Professional Documents
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Callebaut Annual Report 2009
Callebaut Annual Report 2009
2009/10
Annual Report
* in local currencies
Financial performance
targets extended through
2012/13
In Brief
2
Barry Callebaut at a glance
Barry Callebaut is organized into dierent regions: Region Europe (incl. Western and
Eastern Europe), Region Americas and Region Asia-Pacic. The globally managed Global
Sourcing & Cocoa business is reported as a separate segment like a region. There are
four dierent product groups: Cocoa Products, Food Manufacturers Products, Gourmet &
Specialties Products and Consumer Products.
Europe
Americas
Asia-Pacic
Food Manufacturers,
Gourmet, Consumer
Food Manufacturers,
Gourmet
Food Manufacturers,
Gourmet
Cocoa
57.7% of consolidated
sales volume
22.3% of consolidated
sales volume
3.7% of consolidated
sales volume
16.3% of consolidated
sales volume
+4.1%
+15.6%
+15.5%
+8.2%
+8.3%
+6.3%
+87.6%1
+5.4%
1 Excluding one-o gain on the sale of the Asian Consumer business in the prior year.
3
Key gures Barry Callebaut Group
2009/10
2008/09
Change (%)
in local
currencies
in reporting
currency
Income statement
Sales volume
Tonnes
7.6%
1,305,280
1,213,610
Sales revenue
CHF m
11.3%
6.8%
5,213.8
4,880.2
EBITDA1
CHF m
5.8%
3.2%
470.7
456.1
CHF m
7.9%
5.6%
370.4
350.8
CHF m
13.5%
10.9%
251.7
226.9
Cash ow2
CHF m
9.5%
457.8
418.1
(1.8%)
283.8
289.1
3,514.8
CHF
0.3%
Balance sheet
Total assets
CHF m
1.6%
3,570.8
CHF m
(4.5%)
964.9
1,010.1
Non-current assets
CHF m
(1.8%)
1,405.8
1,432.2
Net debt
CHF m
(7.6%)
870.8
942.7
Shareholders equity 4
CHF m
3.7%
1,302.3
1,255.6
CHF m
13.7%
Ratios
Economic value added (EVA)
147.7
129.9
14.8%
13.9%
19.6%
18.1%
66.9%
75.1%
CHF
22.5%
703
574
CHF
5.6%
71.6
67.8
CHF
10.5%
48.6
44.0
CHF
9.3%
88.6
81.1
CHF
12.0%
14.0
12.5
0.3%
7,550
7,525
Other
Employees
1
2
3
4
5
6
7
8
Cocoa price
London Cocoa Terminal Market
6-month forward prices
in GBP/tonne
2,500
1,000
2,000
750
1,500
500
1,000
250
500
0
Sept. 05 Sept. 06 Sept. 07 Sept. 08 Sept. 09 Sept. 10
Barry Callebaut AG
SPI Swiss Performance Index
0
Sept. 05 Sept. 06 Sept. 07 Sept. 08 Sept. 09 Sept. 10
4
Key gures by region and product group
Sales volume
in tonnes
Sales revenue
in CHF million
1,400,000
5,000
1,200,000
4,000
1,000,000
800,000
3,000
600,000
2,000
400,000
1,000
200,000
0
05/06 06/07 07/08 08/09 09/10
EBIT
in CHF million
Net prot
in CHF million
375
250
300
200
225
150
150
100
75
50
0
05/06 06/07 07/08 08/09 09/10
By region
Europe
Americas
Asia-Pacic
Global Sourcing & Cocoa
753,011 Tonnes
291,399 Tonnes
47,984 Tonnes
212,886 Tonnes
By product group
Cocoa Products
Food Manufacturers Products
Gourmet & Specialties
Products
Consumer Products
212,886 Tonnes
830,849 Tonnes
133,048 Tonnes
128,497 Tonnes
Sales revenue
byregion
region
volume by
for
rst 6 months FY 2009/10
in tonnes
Sales volume
revenueby
byproduct
productgroup
group
in tonnes
for
rst 6 months FY 2009/10
16.8%
9.8%
18.0%
16.8%
16.3%
16.3%
10.2%
3.7%
3.9%
14.4%
17.3%
22.3%
50.8%
62.0%
57.7%
63.7%
2009/10
2008/091
Change (%)
in local
currencies
in reporting
currency
Europe
Sales volume
Tonnes
4.1%
753,011
723,099
Sales revenue
CHF m
4.8%
(0.5%)
3,042.0
3,056.3
EBITDA
CHF m
7.1%
4.1%
324.1
311.4
EBIT
CHF m
8.3%
6.3%
268.7
252.7
252,159
Americas
Sales volume
Tonnes
15.6%
291,399
Sales revenue
CHF m
15.7%
10.8%
998.2
901.1
EBITDA
CHF m
7.0%
7.1%
108.1
100.9
EBIT
CHF m
6.3%
7.2%
92.5
86.3
Asia-Pacic
Sales volume
Tonnes
15.5%
47,984
41,544
Sales revenue
CHF m
23.2%
21.4%
211.1
173.9
EBITDA
CHF m
(26.3%)
(27.5%)
26.2
36.1
EBIT
CHF m
(27.4%)2
(28.4%)2
20.9
29.2
Tonnes
8.2%
212,886
196,808
Sales revenue
CHF m
29.9%
28.5%
962.5
748.9
EBITDA
CHF m
5.8%
3.6%
75.2
72.6
EBIT
CHF m
5.4%
3.9%
54.5
52.5
2009/10
2008/091
in reporting
currency
Industrial Products
Sales volume
Tonnes
8.3%
1,043,735
963,858
Cocoa Products
Tonnes
8.2%
212,886
196,808
Tonnes
8.3%
830,849
767,050
CHF m
14.1%
9.7%
3,679.2
3,354.5
Cocoa Products
CHF m
29.9%
28.5%
962.5
748.9
CHF m
9.6%
4.3%
2,716.7
2,605.6
EBITDA
CHF m
6.1%
4.4%
350.5
335.8
EBIT
CHF m
7.5%
6.3%
290.6
273.5
249,752
Sales revenue
Tonnes
4.7%
261,545
Tonnes
17.3%
133,048
113,466
Consumer Products
Tonnes
(5.7%)
128,497
136,286
1,525.7
Sales revenue
CHF m
5.1%
0.6%
1,534.6
CHF m
19.4%
14.3%
707.6
619.0
Consumer Products
CHF m
(4.6%)
(8.8%)
827.0
906.7
EBITDA
CHF m
1.8%
(1.1%)
183.1
185.2
EBIT
CHF m
1.9%3
(0.8%)3
146.0
147.2
1
2
3
Certain comparatives have been reclassied to conform with the current periods presentation
+87.6% in local currencies (+85.0% in CHF) excl. the one-o gain on the sale of the Asian
Consumer business in prior year
+16.0% in local currencies (+12.9% in CHF) excl. the one-o gain on the sale of the Asian
Consumer business in prior year
6
Strategy
Based on Barry Callebauts nancial targets for the period 2009/10 through 2012/131,
the company aims to signicantly outperform the global chocolate market. Barry
Callebauts ambitious growth strategy is based on three pillars: expansion, innovation
and cost leadership.
Expansion
Innovation
Barry Callebaut is recognized as the reference for innovation in the chocolate industry.
Dedicated R&D teams around the world focus on two dierent areas: Fundamental
research into the health-enhancing properties of the cocoa bean and pro-active research
and development leading to cutting-edge cocoa and chocolate products such as the
development of the Controlled Fermentation technology. The applied R&D teams, on the
other hand, support customers to improve their products and recipes as well as their
production processes on their own production lines.
In total, Barry Callebauts R&D department manages about 1,750 projects, runs almost
7,600 trials and conducts more than 400 technical visits with its customers every year.
Cost leadership
Cost leadership is an important reason why for example international customers outsource chocolate production to Barry Callebaut. The company is continuously improving
its operational eciency by upgrading the technology and achieving higher scale eects
through better capacity utilization, by optimizing product ows, logistics and inventory
management, as well as by reducing energy consumption and lowering xed costs. In
total, manufacturing costs per tonne in scal year 2009/10 were reduced by another 5%
(in local currencies).
1 These targets are on average 68% volume growth per annum and average EBIT growth in local currencies at least in line with
volume growth barring any major unforeseen events.
7
Highlights
December 2009
Barry Callebaut
completed the acquisition of the Spanish
chocolate maker
Chocovic, S.A., specializing in specialty products
for industrial and
artisanal customers.
January 2010
Launch of multiplecertication project
UTZ, Rainforest Alliance
and other product
certication labels
with cocoa farmer
cooperatives in Ivory
Coast in response
to market needs and
trends.
March 2010
Barry Callebaut and
the Malaysian Cocoa
Board signed a Memorandum of Understanding on a collaborative research project
to increase the value of
Malaysian cocoa beans
with the Controlled
Fermentation method.
May 2010
Barry Callebaut
inaugurated a new
chocolate factory
located in Extrema,
Minas Gerais, near
So Paulo, Brazil the
companys rst chocolate factory in South
America.
During the World
Exhibition in Shanghai
from May until October,
Barry Callebaut acted
as the unique supplier
to Godiva, Neuhaus and
Guylian at the Belgian
Chocolate Corner.
August 2010
Barry Callebaut extended the successful farmer
program Quality
Partner Program (QPP)
from Ivory Coast to
cocoa-farming regions
in Cameroon, the fourth
largest cocoa producer
in Africa.
September 2010
Barry Callebaut signed
a long-term global supply agreement with
Kraft Foods Inc., making
Barry Callebaut the
key global cocoa and
industrial chocolate
supplier to the worlds
second largest food
company.
8
Vision and values
Our vision
Barry Callebaut is the heart and engine of the chocolate industry.
Our goal is to be No. 1 in all attractive customer segments and in all major world
markets.
Our heritage, our knowledge of the chocolate business from the cocoa bean to
the nest nished products make us the business partner of choice for the entire food
industry, from individual artisans to industrial manufacturers and global retailers.
We seek to apply our constantly evolving expertise to helping our customers grow
their businesses, and we are passionate about creating and bringing to market new,
healthy products that taste good, delight all senses, and are fun to enjoy.
Our strength comes from the passion and expertise of our people for whom we
strive to create an environment where learning and personal development is ongoing,
entrepreneurship is encouraged, and creativity can ourish.
Our values
Customer focus By anticipating market trends and investing time and eort to fully
understand customer needs, we go to great lengths to provide products and solutions of
superior value through a business partnership with every customer that is characterized
by professionalism and mutual trust.
Passion Our pride in what our company does inspires and motivates us to give our
best at work. We are eager to learn about our business and to share our know-how and
enthusiasm with others.
Entrepreneurship With the goal to create superior customer value, we constructively
challenge the status quo and explore opportunities to innovate: new eating trends, new
markets, new ideas for products and services, and new ways of doing business. We are
willing to take controlled risks and are determined to persevere.
Team spirit Whether in the eld, on the shop oor or in administration we are one
team, sharing a common purpose and common goals. All members of this team actively
engage in open communication and idea sharing and are committed to working together
to achieve our common goals across the whole organization.
Integrity We show respect for our fellow team members and all our stakeholders and
are honest, trustworthy, and open-minded in all our business activities and relationships.
We live up to high ethical standards that promote fairness, equality, and diversity.
As a food manufacturer, Barry Callebaut has a fundamental responsibility to ensure the safety and quality
of our products. As an international company with
operations in 26 countries, we recognize that our
businesses have an inuence on the livelihoods of
many people around the world. Accordingly, we
strive to contribute responsibly to the communities
where we operate.
9
Company history
1999
2002
2003
2003
2004
2005
2007
2007
2007
2007
2008
2008
2008
2008
2008
2008
2008
2008
2009
2009
2009
2009
2009
2010
2010
Download In Brief
www.barry-callebaut.com/documentation
Contents
1 In Brief
134 Glossary
136 Contacts, Financial calendar and Forward-looking statement
12
Market conditions in scal year 2009/10 were challenging with a still rather fragile
world economy, a at global chocolate market, high raw material prices and important
currency uctuations. Barry Callebauts growth strategy, together with a robust business
model, eciency gains as well as tight cost control allowed the company to achieve top
results: sales volume up 7.6%, EBIT +7.9% and net prot +13.5% (both in local currencies).
Barry Callebaut will further rene its existing growth strategy in order to broaden as well
as deepen the expansion of its business.
The global chocolate market declined for the rst time in more than a decade in the previous scal year. Has it returned to positive growth and how did Barry Callebaut perform
under the given market conditions?
Until April 2010, the global chocolate confectionery market was flat in volume terms.
Thereafter, it began to recover but, with a slight plus of 0.3%,1 it has still not returned
to its previous long-term average growth rate of 23% per year. Our industry was faced
with volatile and high raw material prices. Barry Callebaut navigated very well through
these challenges:At +7.6%, our sales volume again significantly outperformed the global chocolate market. Despite the continued pressure from the combined cocoa ratio2
on profitability, we generated a strong operating profit growth of 7.9% in local currencies (+5.6% in CHF) and achieved an excellent net profit growth of 13.5% (+10.9%
in CHF).
What were the most important factors in reaching your targets amid such a challenging market environment?
Juergen B. Steinemann, CEO First and foremost, we have a strong global footprint, which makes us an attractive
partner for our international customers as we can serve them with a comprehensive
range of products around the world. Besides that, we can offer a broad range of products to regional customers.We clearly benefited from our targeted expansion to emerging chocolate markets, most of which performed very well. Emerging markets will become increasingly important in compensating for lower growth rates in more mature
markets. In our Gourmet business we have powerful international brands with
Callebaut and Cacao Barry that offer great chocolate products with convenient applications. Last but not least, our cost leadership as well as our innovation power round
off all these success factors.
Q Do you see any need to reprioritize your corporate strategy?
