During the first half of fiscal year 2015/2016 ended February 29, 2016, the Barry Callebaut Group, a manufacturer of chocolate and cocoa products, increased its sales volume by 4.5% to 933,327 tonnes.
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This volume growth was driven by the chocolate business across all Regions. All key growth drivers contributed positively. In the Global Cocoa business, sales to third parties were intentionally reduced and less profitable contracts are being progressively phased out.
Sales revenue grew by 11.7% in local currencies (5.6% in CHF) to CHF 3,424.3 million, driven by higher cocoa bean prices compared to last year1 and increased sales of higher value products.
Gross profit increased by 4.7% in local currencies (-1.9% in CHF) to CHF 437.9 million, largely in line with volume growth as the negative impact from the combined cocoa ratio was compensated by a good development on margins and a better product mix in the Group’s chocolate business due to the strategic focus on this area.
Compared to the strong comparison base from last year, operating profit (EBIT) was almost flat at CHF 200.7 million (-0.3% in local currencies and -8.4% in CHF, due to a significant negative currency translation effect of CHF -17.9 million resulting mainly from the strength of the Swiss franc against the Euro and some emerging market currencies).
As anticipated some restructuring costs related to the Cocoa Leadership project and additional investments in Sales and Marketing also had a negative effect.
Net profit was down -12.5% in local currencies (-18.5% in CHF) to CHF 107.9 million, affected by higher financial expenses, income taxes, and foreign exchange effects.
Net working capital decreased by 11.8% from CHF 1,566.6 million in the prior year period to CHF 1,382.3 million despite the Group’s growth. This is mainly the result of the Group’s working capital initiative leading to significantly lower volume in inventories and an increase in trade payables and other current liabilities.
Net debt amounted to CHF 1,538.2 million, down by 14.1% from CHF 1,790.6 million in the prior year period. The decrease was mainly driven by lower financing needs related to working capital and capital expenditure.
As a result, free cash flow significantly improved to CHF 220.4 million whereas the prior year period resulted in an outflow of CHF -142.8 million. ■