Barry Callebaut 1Q Sales Near-Flat, Confirms Targets
21.01.09, 09:10 Uhr
ZURICH -(Dow Jones)- Barry Callebaut AG (BARN.EB), the world's largest producer of bulk chocolate, Wednesday reported a worse-than-expected rise in first-quarter sales but said it's on track to reach its medium-term financial targets.
The Zurich-based company said sales in the September-to-November period were CHF1.43 billion Swiss francs ($1.25 billion), up barely 1% from the CHF1.42 billion it posted a year ago. The figure was below analysts' expectations of CHF1.53 billion.
The top line was depressed by the rise of the Swiss franc against the euro, the dollar and the pound, Barry Callebaut said, adding that growth in local currencies was 7.2%.
Chief Executive Officer Patrick De Maeseneire said he remains optimistic despite the financial crisis, adding the company is set to reach its medium-term targets - annual sales growth of 9% to 11%, operating profit growth of 11% to 14%, and net profit growth of 13% to 16%.
The report follows weak sales figures of Swiss premium chocolate maker Chocoladefabriken Lindt & Spruengli AG (LISN.EB), which Tuesday published a slight drop in 2008 sales to CHF2.94 billion.
Barry Callebaut, although somewhat less exposed to the retail market than Lindt & Spruengli, has been hit by the so-called destocking by retailers, said analyst Jon Cox of Kepler.
"Sellers of branded goods have told their suppliers to cut deliveries and Barry hasn't been able to escape that," Cox said, adding that the first-quarter figures were disappointing.
"I'm not sure they can do their financial targets this year, but the outsourcing story is intact and prospects are good for the longer term," he said. Cox reaffirmed a buy rating and a CHF800 price target.
Barry Callebaut said November was very weak but added there was a clear pickup in December.
On the Swiss bourse, the shares were indicated down CHF6 in pre-bourse trade. They closed at CHF642 Tuesday.
In the past few quarters, Barry Callebaut has landed large outsourcing orders with industry giants such as Hershey Co. (HSY), Nestle S.A. (NESN.VX) and Cadbury PLC (CBY).
Last week, it opened a chocolate factory in Monterrey, Mexico, with an annual production capacity of 100,000 tons, which it says is the third-largest plant worldwide.
The company will report half-year results Apr. 2.
For the fiscal year ended Aug. 31, Barry reported a net profit of CHF205.5 million on sales of CHF4.82 billion.
The top line was depressed by the rise of the Swiss franc against the euro, the dollar and the pound, Barry Callebaut said, adding that growth in local currencies was 7.2%.
Chief Executive Officer Patrick De Maeseneire said he remains optimistic despite the financial crisis, adding the company is set to reach its medium-term targets - annual sales growth of 9% to 11%, operating profit growth of 11% to 14%, and net profit growth of 13% to 16%.
The report follows weak sales figures of Swiss premium chocolate maker Chocoladefabriken Lindt & Spruengli AG (LISN.EB), which Tuesday published a slight drop in 2008 sales to CHF2.94 billion.
Barry Callebaut, although somewhat less exposed to the retail market than Lindt & Spruengli, has been hit by the so-called destocking by retailers, said analyst Jon Cox of Kepler.
"Sellers of branded goods have told their suppliers to cut deliveries and Barry hasn't been able to escape that," Cox said, adding that the first-quarter figures were disappointing.
"I'm not sure they can do their financial targets this year, but the outsourcing story is intact and prospects are good for the longer term," he said. Cox reaffirmed a buy rating and a CHF800 price target.
Barry Callebaut said November was very weak but added there was a clear pickup in December.
On the Swiss bourse, the shares were indicated down CHF6 in pre-bourse trade. They closed at CHF642 Tuesday.
In the past few quarters, Barry Callebaut has landed large outsourcing orders with industry giants such as Hershey Co. (HSY), Nestle S.A. (NESN.VX) and Cadbury PLC (CBY).
Last week, it opened a chocolate factory in Monterrey, Mexico, with an annual production capacity of 100,000 tons, which it says is the third-largest plant worldwide.
The company will report half-year results Apr. 2.
For the fiscal year ended Aug. 31, Barry reported a net profit of CHF205.5 million on sales of CHF4.82 billion.
Company Web site: www.barry-callebaut.com
DJG/voi