AJ The past two truly challenging years confirmed that our strategy has served us well in
growing and developing our business. Therefore, we do not see the need for a revolution but rather an evolution: One of our strategic pillars, geographic expansion, was
in particular need of some fine-tuning because we also see opportunities to expand in
scale, breadth and depth.We intend to accelerate the growth of our Gourmet business.
With regard to industrial customers, we want to strengthen our position in the mature
markets of Western Europe and North America. In the emerging markets that we
have recently entered, we aim to develop their full potential. Lastly, we will carefully
evaluate how to enter other emerging markets. Implementing existing outsourcing
1 Source: Nielsen, September 2009August 2010
2 The (forward) combined cocoa ratio is the combined sales price for cocoa butter and cocoa powder relative to the cocoa bean price.
volumes and strategic partnerships as well as securing further outsourcing deals with
local and regional food manufacturers will remain an essential part of our business
strategy.
Q
JBS
JBS
You mentioned Gourmet as one of your key growth areas. Can you tell us more about
your strategy going forward?
We intend to further strengthen the global leadership of our Gourmet & Specialties
business. It is very different from our industrial business: We are talking about different customers, needs, products, and market mechanisms. We are now in the process of
combining the best of both worlds, i.e. we are positioning our Gourmet business as
independent from but interdependent with our industrial business. This means that
we have appointed dedicated management teams in Western Europe and North America, our biggest markets, who will get their own profit and loss responsibility within the
Region to even better steer the implementation of the Gourmet strategy. We will
better segment the different customer groups and markets and adapt our product range
to meet their needs. At the same time, Gourmet will remain interdependent with the
Groups industrial factories and benefit from their scope and manufacturing efficiency. Looking further ahead, we will develop Callebaut and Cacao Barry into global
Gourmet brands and build our marketing activities around them.
You recently announced that Barry Callebaut had become Kraft Foods key cocoa and
industrial chocolate supplier. Do you still see outsourcing and strategic partnerships as
a trend?
We are very pleased about this major long-term partnership agreement with the worlds
second largest food company. It is our first global agreement and the first one that
involves our entire value chain. We were only able to secure it by making a coordinated team effort across all regions, functions and product groups and because we are
fully dedicated to cocoa and chocolate. This contract confirms the trend towards outsourcing and long-term partnership agreements. However, we are not only focusing
on gaining large, global volumes; we are also keen on securing long-term contracts
with major local or regional food manufacturers.
Andreas Jacobs
Chairman of the Board of Directors
13
14
Q
AJ
There is increasing concern over insucient cocoa supplies. Do you share these concerns?
We still see a lot of unsustainable agricultural practices, mainly in West Africa, that have
led to lower yields and quality. To address this situation, we started working directly
with cooperatives and are training cocoa farmers on how to improve crop yields and
quality: We initiated our very own Quality Partner Program (QPP) in Ivory Coast in
2005 and recently extended it to Cameroon. We are a major shareholder in some
other farmer programs: Biolands in Tanzania and Bio United in Sierra Leone. Beyond
that, our new, unique Controlled Fermentation method will give us access to superiorquality cocoa beans and increase yields.
Your activities seem to focus primarily on the quality of the cocoa beans but not on
working practices. What are you doing to eliminate child labor on cocoa farms?
We do not own any cocoa farms but we fully acknowledge our responsibility.We strongly condemn slavery and abusive labor practices that exploit children or put them in a
hazardous or harmful work environment. We believe that poverty is the main reason
why farmers resort to abusive child labor practices. We are convinced that improving
cocoa farmer livelihoods is imperative in the fight against poverty. For a decade,
Barry Callebaut has been working in concert with other leading companies and independent organizations to improve the social conditions of cocoa farmers. We will not
be able to end poverty in Africa by ourselves but we can contribute to a betterment
of the situation and with our active presence in these countries and our programs
we will continue to do so.
AJ
JBS
AJ
What key trends do you see in the chocolate market, and with what kind of innovations
will you respond to them?
As many of our customers are currently struggling to pass the high raw material costs
on to retailers, we see a strong move towards cost-efficient product solutions and a
growing interest in compounds and fillings, areas where we have expanded our offering. Health-conscious consumers want more permissibility when eating chocolate. For
this growing group, we offer applications that are free from allergens, for example, or
that contain higher levels of cocoa flavanols as well as functional ingredients. We have
a full range of rebalanced chocolate alternatives with less fat, sugar and calories. We
recently launched three innovations: A reformulated 100% dairy-free alternative to
milk chocolate, the first chocolate with Stevia a natural sugar substitute without
a laxative effect , as well as the first batches of chocolate based on Controlled Fermentation for premium chocolatiers.
What does Barry Callebaut do to attract and retain qualied employees to support its
growth ambitions?
The most important resource we have in making high performance happen is our people.
It is our aim to give all employees a chance to realize their full potential by offering
them opportunities to broaden their skills and experiences and by providing them struc-
JBS
What challenges do you see for the coming scal year 2010/11, and can you conrm your
performance targets?
We are cautiously optimistic with regard to the economic situation. We believe that
growth will continue to pick up even though the pace of recovery might vary geographically. As a consequence, we assume that the global chocolate market will only grow
approximately 12%, i.e. still below the long-term average of 23% per annum. We
expect raw material prices to stay above the historical averages and to remain volatile. Our strategic priorities will be accelerating the growth of our Gourmet business,
implementing recent outsourcing and strategic partnership agreements, setting the
stage for the next wave of geographic growth in emerging markets, and enhancing our
organizational structures for further successful growth. We will also focus on securing
our long-term supply of cocoa beans, the foundation of our business. With our finetuned strategy, we are confident that we will be able to achieve our financial targets3
for the extended period 2009/10 through 2012/13.
3
These targets are on average 68% volume growth per annum and average EBIT growth in local currencies at least in line with volume growth
barring any major unforeseen events.
Juergen B. Steinemann
Chief Executive Ocer
15
18
Board of Directors
and Executive Committee
Additional information:
www.barry-callebaut.com/organization and www.barry-callebaut.com/board
Board of Directors
Andreas Jacobs, Chairman
Andreas Schmid, Vice Chairman
Rolando Benedick
James L. Donald
Markus Fiechter
Stefan Pfander
Urs Widmer
General Counsel & Corporate Secretary
Roland Maurhofer
The Board of Directors proposes to the Annual General Meeting of the Shareholders that
Jakob Baer be elected as new member of the Board of Directors.
Board of Directors
and Executive Committee
19
Additional information:
www.barry-callebaut.com/executivecommittee
Executive Committee
1
2
Philippe Bertrand, Master Pastry Chef and decorated as Meilleur Ouvrier de France,
Chocolate Academy Meulan, France: The latest trends are crunchy, fondant and
a dash of exotic ingredients, such as Yusu, a Japanese citrus fruit, Matcha green tea or
Wasabi. I am sure they will be associated with speciality chocolates such as plantation
and origin chocolates. On the other hand, chocolate products with a long history or that
are associated with a family of cocoa growers are also being discovered.
22
Report by Regions
Europe
After bottoming out by the end of calendar year 2009, the chocolate confectionery
markets in Western Europe saw a stagnating rst semester followed by a second half
with slightly increasing consumption Eastern Europe still shows negative growth
rates. Thanks to our strong footprint in most of the European countries as well as our
balanced portfolio ranging from artisanal Gourmet customers to large corporate
accounts, we weathered the challenging economic environment with adverse currency
eects and erce competition in our Food Manufacturers business very well.
In total, Barry Callebaut increased its sales volume in Region Europe by 4.1% to
753,011 tonnes. In local currencies, sales revenue outperformed the volume growth
(+4.8%), but was negatively affected by currency translation effects and decreased to
CHF 3,042.0 million or by 0.5% in CHF. Operating profit (EBIT) in the region rose
strongly to CHF 268.7 million, up 8.3% in local currencies (+6.3% in CHF), thanks to
efficiency gains, slight margin improvements and strict cost control.
Overall, the major chocolate confectionery markets in Western Europe reported a 0.9%
growth rate led by Germany (+2.3%) and Italy (+1.6%), while the U.K. and France
slightly contracted. Eastern Europe showed a drop of 5.3%, driven by declines in
Russia (7.4%) and Ukraine (10.7%).1
Western Europe Particularly successful in specialties products
In the Food Manufacturers business, we saw very strong growth in our decorations business and increasing demand for nut and specialties products as well as for compounds
and fillings. These are attractive market segments on which we will focus more in the
near future. We experienced increasing demand for certified chocolate and growing
interest in our own Quality Partner Program (QPP).The long-term global supply agreement we signed with Kraft Foods Inc. confirms the trend towards outsourcing and strategic partnerships.
Massimo Garavaglia
President Western Europe
Report by Regions
Europe
Additional information:
www.barry-callebaut.com/gourmet and www.cacao-barry.com and www.chocolate-academy.com and
www.barry-callebaut.com/beverages and www.barry-callebaut.com/consumers
The contribution from the Gourmet & Specialties Products business was particularly
noteworthy. The European gourmet markets recovered after having been hit by the
recession.The bakery/pastry and confectionery segment showed a stronger upturn than
the HORECA (hotels, restaurants, catering) business. Our distributors and artisans
maintained a low stock policy due to uncertainties about the strength of the recovery
as well as still tight credit lines from their banks.As a result of the acquisition of Chocovic, market share gains, organizational optimization and a strong focus on both existing customers as well as new business opportunities, Barry Callebaut was able to
achieve considerable growth in sales volume as well as revenue.
Following the trend towards the increasing popularity of at-home consumption, Barry
Callebaut launched a new series of 13 ready-to-use Gourmet products under the
Cacao Barry brand for the domestic kitchen. In partnership with Lentre, the ambassador of French gastronomy across the world, this Home Cooking product series was
launched in France and will soon be launched in other European countries.
With the acquisition of Chocovic, we now have a new Chocolate Academy in Spain,
expanding the network to six representations all over Europe with a total of 12 technical advisers and 100 Ambassadors, who inspire the 20,000 professionals attending
the more than 300 demonstrations and 100 training courses organized throughout the
year.
The sales volume of our Beverages division grew very strongly, driven by the acquisition of Eurogran. The company has now been successfully integrated into Barry
Callebaut within a challenging time schedule and is already exceeding the planned
synergies. Beverages has proven to be a highly attractive market especially in Europe,
where Barry Callebaut is now the market leader. A strong trend during this fiscal year
was seen in the growing interest of our customers to develop cocoa-based capsule
solutions for tabletop coffee machines.
In line with its strategic objective, the Consumer Products business was able to increase
its sales in major markets outside Germany and improved its country portfolio. We
started a process of carving out our consumer business from our other activities in
order to put it on a stand-alone basis, which will facilitate the eventual divestment. Our
plan remains unchanged to focus on our industrial and artisanal business and divest
our consumer activities.
2009/10
2008/09*
in local in reporting
currencies
currency
Sales volume
Tonnes
4.1%
753,011
723,099
Sales revenue
CHF m
4.8%
(0.5%)
3,042.0
3,056.3
EBITDA
CHF m
7.1%
4.1%
324.1
311.4
EBIT
CHF m
8.3%
6.3%
268.7
252.7
23
24
Report by Regions
Europe
Additional information:
www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet
As the purchasing power of consumers is growing, demand for more innovative and
premium products is also increasing. We have noticed that new trends have not always
originated from the big multinationals; sometimes they came from local, fast growing
players. To support this development, we will continue to invest in more local R&D
people.
In our Food Manufacturers business, we achieved a double-digit increase in volumes
and profits in an overall declining market thanks to more efficient operations and
a better product mix. With the market picking up in Russia in the last quarter of fiscal
year 2009/10, Barry Callebaut generated slightly positive growth in an overall tough
market. We noted additional business originating from the CIS countries, where new
players have invested in high quality chocolate confectionery. In the ice cream business, we see more players using real chocolate instead of compound.
Russia and the CIS countries showed very strong volume growth in our Gourmet &
Specialties Products business as we extended our product portfolio and further
expanded our distribution network. Overall, Barry Callebaut increased volumes by
double digits in this product group. While we achieved our ambitious growth targets in
Turkey and Poland, Greece suffered from the countrys financial difficulties.
1 Source: Nielsen, September 2009August 2010
Filip De Reymaeker
President Eastern Europe
Report by Regions
Americas
Americas Substantial
growth in a mixed market environment
Additional information:
www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet
Despite aggressive competition and overall soft economic market conditions, Barry
Callebaut achieved solid results in Region Americas. In scal year 2009/10, we rounded
o our strong manufacturing footprint in the region with capacity expansions at existing
facilities and with the inauguration of our rst chocolate factory in South America
in May 2010. Barry Callebaut is now in a favorable position to tap a tremendous market
potential not only in Brazil but throughout the entire region.
The mature economies of the United States and Canada slowly returned to positive
GDP growth after being hit hard by the financial crisis. However, consumer confidence
softened and the economic recovery stalled in the second half of the fiscal year. In contrast, the developing regions of Brazil and Mexico showed consistent strength. Brazil
navigated the crisis relatively well and its 2010 GDP growth is expected to accelerate
to 6.4%. Mexico was strongly affected by the crisis, but is projected to rebound to
a growth rate of 4.3% for 2010. Growth potential in the Latin American region looks
promising at an estimated 4.2% per annum over the 20112012 period,1 which bolsters
our confidence in our recent expansions in Mexico and Brazil.
Chocolate consumption in the United States dipped to low levels in early 2010 but rebounded strongly in the third quarter of our fiscal year; overall, the chocolate market
in the United States grew by 2.7%. We also benefited from growth in the Brazilian
chocolate market, where volumes increased by 3.5%.2
Region Americas achieved strong overall sales volume growth of 15.6% to 291,399
tonnes, driven by long-term outsourcing and supply agreements with key Corporate
Accounts as well as through broad-based growth in our Gourmet business. Regional
sales revenue was just shy of the CHF 1 billion mark at CHF 998.2 million, corresponding to an increase of 15.7% in local currencies (+10.8% in CHF) versus last year.
