up +9.7% in local currencies (+4.7% in CHF)
- Operating profit (EBIT) of CHF 659.4 million, up +12.2%2 in local currencies (+5.6%2 in CHF)
- Net profit of CHF 443.1 million, up +9.6%2 in local currencies (+3.4%2 in CHF)
- Adjusted free cash flow3 of CHF 251.8 million impacted by raw material prices
- Proposed dividend of CHF 29.00 per share, a payout ratio of 36%
EMEA | Americas | Asia Pacific | Global Cocoa | |||||
vs. prior year | -0.4% | -4.6% | -2.0% | +2.4% | ||||
Volume growth | ||||||||
vs. prior year in local currencies | +24.6% | +0.1% | -16.9% | +22.0% | ||||
EBIT growth2 |
-
Compared to prior-year Operating profit (EBIT) recurring and Net profit recurring. Please refer to page 189 for the detailed recurring results reconciliation.
3 Free cash flow adjusted for the cash flow impact of cocoa bean inventories regarded by the Group as readily marketable inventories (RMI).
Barry Callebaut | Annual Report 2022/23 | Page 6 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Letter to Shareholders
Setting the course for sustainable profitable growth
Dear Shareholders,
We are looking back on a year when we embarked on a journey to prepare ourselves for the next decade of sustainable profitable growth and long-term shareholder value creation. First of all, allow us to thank our over 13,000 colleagues worldwide for their ongoing strong dedication and commitment throughout the past year.
In fiscal year 2022/23, our total sales volumes of 2,280,925 tonnes were slightly below the previous year's level (-1.1%), as the global chocolate confectionery market declined by -1.0%4. Sales revenue amounted to CHF 8,470.5 million, up +9.7% in local currencies. Our Operating profit (EBIT) increased by +12.2% in local currencies (compared to prior-year EBIT recurring5). Net profit amounted to CHF 443.1 million, an increase of +9.6% in local currencies compared to the prior-year recurring5 figure. Our adjusted Free cash flow6 of CHF
251.8 million, compared to CHF 358.5 million in the prior fiscal year, was heavily impacted by high raw material prices, in particular for cocoa.
At the Annual General Meeting of Shareholders on December 6, 2023, the Board of Directors will propose an increased dividend of CHF 29.00 per share, corresponding to a payout ratio of 36% of the reported Net profit.
We achieved our results for the fiscal year 2022/23 against the backdrop of several internal and external factors, such as the inflationary pressures that have dampened consumer appetite in some of our key markets. Furthermore, we saw a significant increase in
raw material prices, including the price of cocoa beans, which was on average +23.5% higher than in 2021/22. The price of raw sugar also rose by an average of +16.1% worldwide and +46.3% in Europe in fiscal year 2022/23.
Taking Barry Callebaut to the Next Level
Our mission is to be the heart and the engine for the global cocoa and chocolate industry. We have delivered robust growth for nearly 25 years. Given the current market situation and evolving customer demands for more sustainable and innovative products, it is now time to bring the Barry Callebaut Group to the next level by strategically investing in our future. Under the leadership of Peter Feld, who took over as CEO from Peter Boone in April, we announced in September 2023 BC Next Level, a CHF 500 million strategic investment program through 2025. With this, we will move decision-making closer to our markets and customers while fostering simplicity and digitalization to advance our well-recognized innovation and sustainability approach to deliver additional value for all our stakeholders.
At the heart of BC Next Level is a new operating model that increases the number of Regions from three to five and creates a true end-to-end Customer Supply & Development organization. In addition, the Executive Committee has been streamlined from nine to six members, including the appointment of some new key leaders. The rapid implementation of our BC Next Level program will lead to unlocking the full potential of Barry Callebaut for the decade to come and position us for sustainable profitable growth.
- Source: Nielsen volume growth excluding e-commerce - 26 countries, September 2022 to August 2023, data subject to adjustment to match Barry Callebaut's reporting period. Nielsen data only partially reflects the out-of-home and impulse consumption.
- Refer to page 189 for the detailed recurring results reconciliation.
- Free cash flow adjusted for the cash flow impact of cocoa bean inventories regarded by the Group as readily marketable inventories (RMI).
Barry Callebaut | Annual Report 2022/23 | Page 7 | ||||||
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Letter to Shareholders
Chairman of the Board Patrick De Maeseneire and CEO Peter Feld.
Patrick De Maeseneire
Chairman of the Board
"We have embarked on a journey to secure the long-term success of the company that will benefit all stakeholders. With BC Next Level, Barry Callebaut is set to become even more customer-focused, agile, and efficient."
