Letter to Shareholders
Good growth momentum continues
Our proven long-term strategy and its consistent execution delivered another set of strong results, creating value for our shareholders and other stakeholders. The successful completion of our 4-year mid-term guidance gave us the confidence to renew it for the next 3-year period.
Fiscal year 2018/19 in brief
- Sales volume up +5.1%, well above the market growth1
Sales revenue of CHF 7.3 billion, up +7.8% in local currencies (+5.2% in CHF)
Operating profit (EBIT) up +11.9% in local currencies (+8.5% in CHF)
Net profit2 up +14.2% in local currencies (+10.4% in CHF)
Free cash flow of CHF 290 million
Mid-term guidance 2015/16 – 2018/19 delivered3, on average +4.5% volume growth and +13.9% EBIT growth in local currencies
Board members Jakob Baer and Juergen Steinemann will not stand for reelection
Proposed payout to shareholders of CHF 26.00 per share, up +8.3%
1. Source: Nielsen, +1.8% in volume, August 2018 to August 2019 – 25 countries, excluding e-commerce channels.
2. Net profit excluding one-off costs for early bond repayment of CHF 33m, partly offset by the tax effect of CHF 7m.
3. On average for the 4-year period 2015/16 to 2018/19: 4-6% volume growth and EBIT above volume growth in local currencies, barring any major unforeseen events.
Strong volume growth and profitability
Region EMEA (Europe, Middle East, Africa) delivered strong volume growth well above the market and a good EBIT growth.
Healthy growth and strong profitability
Region Americas maintained a healthy growth rate, well above the growth of the chocolate confectionery market. The improved product mix was reflected in a strong EBIT.
Region Asia Pacific
Strong growth momentum
Region Asia Pacific accelerated in the second half of the fiscal year, achieving double-digit volume growth and a strong profitability.
Further improved profitability
Healthy volume growth and further improved profitability, benefiting from disciplined execution.
Our Success Stories
Growing with our customers
We continuously invest in our capacities and capabilities. This year we announced the construction of a new production site in Baramati, India, as well as in Novi Sad, Serbia. In Beijing, we opened a new office and our second CHOCOLATE ACADEMY™ Center in China. In Abidjan, Côte d’Ivoire, we inaugurated our new cocoa processing unit. An additional supply agreement with Garudafood, a leading food company in Indonesia, is further proof of our successful partnership.
Unleashing the full power of the cacaofruit
Innovation is in our company’s DNA. This year, we launched a next-generation food & drink category. With ‘Cacaofruit Experience’, we unleash the full power of the cacaofruit, as these products make use of the entire fruit. The new product range underpins the Group’s shift towards a specialty ingredients maker. Under its brand CaPao, Mondelez is first to pilot cacaofruit snack products. ‘Wholefruit chocolate’, a new type of chocolate, is hitting the chef and artisan market in May 2020.
Continuously strengthening our financial profile
Cost Leadership allows us to outpace our competitors, and this includes raising debt in the financial markets at attractive average interest rates. This year, we were the first Swiss industrial company to issue a Schuldscheindarlehen which not only improves our debt and liquidity structure. It also includes tranches meeting sustainability criteria: At least two-thirds of the proceeds will be used to finance sustainability projects to support cocoa farmers and cocoa farmer communities.
Building the cocoa farms of the future
Why does climate change matter to us? Because if there is no forest there is no rain. And if there is no rain, there is no cocoa. If productivity is low, cocoa farmers will encroach into the forest. This is why we attended the United Nations Climate Action Summit, joined the “One Planet Business for Biodiversity” and the “Just Rural Transformation” initiative. With our cocoa farm database Katchilé, we meanwhile have also unprecedented datasets to build the cocoa farming model of the future.
A new way of learning
To enable all our employees to directly contribute to our Forever Chocolate commitments, we launched Seeds for Change in December 2018. Seeds for change is also a new and encouraging way of learning: Every employee can share ideas and experiences and come together for a common goal. Employees are excited to see that their contributions and ideas have a direct impact.
Forever Chocolate progress
Creating impact through the power of data, technology, and scale
Sustainability is at the heart of our business. This is why in 2016 we launched Forever Chocolate, our plan to make sustainable chocolate the norm by 2025. Every year we report on the progress we are making against the Forever Chocolate targets.
Our third, most recent, progress report shows that we are creating an impact on the ground and leading change in the cocoa and chocolate value chain. We are focusing on big innovative projects which we know will create the tipping point to further a sustainable chocolate supply chain. For this, we are using a combination of big data and technology as the backbone to scale our efforts.
We are very proud that our efforts were acknowledged in July 2019, when Sustainalytics, one of the leading companies assessing companies’ sustainability efforts, ranked Forever Chocolate the #1 sustainability strategy in the packaged foods industry out of 178 companies.
Forever Chocolate is a movement. We need the expertise from academia and NGOs, the resources from our customers and partners, and an enabling policy environment from governments. We welcome all feedback and offers for support.
Barry Callebaut Chairman's Award Winners 2019https://www.barry-callebaut.com/sites/default/files/styles/paragraph_image_gallery_full/public/2019-11/Barry-Callebaut-Chairmans-Award-2019-group%20picture-well-behaved.jpg?itok=1xKk8Obx
Barry Callebaut Chairman's Award Winners 2019https://www.barry-callebaut.com/sites/default/files/styles/paragraph_image_gallery_full/public/2019-11/Chairmans%20Award%202019%20%2811%29.JPG?itok=c6aLN0wo
Barry Callebaut Value Award Winners 2019https://www.barry-callebaut.com/sites/default/files/styles/paragraph_image_gallery_full/public/2019-11/Value%20Award%20Winners-min_1.jpg?itok=cLNfUgdR