Operating profit (EBIT) rose considerably by 6.3% in local currencies (+7.2% in CHF)
and amounted to CHF 92.5 million, positively influenced by the volume growth in both
the Food Manufacturers and the Gourmet & Specialties Products business, partly
offset by infrastructure investments to support the ongoing growth, including the startup costs for the new factory in Brazil.
The inauguration of our new chocolate factory in Extrema, Minas Gerais, Brazil, on
May 27, 2010 marked another milestone in Barry Callebauts strategy to selectively
expand its geographic presence to those emerging markets that offer above-average
growth opportunities. The combination of our new chocolate factory with our existing
cocoa factory in Ilhus, Bahia, rounds off our local, integrated footprint and we are now
1 Source: The World Bank, summer 2010
2 Source: Nielsen, September 2009August 2010
David S. Johnson
CEO and President Americas
25
26 Report by Regions
Americas
Additional information:
www.chocolate-academy.com and www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet
well positioned to become the No. 1 chocolate supplier to Brazils fast growing food
service industry, which includes restaurants, fast food restaurants, bakeries, pastry
shops, in-store bakeries, caterers, hotels, chocolatiers, hospitals and school canteens.
These markets offer Barry Callebaut significant growth opportunities.
The success of our Chocolate Academy in Chicago continued. Our staff of professional chefs and technical advisers conducted formal training courses for artisans, pastry
chefs and other professional users, providing a forum to improve their skills and techniques while informing them of the latest chocolate-making trends.
The Food Manufacturers Products business volume grew by double-digits, driven by
large key accounts, leading to an overall gain in market share. Barry Callebauts strong
global presence enabled us to win further business volume with customers based in
Region Americas who were looking to Barry Callebaut to meet their worldwide needs,
of which our recently announced deal with Kraft Foods Inc. is a good example. In
addition to base-business growth, our corporate innovations continue to drive specialties sales, strengthening our overall image as a leader in the cocoa and chocolate
industry. One new launch this year was our ACTICOA chocolate, which provides
high cocoa flavanol products for health-conscious consumers.
Over the period under review, the North American food service market served by our
Gourmet team experienced an only modest recovery from the economic crisis in terms
of overall volume. However, the Gourmet & Specialties Products business clearly outperformed general economic trends thanks to substantial growth in higher-end import
brands such as Callebaut and Cacao Barry. Moving forward, we are expanding our
Gourmet & Specialties business in Latin America with a combination of local brands
and Callebaut and Cacao Barry imports.
2009/10
2008/09*
252,159
in local in reporting
currencies
currency
Sales volume
Tonnes
15.6%
291,399
Sales revenue
CHF m
15.7%
10.8%
998.2
901.1
EBITDA
CHF m
7.0%
7.1%
108.1
100.9
CHF m
6.3%
7.2%
92.5
86.3
EBIT
Report by Regions
Asia-Pacic
27
Asia-Pacic A strong
growth story continues
Additional information:
www.barry-callebaut.com/foodmanufacturers and www.barry-callebaut.com/gourmet
The general growth dynamics in Asia did not translate into higher chocolate consumption
in all markets in scal year 2009/10: While some chocolate markets such as China, India,
Indonesia and Malaysia showed signicant growth, Japan one of the major markets
was at. Throughout the region, the market for compound is still growing faster than for
chocolate. However, our Gourmet business will continue to benet from demand for
high-quality chocolate as more companies upgrade from compound to chocolate and
from further expansion in the HORECA (hotels, restaurants, catering) sector.
In 2009 economic growth rates in Asia-Pacific were mixed, ranging from a GDP
decline of 5.2% in Japan to an impressively resilient growth rate of around 9% for
China. In 2010, GDP growth in the region is expected to range between 4.5% and 9.5%.1
The regional chocolate confectionery market grew by 4.0%,2 much faster than the global market, and we expect it to keep growing at the same pace. The launch of several
innovative products such as rebalanced and ACTICOA chocolate strengthened our
position in Asia-Pacific as innovation leader.
In Region Asia-Pacific, Barry Callebaut increased its sales volume by 15.5% to 47,984
tonnes. Sales revenue went up by 23.2% in local currencies (+21.4% in CHF) and came
in at CHF 211.1 million. Key drivers for this strong growth were a higher demand for
quality chocolate, including the companys imported European Gourmet products, and
market share gains. Due to the disposal of the Asian consumer business in the previous
fiscal year, operating profit (EBIT) decreased by 27.4% in local currencies (28.4%
in CHF) and amounted to CHF 20.9 million. Without this one-off effect, EBIT grew
87.6% in local currencies (+85.0% in CHF).
The volumes in our Food Manufacturers business grew at double-digit rate. In China,
the economy is booming and so is the chocolate confectionery market, growing on
average at 8.2%.2 Both our multinational as well as local customers showed a very good
performance. The other main growth markets were Korea, Malaysia and Australia.
In our Gourmet & Specialties Products business, we saw strong demand for both
European brands as well as for the local brands both showed double-digit growth in
almost every market.
1 Source: The World Bank, summer 2010
2 Source: Nielsen, September 2009August 2010
2009/10
2008/09*
in local in reporting
currencies
currency
Maurizio Decio
President Asia-Pacic
Sales volume
Tonnes
15.5%
47,984
41,544
Sales revenue
CHF m
23.2%
21.4%
211.1
173.9
EBITDA
CHF m
(26.3%)
(27.5%)
26.2
36.1
EBIT
CHF m
(27.4%)1
(28.4%)1
20.9
29.2
With our strong presence in cocoa origin countries, we have direct access to our main
raw material: high-quality cocoa beans. As in the previous scal year, we saw volatile
cocoa markets and new historical highs driven by fears of a poor crop and heavy speculative buying. Having the adequate tools and teams in place, we dealt very well with this
challenging situation. Interest in organic cocoa leveled o but demand from customers
switching to certied products such as Rainforest Alliance, UTZ Certied or Fair Trade
increased considerably.
The globally managed Global Sourcing & Cocoa business is now reported as a separate operating segment like a Region. On the one hand, the segment is responsible for
the global procurement of our high-quality raw materials such as cocoa, sugar, dairy
products, oils, fats, nuts and other ingredients as well as packaging material. On the
other hand, Global Sourcing & Cocoa is the global cocoa production unit for semifinished products such as cocoa liquor, cocoa butter and cocoa powder. We sell about
half of these products to our industrial customers, who use them in their products, and
the other half is for our own use.
Global Sourcing & Cocoa strongly increased the volume of cocoa products sold
to third-party customers by 8.2% to 212,886 tonnes. North and South America were
the top performers, with both showing double-digit growth. Sales revenue came in
at CHF 962.5 million a significant increase in local currencies of 29.9% (+28.5% in
CHF) due to both higher cocoa bean prices and higher volumes. Operating profit
(EBIT) grew by 5.4% in local currencies (+3.9% in CHF) to CHF 54.5 million, positively influenced by the good management of our butter and powder activities.
Managing the volatile raw material markets
Cocoa prices were very volatile this fiscal year. Jumping aggressively in the initial
months, the terminal market price for cocoa in London reached a 33-year high in July
but then fell back to close at GBP 1,954 per tonne on August 31, 2010, around last years
level. The markets were concerned about the size of the 2009/10 crop in Ivory Coast
and Ghana, accountable for over 50% of the worlds cocoa production.These concerns
did not materialize and there was even a small surplus. The quality of this years crop
was relatively good and did not significantly deviate from the 2008/09 crop. There is
strong evidence that the crop in Ivory Coast will grow during the coming year and that
the world crop for 2010/11 will close with a surplus.
Since raw materials account for about 70% of our costs, their market prices represent
one of the major risks in our core business. Barry Callebaut navigated its way through
the volatile cocoa markets quite well and limited its exposure to price fluctuations by
applying a variety of sourcing strategies and risk management tools, such as vendor
assessment, price hedging through cocoa derivatives, futures and physical forward
contracts as well as arbitrage management. Using a Historical Value at Risk Engine
Model, we also kept our overall financial risk exposure to commodity price risks within the limits defined by the Board of Directors.
Steven Retzla
President Global Sourcing & Cocoa
31
Additional information:
www.barry-callebaut.com/cocoa-to-chocolate and www.barry-callebaut.com/csr and www.qualitypartnerprogram.com
2009/10
2008/09*
in local in reporting
currencies
currency
3.9
3.7
3.5
Sales volume
Tonnes
8.2%
212,886
196,808
3.3
Sales revenue
CHF m
29.9%
28.5%
962.5
748.9
3.1
EBITDA
CHF m
5.8%
3.6%
75.2
72.6
2.9
EBIT
CHF m
5.4%
3.9%
54.5
52.5
2.7
2.5
Sept. 05
06
07
08
09
10
32
Cocoa Empowering cocoa farmers to increase incomes and improve family livelihoods
Cocoa is a typical product of the tropics and very labor-intensive: About 4.5 million
smallholder cocoa farmers in about 30 countries situated around the equator produce
more than 3.5 million tonnes of cocoa every year. Without cocoa, there is no chocolate.
Therefore, helping to ensure sustainability in the cocoa sector is an imperative for us.
This is why we work with cocoa farmers to improve crop yields and quality, thereby
enhancing farmer incomes and improving family livelihoods. It is a win-win business
partnership: farmers can earn more and improve their livelihoods through higher yields
and better quality; we benefit by having sufficient quantities of quality cocoa to meet
our ambitious growth strategy; and consumers benefit from sustainably produced
chocolate. Improving farmer livelihoods is key in the fight against poverty; poverty is
the main reason for unfair labor practices, including abusive child labor. Ensuring responsible labor practices is a major concern of our industry and consumers worldwide.
Signature Program: Quality Partner Program (QPP) in Ivory Coast and Cameroon
ExCo program champion: Juergen Steinemann, CEO
Gaby Tschofen
Vice President Corporate Communications & CSR
Employees Developing our people to help our company continue to prosper and grow
It is our people who make Barry Callebaut competitive and successful. It is in our
interest to give all our employees a chance to realize their full potential by offering
development and training opportunities and providing regular feedback on their performance. While we want to continue to attract talented people from the outside to
gain new ideas, we are committed to developing more of our future leaders from
within.
Signature Program: Performance Management & Development Program PMDP
ExCo program champion: David S. Johnson, CEO and President Americas
As the heart and engine of the chocolate industry, we are committed to taking the lead
in empowering cocoa farmers to become more productive, in becoming as energyefficient as possible as a company, and in developing our people. This CSR roadmap
will guide our actions so we can continue to grow responsibly.
Assuming responsibility also in industry partnerships
As a member of the World Cocoa Foundation (WCF), we help fund research and
development programs that benefit farmers in the cocoa-growing regions of Africa,
Southeast Asia and the Americas.We also support the Sustainable Tree Crops Program
(STCP). Since 2000, STCP has been working to improve the economic and social wellbeing of tree crop farmers in West and Central Africa and the environmental sustainability of their agricultural systems. Barry Callebaut also joined with the World Cocoa
Foundation and the Bill & Melinda Gates Foundation to improve the livelihoods of
cocoa-farming households in Ivory Coast, Ghana, Nigeria, Cameroon and Liberia.
Committed to minimizing
the environmental impact
Employee development
33
Abhiru Biswas, Master Pastry Chef, Chocolate Academy Mumbai, India: I was inspired
by a class called Creative Art on the Plate during training at Hotel School. I also watched
online demonstrations by French pastry chefs who had acquired the title of Meilleur
Ouvrier de France and I admired their skills. My own passion was enhanced by the
expertise of these distinguished French pastry chefs, and I now try to fuse French and
Indian Patisserie.
36
In addition to building our first chocolate factory in South America, we increased the
capacity of some of our existing plants: For instance, we added a liquid chocolate line
in Pennsauken, U.S., as well as in Lodz, Poland, and installed a drops line in Singapore.
In the course of this fiscal year, Barry Callebaut invested a total of CHF 119.3 million
in the extension, maintenance as well as optimization of the factory base. By speeding
up our efficiency, we were able to reduce manufacturing costs per tonne of activity by
5%1 in this fiscal year.
In order to make our continuous improvement process more effective, we began a project with an external specialist to increase Barry Callebauts manufacturing efficiency
and introduce standardized and uniformly structured work processes. This project is
now underway at selected pilot plants in each region. During the implementation,
a team of local Barry Callebaut employees at each site is being trained that will later
implement this new way of working at the other plants in their region.
Four focus areas of our continuous improvement program
First, Barry Callebaut is taking action to ensure the continuous improvement of its
quality standards. All our factories worldwide must fulfill BRC standards by the end
of 2011 BRC stands for British Retail Consortium and is one of the five food safety
standards recognized by the Global Food Safety Initiative, a platform that regroups
global retailers and a large number of food manufacturers. Today, 60% of our factories
have already achieved BRC Grade A certification. The majority of them are located in
Europe.
1 In local currencies
Dirk Poelman
Chief Operations Ocer
Raw materials represent about 70% of our total costs. Therefore, secondly, we have
initiated special projects in the main regions in order to optimize the use of these
materials and to reduce waste.