Peter Feld
CEO
"Our purpose is to create the world's best chocolate solutions for our customers - now and in the future. As the leader in the attractive, growing chocolate ingredients market and our strength in sustainability and innovation, we are ideally positioned to outgrow the market."
Barry Callebaut | Annual Report 2022/23 | Page 8 | ||||||
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Letter to Shareholders
BC Next Level: Unlocking growth and creating a step-change in profitability and cash generation
In total, the investment program BC Next Level will position Barry Callebaut for sustainable profitable growth: the measures will move the company closer to customers and markets and digitalize the front and back ends. By optimizing its portfolio, go-to-market strategy, supply chain, and manufacturing, Barry Callebaut aspires to deliver the most sustainable and high-value solutions to customers. The program will bring Barry Callebaut to a higher profit margin and cash generation level and subsequently allow for a more attractive financial profile in the medium-term. The BC Next Level program will unlock CHF 250 million of cost savings, of which 75% are expected to flow- through to bottom line and will deliver a one-timestep-function improvement in profit margin supporting the Group in building towards a 10% EBIT margin ambition.
We look to the future with great confidence and would like to thank all our employees again for their passion and commitment. We would also like to thank our customers for their partnership over the past year. Finally, we thank you, our valued shareholders, for your continued trust in us.
Patrick De Maeseneire | Peter Feld |
Chairman of the Board | Chief Executive Officer |
Long-term profitability and growth plan to deliver value for all stakeholders
Barry Callebaut expects a 24-month transition period as it undertakes the actions necessary to create the profitable growth platform that delivers long-term value.
For the fiscal year 2023/24, Barry Callebaut sees flat volume, reflecting positive underlying growth, partially offset by BC Next Level actions, such as product rationalization and distributor optimization.
In addition, Barry Callebaut guides towards flat EBIT on a recurring basis (in local currencies and without BC Next Level one-time costs), reflecting first modest impact of permanent BC Next Level benefits, offset by product rationalization, distributor optimization and pricing actions taken to increase the value delivered to Gourmet customers.
In the fiscal year 2024/25, the Group expects to grow volume and EBIT modestly on an underlying basis (without BC Next Level one-time costs and permanent benefits), delivering a stronger EBIT growth including permanent benefits.
The company will deliver its long-term growth objective from the fiscal year 2025/26 onwards with Low Single-digit Plus to Mid Single-digit volume growth, and Mid Single-digit Plus to High Single-digit EBIT growth7.
During the transition period, our dividend per share will not be lower than prior year.
- FY 2025/26 still includes BC Next Level one-time costs and permanent benefits
Barry Callebaut | Annual Report 2022/23 | Page 9 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Overview
- Business at a Glance
- 5-YearOverview
- Risk Overview
Barry Callebaut | Annual Report 2022/23 | Page 10 |
Business Highlights | Sustainability | Our People | Financial Reports | Governance |
Business at a Glance
Our vision
We are the heart and engine for the chocolate and cocoa industry.
Our values
Everything we do is rooted in our five core values: customer focus, passion, entrepreneurship, team spirit and integrity.
We believe in doing well to do good. This is also reflected by the fact that about 30% of our dividends support the Jacobs Foundation, which is dedicated to education and the future of young people.
Business model
We are the world's leading manufacturer of chocolate and cocoa products, mastering every step in the value chain from the sourcing of raw materials to the production of the finest chocolates. We are able to provide our customers with value-adding products and services adapted to specific market needs, ahead of trends and at a competitive price. We serve the entire food industry - from global and local food manufacturers to artisanal and professional users of chocolate, such as chocolatiers, pastry chefs, bakers, hotels, restaurants or caterers.
We are a business-to-business company. In order to accommodate price fluctuations in raw materials, we use a cost-plus pricing model that passes on raw material prices directly to our customers for a large part of our business.
Our input factors are talented people, profound chocolate and cocoa know-how, as well as unparalleled raw materials sourcing capabilities. Our output factors are high-quality chocolate and cocoa products complemented by value-adding services.
Competitive advantages
We are a fully vertically integrated business and have a unique global footprint with 66 factories and 26 CHOCOLATE ACADEMYTM Centers around the globe. With more than 175 years of chocolate heritage, our Group has an unparalleled blend of expertise in cocoa and chocolate, from the sourcing of the beans to insights into future consumer trends which we gather through our chefs network. Through our leadership in innovation, we help our customers grow. Combined with our cost leadership, this makes us the preferred outsourcing partner of the food industry. We have long-term partnership agreements with leading global and local food companies. We are present on the ground in all key origin countries and have a longstanding commitment to sustainability.
An overview of Barry Callebaut's value chain
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Barry Callebaut AG published this content on 01 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 November 2023 13:34:50 UTC.