A third focus area of continuous improvement is energy and the reduction of carbon
emissions: Processing cocoa and making chocolate is energy-intensive.As a responsible
company, we aim to reduce Barry Callebauts energy consumption and increase our use
of renewable energy. This will reduce overall carbon emissions originating from our activities. Three main targets were defined, to be realized by the end of fiscal year 2013:
20% reduction of energy consumption per tonne
20% reduction of carbon emissions per tonne
20% of energy to come from renewable sources
With a 4% reduction in our overall energy use per tonne at the end of year one, we are
slightly behind our target of 5% yearly savings. However, since some of the energy
efficiency improvements were not realized until the second half of the year, we expect
to catch up in meeting our target in the coming months. This fiscal year, we were able
to reduce our carbon emissions by 4% per tonne, mainly from the reduction of energy
consumption. By increasing the share of renewable energy sources, we will be able to
speed up the reduction in carbon emissions and reach our 4-year goals. For instance,
we are already using cocoa shells to produce steam. To extend this, we are optimizing
the efficiency of our shell burners, review the possibilities to extend our capacity to
produce steam based on this bio mass and we are setting up a test plant for the
production of bio gas, based on the fermentation of cocoa shells. This will be tested in
San Pedro in Ivory Coast.
The maintenance management system our fourth focus area which we began to implement this fiscal year, has already been rolled out at 12 sites in the Group. This tool
will also allow us to improve the purchasing of our spare parts through volume pooling in the different regions. Compared to last year, we were able to reduce our total
maintenance costs by 4% per tonne.
Reducing energy
consumption and costs
with new technology
Signicant output
improvement in Cameroon
37
38
Barry Callebaut works in close partnership with its approximately 6,000 industrial
customers and tens of thousands of artisanal customers worldwide. Our ability to
produce a comprehensive and unique range of specially tailored products manufactured from almost 2,000 recipes that meet our customers specications truly
sets us apart from the competition.
Of the large number of projects we had the pleasure to conclude with our customers
during this fiscal year, we would like to highlight some examples in each of the different product groups:
Food Manufacturers Products:
Barry Callebauts role as chocolate supplier to the world-renowned Belgian chocolate
makers Godiva, Guylian and Neuhaus during the World Expo in Shanghai from May
until October 2010 generated much attention both from customers and the media.
Every day, 30,000 visitors at the Belgian pavilion were delighted by the exquisite chocolate creations of Belgian artisanal chocolatiers.
Gourmet & Specialties Products:
Hotel Chocolate is one of the fastest growing chocolate retail businesses in Europe
and the world. Ever since it was founded 15 years ago, it has been brazenly committed
to bringing quality and innovation to the high street and is now present in the U.K.,
the U.S. and the Middle East. Barry Callebaut is proud to be Hotel Chocolates key
supplier, fuelling its growth and helping it overcome many challenges from the supply
chain to product development, in particular their change from solid to liquid supply.
Consumer Products:
Kfer is an internationally acclaimed brand of premium products for connoisseurs and
gourmets all over the world. Stollwerck is proud to be the sole licensee of the entire
line of Kfer chocolate. Together with Kfer, it developed an exquisite portfolio of
pralines and truffles that is now being launched in the German food retail sector.
Presented in an especially designed display, it enables retailers to expand their gourmet expertise and enhance their offering on the premium confectionery shelf.
We put customers first, which is why we are very proud to serve some of the best-known
names in the food industry:
Chocolat Frey (Switzerland) As the No. 1 producer in the Swiss chocolate market, we
dont view Barry Callebaut as a conventional supplier but rather as a business partner
which is also why we decided to become involved in Barry Callebauts Quality Partner
Program. With this program, Barry Callebaut gives us precise information on the origin
of the beans and we can be assured that the farmers receive a fair price.
Cacao Fine Chocolates (Australia) Undoubtedly, Barry Callebaut is our preferred
supplier of premium chocolate. With its Australian and international support team, we
never have to go far for assistance and knowledge. The relationship between Barry
Callebaut and us has been built on a mutual understanding of the importance of quality
and service, two priorities that very much go hand in hand.
J.CO Donuts & Coee (Singapore) Barry Callebaut delivers the finest of their
premium quality products with a consistency that we can always trust while providing
excellent customer service for its clientele. We are proud to have Barry Callebaut as our
supplier.
Magnat 100% chocolate (Russia) As the leading, most indulgent brand in the
Russian ice cream market, we searched the world for the best chocolate for our ice cream.
Only Barry Callebaut chocolate was able to satisfy our needs and the tastes of Russian
ice cream lovers. Barry Callebaut is our strategic and most valuable partner.
To serve our customers most eectively, Barry Callebaut is organized by region. There are
four dierent product groups: Cocoa Products, Food Manufacturers Products, Gourmet
& Specialties Products and Consumer Products.
Business Segment
Industrial Business
Cocoa Products
Food Manufacturers
Products
Gourmet &
Consumer Products
Specialties Products
Providing chocolate to
multinational and national
branded consumer goods
manufacturers who incorporate these ingredients
in their consumer products.
Product Group
Activity
39
Jrme Landrieu, Master Pastry Chef, Chocolate Academy Chicago, Illinois, U.S.:
I sometimes feel that chefs lose sight of the end consumer when making their chocolate
creations. It was therefore clear to me and my team that we also needed to oer nonprofessional-level classes to teach consumers about our premium chocolates. Local grocery
stores and markets are now carrying our Callebaut products, and we are oering
consumers courses to develop and rene their palates.
42
Innovation
Barry Callebaut is the only global cocoa and chocolate manufacturer with an integrated R&D network. We operate 15 R&D centers worldwide, where we conduct applied
R&D for our customers. The innovation and applied R&D teams use 14 pilot facilities
and 15 application labs to conduct small-scale test runs producing high-quality cocoa
and chocolate products, to make end applications, and to improve products and recipes for our customers and their production processes.
Key market trends that drive our R&D eorts
We expect cocoa raw material prices to rise in the coming years. Because of this, we
have to find new ways to manufacture products with the same quality, but at lower costs.
Many of our customers are increasingly moving towards cost-efficient product solutions and we see a growing interest in compounds and fillings, where we already have
the broadest assortment of products in the industry for every possible application.
On the other hand, indulgence remains the best rationale for premium chocolate products. That is why we also notice that many of our key customers are focusing on the development of premium-praline-type products with multiple ingredients for sale in
mass retail. With our broad specialty assortment as well as our capabilities in fillings,
inclusions, new texture elements and decorations, we are well positioned to successfully support our customers.
Although chocolate is the ultimate comfort food, consumers are interested in healthier alternatives to standard chocolate: More and more, they are choosing products that
are free from allergens or that have cleaner labels like gluten-free, lactose-free, and
without artificial colors and aromas. Alternatives also include chocolates with higher
levels of cocoa flavanols or functional ingredients. Increasing obesity levels are an
acknowledged health issue worldwide. Barry Callebaut needs to actively develop
indulgent chocolate alternatives containing fewer calories, less fat and less sugar
we call these applications rebalanced. This fiscal year, we conducted more than
200 customer projects in this area.
Hans Vriens
Chief Innovation Ocer
Innovation
We are very proud to have launched several major product innovations exclusively for
three Gourmet customers during the scal year:
Dairy-free alternative to
milk chocolate
43
Marcin Pazdzior, Master Pastry Chef, Chocolate Academy Lodz, Poland: I graduated
from the Culinary School in my hometown Wroclaw, Poland; then I acquired professional
expertise in one of the best pastry shops and hotels in town. In the courses I teach for
our artisanal customers, I try to emphasize that the most important factor when working
with chocolate is devotion. Devotion always leads to success.
46 Employees
It is our employees who make Barry Callebaut successful. To achieve our ambitious
business goals, we need to define clear targets for each employee and prepare them for
the future challenges in our demanding business environment. With the new PMDP,
we have developed a business tool that helps to align the efforts and targets of individuals with the strategic priorities and goals of our company. We strongly believe that
offering excellent personal development and career opportunities is the fuel for our
future success. That is why the PMDP emphasizes the personal development and
career aspirations of our bonus-eligible employees. In addition, it helps each employee
to understand how his or her job fits within the broader mission of Barry Callebaut
and how success is ultimately defined.
An important tool for personal development and
The PMDP is a business steering instrument for Barry Callebaut. It is closely tied to
the business planning cycle and the companys overall targets.As of fiscal year 2010/11,
the PMDP is initiated at the beginning of each fiscal year with a performance review
meeting between managers and employees. In this discussion, employee performance
is assessed and the relevant targets for the new fiscal year are defined.
Barbara Becker
Head of Global Human Resources
Employees
47
Additional information:
www.barry-callebaut.com/trainees
Two former trainees talk about the experience they gained in their specific field and
what their next career steps after program completion will be:
Maa Adoma Addae-Afoakwa, Graduate Trainee, Ghana
I never thought I would cut cocoa beans myself! Being in the program has
helped me a lot to understand Barry Callebauts business from the said
cocoa beans to the finished product on retail shelves. While working in different countries like Ghana, Ivory Coast, France and the U.K., I also gained lots
of insights with respect to the different cultures. I am now looking forward to continuing my career within Barry Callebaut in the area of project implementation in my home
country Ghana.
Frdric De Wolf, Graduate Trainee, Barry Callebaut Belgium
I now have a very good idea of how our company is organized. The program
also helped me to further develop my career visions. In the coming years, I plan
to focus on building my commercial skills and becoming more familiar with
our products from an application point of view by understanding our customers and markets better which I will do in my new function as Product Manager for
our Food Manufacturers business in Eastern Europe. I think this is an ideal starting
point.
Number of employees
per geographic region
Number of employees
per function
8%
Average seniority
in years
12%
Europe
Americas
Asia-Pacic
Africa
7%
19%
13.5
8.9
5.0
9.5
28%
Personnel expenses
in CHF million
60%
66%
2009/10
2008/09
2007/08
Europe
Americas
Asia-Pacic
Africa
Number of employees: 7,550
4,959
1,462
492
637
Management
Oce sta
Factory sta
926
2,094
4,530
488.5
489.6
520.3
48 Employees
The Excellence Award recognizes managers and their teams who are willing to go the
extra mile, who are putting all their passion into their work and, thus, have made
a positive impact on the company in the scal year. The seven Excellence Award 2010
winners were nominated by their Presidents.
Employees
The annual Chairmans Award recognizes employees who have been with Barry Callebaut
for a number of years and have demonstrated outstanding performance at work, as
well as a strong social commitment in their local communities. They are individuals who
embody the Barry Callebaut values of customer focus, passion, entrepreneurship, team
spirit and integrity.
The Chairmans Award was inaugurated in 1995 by Klaus Jacobs, the former Chairman
of Jacobs Holding AG and founder of Barry Callebaut. Since then, the Chairmans
Award has been given to a selected number of employees each year.
In 2010, fourteen Barry Callebaut employees from eleven countries received the award
and were invited together with their spouses or partners to come to Switzerland to be
given the award by Chairman Andreas Jacobs and CEO Juergen Steinemann.
49
Contents
52
Konzernrechnung
Interview
with the CFO
Q How did Barry Callebaut manage to achieve double-digit net prot growth despite the
relatively weak economic environment?
Victor Balli The key is to generate top-line momentum and grow sales volumes much faster than the
market. If we can continuously reduce manufacturing and logistics costs per tonne at
the same time and keep overhead costs stable both a major focus of our company for
years we can create a strong basis for profitable growth.
Q With the level of top-line growth you have achieved, would it be possible to show an even
greater operating leverage?
VB If the Group continues to grow volumes at the current pace, it is difficult to increase
profits even faster. We are constantly investing in new factories or expanding existing
lines and operations. As the outsourcing partner of choice we cannot afford to make
any mistakes. As such we need to invest in quality and services as well. Over time,
though, we should be able to further optimize current processes and achieve better
leverage.
Q How do you manage the volatility of raw material prices and other risks within the
business?
VB First of all, for about 80% of our sales we run a business model that allows us to pass on
fluctuations in costs of raw material prices to our customers. We quote market prices
to our customers and once we receive an order, we hedge the underlying raw materials needed. Similarly, we constantly eliminate all transactional currency exchange risks
through our central treasury department. My risk department monitors commodity
prices and currency exposures on a regular basis using a Value at Risk (VaR) model.
Q Your net nancial expenses are going down year by year. Will this continue?
VB This fiscal year, we benefited from lower average interest rates, a flat net debt and our
stable financing structure. This should continue for at least another year. While there is
no refinancing pressure, we constantly monitor the financial and capital markets to look
for windows of opportunity to further improve our capital structure and the average
term of our financing.
Victor Balli
Chief Financial Ocer
Konzernrechnung
Interview
with the CFO
Q Following a review of Barry Callebauts annual accounts by SIX Swiss Exchange, you have
announced that you will modify the companys accounting model. What eect will this
have and when will it be applied?
VB The review showed that there are different expert views on how to best apply IFRS on
our business model. While Barry Callebaut was cleared of all charges, we nonetheless
decided to adapt a less controversial accounting model effective fiscal year 2010/11, in
line with the Groups strategy of increased sourcing in the origin countries. In the new
model, we will value inventories at the lower of cost and net realizable value. The
cocoa price risks related to inventories exceeding firm chocolate sales commitments
will be hedged with cocoa futures in a fair value hedge relationship. I expect the revised
model to produce essentially the same result for the income statement as today.
Q Information Management is also under your responsibility. What contribution did this
department make to the overall Group?
VB The IT/IM department is an important pillar for the fast development of our business.
Without the appropriate systems we would not be able to cope with the speed of our
growth. Most of our factories and operations worldwide run on a common SAP platform. This allows us to smoothly add new factories and create transparency and traceability along the entire supply chain.We have continuously increased IT/IM investments
over the past years and they now run at about CHF 30 million per annum; at the same
time, IT operating expenses were kept flat.
Q What is your main focus for scal year 2010/11?
VB Besides achieving our guidance in terms of growth and profitability, we will continue
to closely monitor and reduce our working capital. At the same time, we will try to
simplify and centralize our support and overhead processes. Finally, securing long-term
credit facilities at competitive terms, maintaining our attractive tax rate plus finding
and keeping good talents are a permanent focus of my teams.
In view of our fast growth combined with the high volatility of raw material prices, pressure from customers paying later
and attempts of suppliers to reduce credit terms, Barry Callebaut initiated a program called Capital Excellence this scal
year. The objective is to reduce working capital by 20% over 3 years on a comparable basis. The program is driven by nancial controllers but operational business people are also heavily involved. It is also part of the bonus incentive plan of most
managers. In the rst year, we made good progress in inventory and receivables management while payables need further
improvement.
53
54
Konzernrechnung
Financial
Review
Financial Review
Konzernrechnung
Financial
Review
Income taxes increased to CHF 37.3 million from CHF 32.7 million in prior year. This is mainly the result of a higher profit before
income taxes whereas the Groups effective tax rate was almost constant at 12.9% compared to 12.6% the year before.
Net profit for the year amounted to CHF 251.7 million, a strong
growth of 10.9% compared CHF 226.9 million in prior year. In local
currencies, the increase amounted to 13.5%. This is the result of the
higher operating result and lower net financial expenses. Net profit
for the year attributable to the shareholders of the parent company
amounted to CHF 251.2 million, compared to CHF 226.9 million in
the precedent year.
Basic earnings per share increased by 10.5% to CHF 48.62, up
from CHF 43.99 last year. Cash earnings per share, defined as operating cash flow before working capital changes divided by basic
shares outstanding, showed a considerable improvement of 9.3% to
CHF 88.60 up from CHF 81.05 in prior year.
55
56
Konzernrechnung
Consolidated
Financial Statements
Consolidated Income
Statement
Notes
2009/10
2008/09
5,213,779
4,880,177
(4,477,608)
(4,172,355)
736,171
707,822
in thousands of CHF
Revenue from sales and services
Cost of goods sold
Gross prot
Marketing and sales expenses
General and administration expenses
(120,781)
(120,324)
(248,794)
(250,608)
Other income
20,456
34,357
Other expenses
(16,641)
(20,494)
370,411
350,753
2,021
5,904
Financial expenses
(83,122)
(97,493)
17
(225)
484
289,085
259,648
(37,342)
(32,723)
251,743
226,925
251,226
226,907
517
18
48.62
43.99
48.47
43.85
10
11
Consolidated
Financial Statements
57
Consolidated Statement of
Comprehensive Income
Notes
2009/10
2008/09
251,743
226,925
(3,580)
(6,339)
in thousands of CHF
Net prot for the year
Cash ow hedges
Tax eect on cash ow hedges
14
1,585
2,566
(138,026)
(86,930)
(140,021)
(90,703)
111,722
136,222
111,309
136,257
413
(35)
58
Consolidated
Financial Statements
Assets
as of August 31,
Notes
2010
2009
17,360
33,993
in thousands of CHF
Current assets
Cash and cash equivalents
Short-term deposits
750
2,137
12
587,380
524,847
Inventories
13
1,186,231
1,294,545
14
2,760
5,489
370,580
221,649
2,165,061
2,082,660
872,458
Non-current assets
Property, plant and equipment
15
830,866
Investments in associates
17
3,479
4,038
Intangible assets
18
512,494
493,684
19
51,361
51,918
7,586
10,089
1,405,786
1,432,187
Total assets
3,570,847
3,514,847
2010
2009
Notes
in thousands of CHF
Current liabilities
Bank overdrafts
20
13,466
29,338
Short-term debt
20
175,938
222,885
21
769,537
832,440
14
Provisions
22
41,968
36,026
371,059
153,922
15,558
16,751
1,387,526
1,291,362
Non-current liabilities
Long-term debt
23
699,516
728,293
24
105,114
122,701
Provisions
22
5,861
4,202
19
58,721
68,455
10,946
43,689
880,158
967,340
2,267,684
2,258,702
Total liabilities
Equity
Share capital
25
197,494
262,119
1,104,787
993,437
1,302,281
1,255,556
Non-controlling interest
Total equity
Total liabilities and equity
882
589
1,303,163
3,570,847
1,256,145
3,514,847
Consolidated
Financial Statements
59
Notes
2009/10
2008/09
289,085
259,648
in thousands of CHF
Prot before income taxes
Adjustments for:
Depreciation of property, plant and equipment
15
77,861
82,309
18
22,428
23,065
7, 15
566
(1,502)
(6,152)
(30)
(17,950)
(15,852)
28,408
(58,016)
(47,183)
(82,503)
(76,721)
160,038
57,951
4,768
5,462
Write-down of inventories
13
(1,384)
3,024
2,615
16,033
(6,078)
(8,455)
4, 24
5,716
225
11,577
(484)
(Interest income)
(2,021)
(3,883)
Interest expenses
67,061
86,223
457,791
418,058
(24,513)
(24,199)
(143,387)
(9,307)
2,025
(19,004)
(11,151)
(4,231)
280,765
361,317
(62,221)
(77,604)
(40,800)
(43,070)
177,744
240,643
60 Consolidated
Financial Statements
Notes
2009/10
2008/09
15
(119,258)
(113,314)
in thousands of CHF
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Purchase of intangible assets
19,580
2,370
18
(25,850)
(31,129)
61
(36,199)
(16,938)
(164)
17,198
(1,396)
1,309
175
(141)
(589)
2,453
2,048
Interest received
1,986
2,787
(156,120)
(138,891)
2009/10
2008/09
112,546
94,493
(136,198)
(246,946)
151,820
149,077
(80,750)
(6,748)
25
(64,619)
(59,392)
25
(5,988)
(8,808)
25
25
307
(120)
(68)
300
(23,002)
(78,092)
617
5,559
(761)
29,219
4,655
(24,564)
3,894
4,655
(761)
29,219
17,360
33,993
(13,466)
(29,338)
3,894
4,655
Consolidated
Financial Statements
61
Consolidated Statement
of Changes in Equity
Treasury Retained
shares
earnings
Hedging
reserves
Cumulative
translation
adjustments
Total
Non-controlling
interest
Total
equity
in thousands of CHF
As of August 31, 2008
321,574
(13,604)
908,320
(39,149)
1,175,922
392
1,176,314
(86,877)
(86,877)
(6,339)
(53)
(86,930)
(6,339)
(3,773)
(86,877)
(90,650)
(53)
(90,703)
226,907
18
226,925
(3,773)
(86,877)
136,257
(35)
(6,339)
2,566
226,907
226,907
(1,219)
(59,455)
2,566
63
(59,392)
(8,808)
262,119
17,799
(6,222)
(4,613)
1,129,068
251,226
251,226
(64,625)
589
1,256,145
(137,922)
(137,922)
(104)
(138,026)
(3,580)
(3,580)
1,585
1,585
(1,995)
(137,922)
(1,995)
(137,922)
(139,917)
197,494
(3,580)
1,585
(104)
(140,021)
251,226
517
251,743
111,309
413
(64,619)
11,577
1,255,556
(5,988)
232
(8,808)
(126,026)
232
11,577
(4,992)
136,222
(59,392)
(8,808)
2,566
111,722
(64,619)
(120)
(5,988)
(120)
(5,988)
329
(22)
307
307
7,081
(1,365)
5,716
5,716
(3,191)
1,378,913
(6,987)
(263,948)
1,302,281
882
1,303,163
62 Consolidated
Financial Statements
Summary of
Accounting Policies
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised and in any future periods
affected.
In particular, information about significant areas of estimation
uncertainty and critical judgments in applying accounting policies
that have the most significant effect on the amount recognized in the
financial statements are described below:
Note 1
Note 13
Note 14
Note 18
Note 19
Note 24
Scope of consolidation/Subsidiaries
The consolidated financial statements of the Group include all the
assets, liabilities, income and expenses of Barry Callebaut AG and
the companies which it controls. Control is presumed to exist when
a company owns, either directly or indirectly, more than 50% of the
voting rights of a companys share capital or otherwise has the
power to exercise control over the financial and operating policies of
a subsidiary so as to obtain the benefits from its activities. Non-controlling interest are shown as a component of equity in the balance
sheet and the share of the net profit attributable to non-controlling
interest is shown as a component of the net profit for the period in
the Consolidated Income Statement. Newly acquired companies are
consolidated from the date control is transferred (the effective date
of acquisition), using the purchase method. Subsidiaries disposed of
are included up to the effective date of disposal.
All intragroup balances and unrealized gains and losses or
income and expenses arising from intragroup transactions are eliminated in preparing the consolidated financial statements. Unrealized
gains arising from transactions with associates and jointly controlled
entities are eliminated to the extent of the Groups interest in the
entity. Unrealized losses are eliminated in the same way as unrealized
gains, but only to the extent that there is no evidence of impairment.
Purchases and disposals of non-controlling interest in subsidiaries
The Group applies the policy of treating transactions with noncontrolling interest equal to transactions with equity owners of the
Group. For purchases from non-controlling interest, the difference
between consideration paid and the relevant share acquired of the
carrying value of net assets of the subsidiary is recorded in equity.
Gains or losses on disposal to non-controlling interest are also recorded in equity.
Consolidated
Financial Statements
Average rate
Closing rate
2009/10
Average rate
2008/09
EUR
1.2925
1.4482
1.5220
GBP
1.5740
1.6561
1.7285
1.5189
1.7501
USD
1.0210
1.0578
1.0666
1.1250
63
64 Consolidated
Financial Statements
Accounting Policies
Hedge accounting
For manufacturing and selling of their products, the operating companies require commodity raw materials such as cocoa beans and
semi-finished cocoa products as well as non-cocoa components such
as dairy, sweeteners and nuts.The value of the Groups open sales and
purchase commitments and inventory of raw materials changes continuously in line with price movements in the respective commodity
markets. The Group uses commodity futures, forward contracts
and inventory to manage price risks associated with the firm sales
commitments of industrial chocolate (Contract Business see risk
management note 26).
The Group and its subsidiaries enter into sales and purchasing
contracts denominated in various currencies and consequently are
exposed to foreign currency risks, which are hedged by the Groups
treasury department or in case of legal restrictions with local
banks. The Groups interest rate risk is managed with interest rate
derivatives.
Hedge accounting is applied to derivatives that are effective in
offsetting the changes in fair value or cash flows of the hedged items.
The hedge relation is documented and the effectiveness of such
hedges is tested at regular intervals, at least on a semi-annual basis.
Fair value hedging for commodity price risks and foreign currency
exchange risks related to the Contract Business
Generally, fair value hedge accounting is applied to hedge the Groups
exposure to changes in fair value of a recognized asset or liability or
an unrecognized firm commitment or an identified portion of such an
asset, liability or firm commitment, that is attributable to a particular
risk, e.g. commodity price risks, and that could affect profit or loss. For
fair value hedges, the carrying amount of the hedged item is adjusted
for gains and losses attributable to the risk being hedged, the derivative (hedging instrument) is remeasured at fair value and gains and
losses from both are taken to the income statement. When an unrecognized firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment
attributable to the hedged risk is recognized as an asset or liability
with a corresponding gain or loss in the income statement. The changes in the fair value of the hedging instrument are also recognized in
the income statement.
For the chocolate price risk related to the sales contract of industrial chocolate (Contract Business), the firm sales commitments,
including cocoa and non-cocoa components, such as sweeteners, dairy
and nuts, are designated as the hedged items while the forward
purchase commitments and Contract Business inventories related to
cocoa and non-cocoa components as well as cocoa future contracts
are designated as the hedging instruments. The hedging instruments
(purchase side) as well as the hedged items (sales side) are measured
at fair value at the balance sheet date. The components of sales
contracts represent commodities and are quoted in an active market
or are reliably determinable. The fair values thus calculated for the
hedged items are recorded under the position Fair value of hedged
firm commitments included in trade receivables and other current
assets or trade payables and other current liabilities depending on
whether the resulting amount is positive or negative. The fair values
Consolidated
Financial Statements
Inventories
The Group principally acquires cocoa beans, any semi-finished products resulting from cocoa beans (such as cocoa liquor, butter, cake
or powder), other raw materials such as sweeteners, dairy and nuts
and has industrial chocolate inventories with the purpose of selling
them in the near future and generating a profit from fluctuations in
price or broker-traders margin. The Group therefore acts as a broker-trader of such commodities and these inventories are measured
at fair value less costs to sell in accordance to the broker-trader
exemption per IAS 2.5 (Inventories).
Other inventories, such as finished consumer products and other
items related to the Price List Business are stated at the lower of cost
and net realizable value. The cost of inventories comprises the costs
of materials, direct production costs including labor costs and an
appropriate proportion of production overheads and factory depreciation. For movements in inventories, the average cost method is
applied. Net realizable value is defined as the estimated selling price
less costs of completion and direct selling and distribution expenses.
Assets held for sale and liabilities directly associated with
assets held for sale
Long-term assets and related liabilities are classified as held for sale
and shown on the balance sheet in a separate line as Assets held for
sale and Liabilities directly associated with assets held for sale if
the carrying amount is to be realized by selling, rather than using, the
assets. This is conditional upon the sale being highly probable to
occur and the assets being ready for immediate sale. For a sale to be
classified as highly probable, the following criteria must be met:
management is committed to a plan to sell the asset, the asset is marketed for sale at a price that is reasonable in relation with its current
fair value and the completion of the sale is expected to occur within
12 months.
Assets held for sale are measured at the lower of their carrying
amount or the fair value less costs to sell. From the time they are
classified as held for sale, depreciable assets are no longer depreciated or amortized.
Financial assets
Financial assets are accounted for in accordance with IAS 39, Financial Instruments: Recognition and Measurement. Accordingly,
financial assets are classified into the following categories: held-tomaturity, at fair value through profit or loss, loans and receivables and
available-for-sale. Financial assets with fixed or determinable payments and fixed maturity that the Group has the positive intent and
ability to hold to maturity except for loans and receivables originated
by the Group are classified as held-to-maturity investments. Financial
assets acquired principally for the purpose of generating a profit from
short-term fluctuations in price are classified as at fair value through
profit or loss. All other financial assets, excluding loans and receivables, are classified as available-for-sale.
65
66 Consolidated
Financial Statements
Accounting Policies
20 to 50 years
10 to 20 years
3 to 10 years
Consolidated
Financial Statements
67
68 Consolidated
Financial Statements
Accounting Policies
Consolidated
Financial Statements
69
70 Consolidated
Financial Statements
Notes to the
Consolidated Financial Statements
Acquisitions
Name and location of company acquired
Trade & Trade S.A., Spain
Acquired stake
100%
Date of deconsolidation
Disposed stake
Disposals
Name and location of company disposed
none
1. Acquisitions 2009/10
2009/10
Consideration
Cash paid
23,374
16,870
Consideration deferred
Total consideration transferred
15,835
56,079
The deferred payments are contractually due at the first and fifth anniversary of the closing date. Most
of the deferred payment is due short-term. The consideration due on the fifth anniversary of the closing
shall be offset with indemnification claims by the Group. No pre-existing relationships were settled in
this transaction.
The agreements with the seller do not contain arrangements for contingent considerations.
The Group expensed acquisition-related costs, such as fees for due diligence work and lawyers, of
CHF 1.1 million over the course of the project immediately in the Consolidated Income Statement
(included in General and administration expenses), of which CHF 0.7 million was recognized in the prior
fiscal year.
Consolidated
Financial Statements
in thousands of CHF
71
2009/10
2,218
42,031
Inventories
8,684
6,786
Intangible assets
6,291
290
(7,625)
(20,247)
(1,012)
(6,166)
31,250
Goodwill
24,829
56,079
The goodwill of CHF 24.8 million arising from the acquisition is attributable to the skills and technical
talents of Chocovic work force, synergies expected to be achieved from integrating the company into the
Groups existing business and economies of scale expected from combining the operations of the Group
and Chocovic Group. None of the goodwill recognized is expected to be deductible for income tax
purposes.
The fair value of trade receivables and other assets is CHF 42.0 million and includes trade receivables
with a fair value of CHF 18.3 million. The gross contractual amount of trade receivables due is CHF 20.8
million, of which CHF 2.5 million is expected to be uncollectible.
The Group has not yet finished the valuation of the defined benefit obligations as the actuarial valuation
reports were not yet available.
Contingent liabilities of CHF 2.7 million have been recognized for potential outflow of resources embodying economic benefits arising from past events.The liabilities have not been discounted as the settlement
is expected to take place within 12 months.As of August 31, 2010, there has been no change in the amounts
recognized at the acquisition date, as there has been no change in the range of outcomes or assumptions
used to develop the estimates.
The selling shareholders have contractually agreed to indemnify Barry Callebaut for amounts that may
become payable in respect of certain above-mentioned past events. An indemnification asset of CHF 0.8
million, equivalent to the fair value of the indemnified liability, has been recognized by the Group.
The indemnification asset is deducted from consideration transferred for the business combination.
As is the case with the indemnified liability, there has been no change in the amount recognized for
the indemnification asset as at August 31, 2010, as there has been no change in the range of outcomes or
assumptions used to develop the estimate of the liability.
The revenue included in the Consolidated Income Statement since December 23, 2009, contributed by
Chocovic Group, was CHF 42.5 million. Chocovic Group has also contributed profit of CHF 3.1 million
over the same period.
Had Chocovic Group been consolidated from September 1, 2009, it would have contributed revenue of
CHF 72.1 million and net profit for the year of CHF 4.4 million to the Consolidated Income Statement.
The initial accounting for the acquisitions of International Business Company (IBC) and the business
from the Japanese confectionery Morinaga & Co. Ltd in the comparable period which were determined
provisionally, have been completed in the meantime. The finalization of the purchase accounting of the
Eurogran acquisition led to a minor adjustment of CHF 0.5 million from Goodwill to Brand names.
72
Consolidated
Financial Statements
Notes
2008/09
In fiscal year 2008/09, the following acquisitions/business combinations took place:
International Business Company (IBC) BVBA
On October 1, 2008, the Group closed the transaction to acquire 100% of the share capital in IBC, a
Belgian company active in the chocolate decoration market. The company mainly serves customers in
the Groups Gourmet & Specialties business in Europe and was therefore integrated in the Food
Service/Retail Business segment and the geographical Region Europe, respectively. Goodwill resulting
from that transaction has also been allocated to those segments.
Morinaga Tsukaguchi factory
On December 1, 2008, the Group has acquired assets from the Japanese confectionary Morinaga & Co.
Ltd and entered into a long-term supply agreement with Morinaga & Co. Ltd. Due to the substance of
the acquisition agreement entered into with Morinaga, the Group has concluded that the acquisition
qualifies as a business combination in the scope of IFRS 3. The business was subsequently integrated in
the Groups Industrial Business segment and the geographical Region Asia-Pacific since the business
does generate its sales solely in Asia. The accounting for the transaction has led to a negative goodwill
which was immediately recognized in the Consolidated Income Statement.
Eurogran A/S
On June 1, 2009, the Group has closed the acquisition of the Danish beverage company Eurogran A/S
with a subsidiary in United Kingdom. The Danish operations were integrated in the Groups beverage
business. The business acquired serves customers in Europe, consequently it was integrated into the
Groups Food Service/Retail segment and the geographical Region Europe, respectively. Goodwill
resulting from this acquisition was allocated to the same segments as well.
Acquisitions
in thousands of CHF
Pre-acquisition carrying
amounts
2008/09
Fair value
adjustments
2008/09
Recognized
values on
acquisition
2008/09
Inventories
7,010
(985)
9,758
(81)
9,677
16,795
1,209
18,004
6,025
3,731
3,731
(12,331)
(817)
(13,148)
(610)
(1,872)
(2,482)
(6,227)
(57)
(6,284)
14,395
1,128
15,523
Goodwill on acquisition
24,890
(1,502)
(18,742)
20,169
(2,657)
17,512
Consolidated
Financial Statements
73
The goodwill amounting to CHF 24.9 million reflects the value of highly skilled staff, the immediate
access to manufacturing resources, supply chain and profound knowledge of the regional market characteristics. The acquisitions allow the Group to leverage on these factors and use related synergies for
its strategically targeted regional and business expansion path.
The negative goodwill recognized is related to the acquisition of the Tsukaguchi factory and is mainly
the result of differences between the value at which property, plant and equipment were acquired and
their fair value assessed by the Group and reflecting the business plan underlying the acquisition.
The effect of last years acquisitions on the Groups sales were approximately CHF 42 million on net
sales revenue and CHF 5.3 million on net profit from continuing operations. Had the acquisitions occurred
on September 1, 2008, the Groups net sales revenue would have been approximately CHF 4,923 million
and the net profit from continuing operations approximately CHF 229 million.
2. Disposals
Disposals in 2009/10
No subsidiaries were disposed of in 2009/10.
Disposals in 2008/09
Van Houten (Singapore) Pte Ltd
On February 28, 2009, Barry Callebaut has sold its Consumer Products subsidiary Van Houten
(Singapore) Pte Ltd, domiciled in Singapore, to The Hershey Company and has also licensed the
Van Houten brand name and trademarks to Hersheys for use in relation to the sale of consumer
products in Asia-Pacific, the Middle East, and Australia/New Zealand.
The transaction resulted in a total gain of CHF 17.9 million (net of transaction costs).
in thousands of CHF
2009/10
Current assets
3,907
Financial liabilities
(1,308)
Other liabilities
Net assets disposed of
(2,447)
Costs to sell
17,950
17,479
17,198
157
(628)
2008/09
(281)
74
Consolidated
Financial Statements
Notes
3. Segment information
External segment reporting is based on the internal organizational and management structure, as
well as on the internal information reviewed regularly by the Chief Operating Decision Maker. Barry
Callebauts Chief Operating Decision Maker has been identified as the Executive Committee, consisting
of the Group Chief Executive Officer, the Chief Financial Officer and the Presidents of the Regions
Europe, Americas and Global Sourcing & Cocoa as well as the Chief Operating Officer and the Chief
Innovation Officer.
Europe
Americas
in thousands of CHF
2009/10
2008/091
2009/10
2008/091
2009/10
2008/091
962,596
748,899
3,041,943
3,056,318
998,173
901,075
2,138,833
1,944,585
54,772
44,119
3,101,429
2,693,484
3,096,715
3,100,437
998,173
901,075
54,476
52,516
268,762
252,578
92,452
86,282
(20,773)
(20,006)
(55,331)
(58,841)
(15,676)
(14,636)
(237)
(329)
1,538,286
1,426,612
1,443,612
1,520,697
593,921
574,141
(27,349)
(36,330)
(48,997)
(36,892)
(41,706)
(44,120)
The Executive Committee considers the business from a geographic view and, hence, Presidents were
appointed for each region. Since the Groups sourcing and cocoa activities operate independently of
the regions, the Global Sourcing & Cocoa business is reviewed by the Chief Operating Decision Maker
as an own segment in addition to the geographical Regions Western Europe, Eastern Europe, Americas
and Asia-Pacific. For the purpose of the consolidated financial statements, the Regions Western Europe
and Eastern Europe were aggregated since the businesses are similar and meet the criteria for aggregation. Furthermore, the Executive Committee also views the Corporate function independently. The
function Corporate consists mainly of headquarters services to other segments and does not generate
revenues. Thus, the Group reports Corporate as a reconciling item between the segments and the consolidated figures.
Consolidated
Financial Statements
75
The segment Global Sourcing & Cocoa is responsible for the procurement of ingredients for chocolate
production (mainly cocoa; sugar, dairy and nuts are also common ingredients) and the Groups cocoa
processing business. Most of the revenues of Global Sourcing & Cocoa are generated with the other
segments of the Group. The business conducted in the regions consists of chocolate production for
industrial customers, hotel, restaurants and cafeterias (gourmet business) and to a lesser extent,
consumer products.
The revenues generated by Global Sourcing & Cocoa with other segments are conducted on an arms
length basis. For internal purposes, some of its operational profits are allocated to the regions which act
as major customers of Global Sourcing & Cocoa.
Asia-Pacic
Total Segments
Corporate
Eliminations
Group
2009/10
2008/091
2009/10
2008/091
2009/10
2008/091
2009/10
2008/091
2009/10
2008/09
211,067
173,885
5,213,779
4,880,177
5,213,779
4,880,177
2,193,605
1,988,704
(2,193,605)
(1,988,704)
211,067
173,885
7,407,384
6,868,881
(2,193,605)
(1,988,704)
5,213,779
4,880,177
20,908
29,227
436,598
420,603
(66,187)
(69,850)
370,411
350,753
(5,262)
(6,870)
(97,042)
(100,352)
(3,247)
(5,021)
(100,289)
(105,374)
(566)
(566)
114,038
116,077
3,689,857
3,637,527
661,502
626,282
(780,512)
(748,962)
3,570,847
3,514,847
(4,274)
(5,766)
(122,326)
(123,108)
(22,783)
(21,335)
(145,108)
(144,443)
Segment revenue, segment results (operating profit EBIT) and segment assets correspond to the Groups
consolidated financial statements. Financial income and expense, the Groups interest in the profit of
associates and joint ventures accounted by the equity method and income taxes are not allocated to the
respective segment for internal management purposes. These items can be found below in the reconciliation of the EBIT to the net profit for the year.
The following table shows the reconciliation of EBIT to net income for the year as reported in the
Consolidated Income Statement:
Reconciliation of EBIT to net prot for the year
in thousands of CHF
2009/10
2008/09
Operating prot
Financial income
370,411
2,021
350,753
5,904
Financial expense
(83,122)
(97,493)
(225)
484
289,085
259,648
Income taxes
(37,342)
(32,723)
251,743
226,925
76
Consolidated
Financial Statements
Notes
2009/10
Non-current assets
2008/09
2009/10
2008/09
182,207
United States
820,523
713,504
182,103
Germany
741,936
787,426
127,467
159,854
France
499,132
593,822
100,714
115,060
United Kingdom
492,403
508,588
30,120
33,245
Italy
342,025
341,827
24,630
27,198
Belgium
339,749
350,188
269,770
285,996
49,786
52,333
74,546
52,626
Other
Switzerland
1,928,225
1,532,489
534,010
509,956
Total
5,213,779
4,880,177
1,343,360
1,366,142
2009/10
2008/09
962,596
748,901
2,716,509
2,605,608
707,636
619,028
Consumer Products
827,038
906,640
5,213,779
4,880,177
No single external customer accounts for more than 10% of total consolidated revenues.
Consolidated
Konzernrechnung
Financial Statements
77
4. Personnel expenses
in thousands of CHF
2009/10
2008/09
(376,359)
(372,074)
(89,679)
(92,430)
(5,716)
(11,577)
(15,607)
(12,671)
(1,058)
(825)
(36)
(61)
(488,455)
(489,638)
in thousands of CHF
2009/10
2008/09
(16,990)
(19,378)
Research and development costs not qualifying for capitalization are directly charged to the Consolidated Income Statement and are reported under Marketing and sales expenses and General and
administration expenses.
6. Other income
in thousands of CHF
2009/10
2008/09
6,177
1,615
3,799
3,522
3,198
3,285
2,902
1,923
1,678
837
17,950
1,385
2,702
3,840
20,456
34,357
2009/10
2008/09
Restructuring costs
(8,916)
(9,947)
(2,088)
(2,910)
(1,741)
(1,518)
(1,022)
(696)
(25)
(1,585)
Other
Total other income
7. Other expenses
in thousands of CHF
(566)
Other
(2,849)
(3,272)
(16,641)
(20,494)
78
Konzernrechnung
Consolidated
Financial Statements
Notes
8. Financial income
in thousands of CHF
Interest income
Gains on derivative nancial instruments
Total nancial income
2009/10
2008/09
2,021
3,883
2,021
2,021
5,904
In prior year, gains on derivative financial instruments amounted to CHF 2.0 million and, among other,
comprise the fair value change of the free-standing interest rate derivatives for 2008/09.
9. Financial expenses
in thousands of CHF
2009/10
2008/09
(86,223)
Interest expenses
(67,061)
(6,664)
Structuring fees
(1,560)
(1,207)
(1,485)
(1,709)
(76,770)
(89,139)
(4,417)
(5,079)
(1,935)
(3,275)
(83,122)
(97,493)
Interest expenses include the net cost of interest rate swaps and result from paying fixed interest rates
in exchange for receiving floating interest rates. Interest expenses for 2009/10 also include interest paid
under the asset-backed securitization program for trade receivables of an amount of CHF 3.5 million
(2008/09: CHF 3.9 million).
Loss on derivative financial instruments amounted to CHF 6.7 million and, among other, comprise the
fair value change of the free-standing interest rate derivatives for 2009/10.
Structuring fee expenses are mainly attributable to the EUR 850 million Revolving Credit Facility and
the EUR 350 million Senior Bond (see note 23) and represent the related amortization charges.
The charges on the undrawn portion of the committed EUR 850 million Revolving Credit Facility amount
to CHF 1.5 million for 2009/10 (2008/09: CHF 1.7 million).
Konzernrechnung
Consolidated
Financial Statements
79
2009/10
2008/09
(46,801)
(32,312)
9,459
(411)
(37,342)
(32,723)
2009/10
2008/09
289,085
259,648
(48,996)
(49,705)
(3,492)
(3,550)
16,262
17,592
2,355
2,770
(1,392)
(1,684)
(6,458)
1,439
1,014
2,351
(5,221)
(7,929)
8,586
5,993
(37,342)
(32,723)
For the reconciliation as above, the Group determines the expected income tax rate by weighting
the applicable tax rates in the jurisdictions concerned based on the mix of the profit before taxes per
jurisdiction, resulting for 2009/10 in a weighted average applicable tax rate of 16.95% (2008/09 : 19.14%).
The applicable expected tax rate per company is the domestic corporate income tax rate applicable to
the profit before taxes of the company for fiscal year 2009/10.The decrease of the weighted average applicable tax rate is due to the more favorable company mix of the profit before taxes.
The tax relief on tax losses carried forward formerly not recognized as deferred tax assets amounts to
CHF 8.6 million for the year 2009/10. The amount consists of CHF 4.6 million utilization of tax losses
carried forward previously not recognized and CHF 4.0 million tax losses carried forward recognized
as a deferred tax asset for the first time during the year 2009/10.
2009/10
2008/09
48.62
43.99
48.47
43.85
The following amounts of earnings have been used as the numerator in the calculation of basic and
diluted earnings per share:
in thousands of CHF
2009/10
2008/09
251,226
226,907
251,226
226,907
80 Konzernrechnung
Consolidated
Financial Statements
Notes
The following numbers of shares have been used as the denominator in the calculation of basic and
diluted earnings per share:
2009/10
2008/09
5,170,000
5,170,000
2,978
11,981
5,167,022
5,158,019
16,196
16,944
5,183,218
5,174,963
2010
2009
314,636
349,416
98,651
42,534
Prepayments
72,063
28,713
7,915
8,966
Accrued income
4,123
2,760
192
55,990
62,710
34,000
29,556
587,380
524,847
The Group runs an asset-backed securitization program, whereby trade receivables are sold at their
nominal value minus a discount in exchange for cash.The net amount of the sold receivables is CHF 255.1
million as of August 31, 2010 (2009: CHF 262.4 million), and was derecognized from the balance sheet.
Aging of trade receivables
as of August 31,
2010
2009
334,650
372,008
(20,014)
(22,592)
314,636
349,416
269,092
276,232
in thousands of CHF
Of which:
Not overdue
Impairment provision for trade receivables not overdue
Past due less than 90 days
Impairment provision for trade receivables past due less than 90 days
Past due more than 90 days
(144)
(653)
35,427
54,178
(347)
(396)
30,131
41,598
Impairment provision for trade receivables past due more than 90 days
(19,523)
(21,543)
314,636
349,416
The trade receivables are contractually due within a period of one to 120 days.
The individually impaired receivables mainly relate to customers, which are in difficult economic situations.
Consolidated
Konzernrechnung
Financial Statements
81
2009/10
2008/09
22,592
20,514
7,171
7,783
(3,850)
(4,279)
(2,330)
(209)
(3,569)
(1,217)
as of August 31,
20,014
22,592
Based on historic impairment rates and expected performance of the customers payment behavior, the
Group believes that the impairment provision for trade receivables sufficiently covers the risk of default.
Based on an individual assessment on the credit risks related with other receivables, the Group identified no need for an impairment provision. Details on credit risks can be found in note 26.
13. Inventories
as of August 31,
2010
2009
in thousands of CHF
Cocoa bean stocks
369,758
436,754
698,243
722,986
118,230
134,805
1,186,231
1,294,545
351,064
420,179
539,752
555,267
50,998
58,219
941,814
1,033,665
Barry Callebaut applies the broker-trader exemption in accordance with IAS 2.5 for the Contract
Business and therefore measures its Contract Business inventories at fair value less costs to sell. Barry
Callebaut fulfills the requirement of a broker-trader as it holds inventories with the purpose of generating a profit from short-term fluctuations in price or dealers margin. All commodities, including
industrial chocolate, are valued based on the raw material prices at the balance sheet date.
In the Price List Business Barry Callebaut is committed to sell its products at a fixed price over a certain
period of time, i.e. the period of validity of the respective price list. Inventories dedicated to the Price
List Business are therefore measured at the lower of cost or net realizable value.
As of August 31, 2010, inventories amounting to CHF 19.1 million (2009: CHF 5.8 million) are pledged
as security for financial liabilities.
In fiscal year 2009/10, inventory write-downs of CHF 4.8 million were recognized as expenses
(2008/09: CHF 5.5 million).
82
Konzernrechnung
Consolidated
Financial Statements
Notes
Derivative
Derivative
nancial
nancial
liabilities
assets
2010
as of August 31,
Derivative
nancial
liabilities
2009
in thousands of CHF
Cash Flow Hedges
Interest rate risk
7,030
7,731
41,175
13,290
17,782
40,852
23,332
16,149
20,970
15,880
256,285
267,420
162,334
58,528
49,788
63,744
19,298
30,928
3,426
1,265
Swaps
Fair Value Hedges
Sales price risk (Cocoa/other ingredients)
Raw materials
Forward and futures contracts and
other derivatives
Foreign exchange risk
Forward and futures contracts
Interest rate risk
Swaps
Total derivative nancial assets
Total derivative nancial liabilities
370,580
221,649
371,059
153,922
Derivative financial instruments consist of items used in a cash flow hedging model, items used in a fair value
hedging model and fair valued instruments, for which no hedge accounting is applied.
For detailed information on fair value measurement refer to note 26, Fair Value Hierarchy.
Konzernrechnung
Consolidated
Financial Statements
83
in thousands of CHF
as of August 31, 2008
(1,219)
(1,219)
(6,380)
(6,380)
(22)
(22)
2,566
2,566
63
63
(4,992)
(4,992)
(6,465)
(6,465)
1,801
1,801
Taxes
1,585
1,585
1,084
1,084
(6,987)
(6,987)
Cash ow hedges
In the course of fiscal year 2009/10, the Group entered into interest rate derivatives (exchanging floating
into fixed interest rates) according to the guidelines stipulated in the Groups Treasury Policy (refer to
note 26). In order to avoid volatility in the income statement, the interest rate derivatives have been put
in cash flow hedge relationship reflecting the underlying currency mix of the Groups debt portfolio. The
following table provides an overview over the periods in which the cash flow hedges are expected to
impact the Consolidated Income Statement (before taxes):
First
year
Second
to fth
year
After
ve
years
Expect- First
ed cash year
ows
2010
as of August 31,
Second
to fth
year
After
ve
years
Expected cash
ows
2009
in thousands of CHF
Derivative nancial
liabilities
Total net
(3,035)
(4,921)
555
(7,401)
(5,598)
(2,960)
(8,558)
(3,035)
(4,921)
555
(7,401)
(5,598)
(2,960)
(8,558)
84 Consolidated
Financial Statements
Notes
For the fair value hedge relationship of the Contract Business, the Group also considers its related
inventories carried at fair value less costs to sell as hedging instruments. Inventories held in accordance
with the broker-trader exemption have essentially similar characteristics to a derivative financial instrument on commodities and therefore qualify as hedging instrument in accordance with Barry Callebauts
business model in the Contract Business. The amount of fair value adjustments to inventories on August
31, 2010, was CHF -78.1 million (2009: CHF 78.2 million).
All financial derivatives and the hedged items are marked at fair value. For fair value hedges, the
Group recorded a loss on hedging instruments of CHF 92.8 million for fiscal year 2009/10 (2008/09: loss
of CHF 49.0 million) and a gain on hedged items of CHF 92.8 million (2008/09: gain of CHF 49.0 million).
The fair value at balance sheet date of the hedged firm commitments under the fair value hedge accounting model being the related firm sales commitments in respect of sales price risk (including cocoa components and non-cocoa components, such as sweeteners, dairy and nuts) and the related sales and purchase contracts with respect to foreign currency risks is outlined in the table hedged firm commitments
below. The balance of these items at balance sheet date is presented under trade receivables and other
current assets (see note 12) and trade payables and other current liabilities (see note 21), respectively.
Hedged rm commitments
in thousands of CHF
Assets
Liabilities
as of August 31,
Assets
Liabilities
2010
2009
91,406
41,174
40,852
95,979
7,245
581
1,682
5,593
98,651
41,755
42,534
101,572
Consolidated
Financial Statements
85
2009/10
Land and
buildings
Plant and
machinery
Oce
Under
equipment,
construction
furniture and
motor vehicles
Total
in thousands of CHF
At cost
as of August 31, 2009
606,490
1,408,051
144,002
40,546
80
5,595
275
836
6,786
Additions
12,241
50,624
7,517
48,876
119,258
Disposals
(26,520)
(17,188)
(2,441)
(46,149)
(63,213)
(146,098)
(17,327)
(3,733)
(230,371)
2,100
20,720
1,361
(24,181)
189
30
(219)
531,367
1,321,734
133,168
62,344
2,048,613
319,830
888,114
118,687
1,326,631
Depreciation charge
14,973
54,782
8,106
77,861
Disposals
(19,608)
(10,897)
(2,216)
(32,721)
(38,362)
(101,127)
(14,535)
(154,024)
861
(798)
(63)
277,694
830,074
109,979
1,217,747
253,673
491,660
23,189
62,344
830,866
2,199,089
Other reclassications
86 Consolidated
Financial Statements
Notes
2008/09
Land and
buildings
Plant and
machinery
Oce
equipment,
furniture and
motor vehicles
Under
construction
Total
in thousands of CHF
At cost
as of August 31, 2008
621,747
1,338,885
147,117
125,532
2,233,281
1,883
15,972
149
18,004
(67)
(67)
20,589
58,976
7,111
26,638
113,314
(159)
(15,676)
(2,342)
(9)
(18,186)
(43,818)
(87,844)
(9,421)
(6,174)
(147,257)
(105,441)
7,747
97,427
267
(1,499)
311
1,188
606,490
1,408,051
144,002
40,546
2,199,089
324,687
897,975
119,706
1,342,368
(62)
(62)
15,148
59,178
7,983
82,309
559
566
(73)
(13,524)
(2,249)
(15,846)
(19,206)
(56,201)
(7,297)
(82,704)
(726)
127
599
319,830
888,114
118,687
1,326,631
286,660
519,937
25,315
40,546
872,458
As required by the accounting standards, the Group periodically reviews the remaining useful lives of
assets recognized in property, plant and equipment.
There was no impairment loss in property, plant and equipment in fiscal year 2009/10
(2008/09: CHF 0.6 million).
Repair and maintenance expenses for the fiscal year 2009/10 amounted to CHF 65.0 million
(2008/09: CHF 61.9 million).
The fire insurance value of property, plant and equipment amounted to CHF 2,749.8 million as of
August 31, 2010 (2009: CHF 2,866.9 million).
As of August 31, 2010, plant and equipment held under financial leases amounted to CHF 2.9 million
(2009: CHF 0.2 million). The related liabilities are reported under short-term and long-term debt
(see notes 20 and 23).
As of August 31, 2010, no financial liabilities were secured by means of mortgages on properties
(2009: none).
Consolidated
Financial Statements
87
2010
in thousands of CHF
Amounts payable under nance leases
within one year
in the second to fth year inclusive
673
40
637
35
1,027
72
895
68
457
359
2,157
112
1,891
103
(266)
(9)
1,891
103
1,891
103
637
35
1,254
68
The Group entered into finance leasing arrangements for various assets. The weighted average term of
finance leases entered into is 5.8 years (2008/09: 4.7 years). The average effective interest rate was 4.7%
(2008/09: 3.2%). Interest rates are fixed at the contract date. All leases are on a fixed repayment basis
and no arrangement has been entered into for contingent rental payment.
as of August 31,
in thousands of CHF
Land and buildings
Plant and machinery
Furniture, equipment and motor vehicles
Total assets under nancial lease
1,286
936
74
696
172
2,918
246
2009/10
2008/09
4,038
3,528
165
(225)
484
Exchange dierences
(334)
(139)
as of August 31,
3,479
4,038
The Groups investments in associates and joint ventures are attributable to the following companies:
Ownership in %
2009/10
2008/09
as of August 31,
African Organic Produce AG, Switzerland
49
49
49
49
50
50
20
20
20
20
88 Consolidated
Financial Statements
Notes
Summarized financial information in respect of the Groups associates and joint ventures is set out below.
in thousands of CHF
2010
2009
12,584
17,157
6,334
6,291
13,187
16,230
2,943
2,845
2,788
4,373
3,479
4,038
2009/10
2008/09
34,143
33,799
in thousands of CHF
Total revenue
Total prot for the period
(477)
708
(225)
484
Goodwill
Brand
names
Development
costs
Other
Total
At cost
as of August 31, 2009
411,843
38,134
194,960
14,585
24,372
6,749
31,121
23,974
1,876
25,850
659,522
(598)
(598)
(7,079)
(821)
(26,614)
(1,011)
(35,525)
429,136
44,062
191,722
15,450
680,370
26,335
132,899
6,604
165,838
Amortization charge
2,180
19,302
946
22,428
Disposals
(540)
(540)
(38)
(19,002)
(810)
(19,850)
28,477
132,659
6,740
167,876
429,136
15,585
59,063
8,710
512,494
Consolidated
Financial Statements
2008/09
in thousands of CHF
Goodwill
Brand
names
Development
costs
Other
89
Total
At cost
as of August 31, 2008
397,446
36,691
174,211
13,301
621,649
24,796
3,251
28,047
Additions
30,611
518
31,129
Disposals
(61)
(231)
(292)
(10,399)
11
(9,934)
(689)
(21,011)
(1,819)
133
1,686
411,843
38,134
194,960
14,585
659,522
22,671
121,068
6,580
150,319
Amortization charge
3,846
18,769
450
23,065
Disposals
(231)
(231)
(3)
(6,998)
(314)
(7,315)
Other reclassications
(179)
60
119
26,335
132,899
6,604
165,838
411,843
11,799
62,061
7,981
493,684
Additions to development costs amount to CHF 24.0 million in fiscal year 2009/10 (2008/09: CHF 30.6
million). In both years additions mainly included costs related to various projects of internally generated
software. Furthermore, costs related to recipes and innovations of CHF 2.5 million were capitalized as
development costs.
The remaining amortization period for brand names varies between three and five years, for software
between two and five years and for other including patents between four and fourteen years. The
amortization charge is included in the position General and administration expenses in the Consolidated
Income Statement.
Impairment testing for cash-generating units containing goodwill
The carrying amount of goodwill for the Group amounts to CHF 429.1 million (2008/09: CHF 411.8 million). The allocation to the segments is as follows:
as of August 31,
2010
in million of CHF
Global Sourcing & Cocoa
149.5
Western Europe
248.9
Americas
Asia-Pacic
Total
25.2
5.5
429.1
The Group has reorganized its internal reporting to better reflect its organizational structure and the
Companys strategic goal to expand its activities in high-growth countries in order to increase its global
presence. As a result, there have been changes in the composition of cash-generating units (CGU) to
which goodwill has been allocated and hence, to the external segment reporting. Goodwill had to be
reallocated to the newly determined CGUs at which goodwill is monitored for internal management
purposes.
90 Consolidated
Financial Statements
Notes
The goodwill impairment testing was based on the new CGUs and the related assumptions. The testing
for the previous year was not re-performed.The allocation of goodwill had been made in respect of business segments in prior years and was as follows:
as of August 31,
2009
in million of CHF
Cocoa
149.4
Food Manufactures
77.9
128.6
Consumer
55.9
Total
411.8
Goodwill acquired in a business combination is allocated to the respective segment that is expected to
benefit from the synergies of the combination, at acquisition date. The segments represent the lowest
level within the entity at which the goodwill is monitored for internal management purposes. Due to the
Groups fully integrated business in the regions, the segments are identified as the lowest level of identifiable cash inflows. Thus, the impairment test is performed on a segment level.
For the impairment test, the recoverable amount of a CGU is based on its value in use and is compared
to the carrying amount of the corresponding CGU. Future cash flows are discounted using a pre-tax rate
that reflects current market assessments based on the weighted average cost of capital (WACC).
The Group performs its impairment test during the fourth quarter of the fiscal year. This approach was
chosen since the Mid-Term Plan covering the next three fiscal years is updated annually at the beginning
of the fourth quarter. The Mid-Term Plan is based on the assumption that there are no major changes to
the Groups organization. The residual value is calculated from an estimated continuing value, which is
primarily based on the third year of the Mid-Term Plan. The terminal growth rate used for determining
the residual value does not exceed the expected long-term growth rate of the industry.
Key assumptions used for value-in-use calculations
2010
Discount rate
9.5%
1.5%
Western Europe
9.3%
1.0%
Americas
10.7%
0.9%
9.5%
3.8%
Discount rate
Asia-Pacic
2009
10.0%
2.0%
Food Manufactures
Cocoa
9.0%
2.0%
9.0%
2.0%
Consumer
9.0%
2.0%
Based on the impairment tests, no need for recognition of impairment losses in fiscal year 2009/10 has
been identified.
The key sensitivities in the impairment test are the WACC as well as the terminal growth rate.Therefore,
the Group has carried out a sensitivity analysis, containing various scenarios. Taking reasonable possible
changes in key assumptions into account, no impairment losses have been revealed.
Consolidated
Konzernrechnung
Financial Statements
91
Other
assets
Provisions
Other
Tax loss Total
liabilities carryforwards
in thousands of CHF
as of August 31, 2008
(10,247)
(39,153)
(7,930)
111
3,690
34,406
2,540
(8,967)
1,475
(13,123)
4,525
13,139
(411)
Charged to equity
2,566
2,566
Eect of acquisitions
(2,406)
129
(205)
(2,482)
Eect of disposals
(46)
(46)
472
5,024
528
(57)
(866)
(2,142)
2,959
(7,235)
(45,502)
(5,927)
(12,940)
9,710
45,357
(16,537)
9,459
(19,123)
5,032
(7,262)
(6,221)
13,401
(1,035)
5,544
Charged to equity
1,585
1,585
Eect of acquisitions
(1,697)
(110)
1,085
(722)
159
5,722
109
684
(1,877)
(5,942)
(1,145)
(2,044)
(48,739)
(12,149)
1,145
9,468
44,959
(7,360)
The effect of acquisitions for fiscal year 2009/10 is related to the fair value measurement at acquisition
of Chocovic.
Recognized deferred tax assets and liabilities
The recognized deferred tax assets and liabilities, without taking into consideration the offsetting of
balances within the same tax jurisdiction, are attributable to the following:
Assets
Liabilities
Net
as of August 31,
Assets
Liabilities
Net
2010
2009
in thousands of CHF
Inventories
5,077
(7,121)
(2,044)
1,140
(8,375)
(7,235)
(45,502)
(63,083)
(48,739)
17,344
(62,846)
Other assets
intangible assets
7,746
(19,895)
(12,149)
11,699
(17,626)
(5,927)
Provisions
1,176
(31)
1,145
980
(13,920)
(12,940)
Other liabilities
19,690
(10,222)
9,468
18,594
(8,885)
9,710
44,959
44,959
45,357
45,357
Tax assets/(liabilities)
92,992
(100,352)
(7,360)
95,114
(111,652)
(16,537)
Set-o of tax
(41,631)
41,631
(43,196)
43,196
51,361
(58,721)
51,918
(68,455)
92 Konzernrechnung
Consolidated
Financial Statements
Notes
Tax loss carry-forwards excluded from recognition of related deferred tax assets
Tax loss carry-forwards not recognized as deferred tax assets have the following expiry dates:
as of August 31,
2010
2009
in thousands of CHF
Expiry
Within 1 year
189
8,278
After 1 up to 2 years
1,549
After 2 up to 3 years
2,396
After 3 up to 10 years
58,716
56,955
213,353
222,547
Unlimited
After 1 0 years
284,981
340,577
561,184
628,361
Tax losses carried forward are assessed for future recoverability based on business plans and projections
of the related companies. Those are capitalized only if the usage within a medium period is probable.
Tax losses carried forward utilized during the year 2009/10 were CHF 41.7 million (2008/09: CHF 28.5
million). The tax relief hereon amounted to CHF 12.8 million, of which CHF 8.2 million were already
recognized as a deferred tax asset in the year before (2008/09: CHF 8.4 million of which CHF 4.0 million were already recognized as a deferred tax asset in the year before).
As of August 31, 2010, the Group had unutilized tax losses carried forward of approximately CHF 711.5
million (August 31, 2009: CHF 775.0 million) that are available for offset against future taxable income.
Of the total tax losses carried forward, an amount of CHF 150.3 million has been recognized for deferred
taxation purposes resulting in a deferred tax asset of CHF 45.0 million (2008/09: CHF 146.7 million
recognized resulting in a deferred tax asset of CHF 45.4 million).
2010
Fair values
2009
2010
2009
in thousands of CHF
Bank overdrafts
13,466
29,338
13,466
29,338
Commercial Paper
69,570
194,699
69,570
194,699
105,157
27,775
105,157
27,775
552
342
552
342
22
34
22
34
637
35
637
35
175,938
222,885
175,938
222,885
189,404
252,223
189,404
252,223
The decrease in the outstanding amount under the Groups domestic Commercial Paper Program is
partially offset by an increase of the drawn amounts under the Revolving Credit Facility (note 23).
Konzernrechnung
Consolidated
Financial Statements
93
Short-term financial liabilities are mainly denominated in EUR, XAF and BRL as shown in the table
below:
Split per currency
Amount
Interest range
in thousands of CHF
from
as of August 31,
Amount
Interest range
to
from
2010
to
20091
EUR
102,363
0.57%
5.90%
208,227
0.50%
GBP
n/a
n/a
6,213
0.45%
6.00%
1.33%
USD
4,685
0.26%
2.00%
12,543
0.41%
3.26%
BRL
12,518
4.50%
4.50%
n/a
n/a
XAF
63,980
5.00%
6.00%
280
5.00%
6.00%
MYR
2,921
3.62%
4.00%
22,077
2.34%
2.73%
Other
2,937
0.13%
5.50%
2,883
0.13%
6.50%
189,404
0.13%
6.00%
252,223
0.13%
6.50%
2010
2009
Total
1 Certain comparatives have been reclassied to conform with the current periods presentation.
as of August 31,
in thousands of CHF
Split xed/oating interest rate:
Fixed rate
Floating rate
Total bank overdrafts and short-term debt
1,003
529
188,401
251,694
189,404
252,223
2010
20091
460,442
427,371
41,755
101,572
in thousands of CHF
Trade payables
Fair value of hedged rm commitments (note 14)
Related parties
Accrued wages and social security
3,531
2,609
75,854
88,351
19,752
16,366
Accrued expenses
52,586
69,083
3,141
10,868
Deferred income
Liability put option over existing non-controlling interest
31,188
Other payables
81,288
116,220
769,537
832,440
As disclosed in notes 9 and 12, the Group participates in a program where receivables are sold to a financial institution and derecognized from the balance sheet. Amounts payable to the financial institution
amounted as of August 31, 2010 to CHF 22.8 million (2009: CHF 32.9 million), consisting of the
balance of receivables collected before the next roll-over date of CHF 44.2 million (2009: CHF 58.8 million), less discounts on receivables sold of CHF 21.4 million (2009: CHF 25.9 million). These amounts
are included in other payables.
Other payables also consist of outstanding ledger balances with commodity brokers.
The seller of the in 2007/08 acquired stake in Barry Callebaut Malaysia Sdn Bhd (BCM), KL-Kepong
Industrial Holdings Sdn Bhd, has a put option (CHF 31.2 million) exercisable between the second and
the fifth anniversary of the closing of the acquisition of BCM (i.e. April 30, 2008), which, if exercised,
would require Barry Callebaut to purchase the remaining 40% of BCM. The put exercise price is fixed
in USD. The agreement gives Barry Callebaut a call option, exercisable in the identical time frame, to
acquire the remaining 40% of the shares at fair value. The call option has a fair value close to zero.
94 Konzernrechnung
Consolidated
Financial Statements
Notes
22. Provisions
2009/10
Restructuring
Total
in thousands of CHF
Balance as of August 31, 2009
10,467
3,834
6,652
500
775
3,439
4,714
4,435
574
4,666
9,675
(7,920)
(648)
(2,582)
(11,150)
(61)
(165)
(226)
(1,235)
(385)
(927)
(2,547)
6,186
3,985
11,248
21,419
5,846
3,395
6,317
15,558
340
590
4,931
5,861
20,953
of which:
Current
Non-current
2008/09
Restructuring
Total
in thousands of CHF
Balance as of August 31, 2008
525
4,930
4,066
494
494
10,079
1,071
5,039
16,189
Usage
(2,073)
(2,652)
(4,725)
(156)
(156)
(133)
133
(4)
(71)
(295)
(370)
10,467
3,834
6,652
20,953
10,249
3,135
3,367
16,751
218
699
3,285
4,202
Reclassication
Currency translation adjustments
as of August 31, 2009
9,521
of which:
Current
Non-current
Restructuring
During fiscal year 2009/10, CHF 7.9 million of restructuring provisions have been used (2008/09: none).
Litigation & claims
The amount includes provisions for certain litigations and claims that have been set up to cover legal
and administrative proceedings that arise in the ordinary course of business. In managements opinion,
after taking appropriate legal advice, the outcome of these legal claims will not give rise to any significant loss beyond the amounts provided as of August 31, 2010.
Other provisions
Other provisions relate mainly to amounts that have been provided to cover the negative outcome of
onerous contracts.
Consolidated
Konzernrechnung
Financial Statements
95
2010
Fair values
2009
2010
2009
in thousands of CHF
Senior notes
442,394
519,987
461,524
484,412
256,406
207,790
256,406
207,790
(552)
(342)
(552)
(342)
14
790
14
790
1,254
68
1,254
68
699,516
728,293
718,646
692,718
On July 13, 2007, the Group issued a 6% Senior Note with maturity in 2017 for an amount of EUR 350
million. The Senior Note has been issued at a price of 99.005%, and include a coupon step-up clause of
0.25% (limited to 1.00%) per downgraded notch by one or more rating agencies. It ranks completely
pari passu with the Groups EUR 850 million Revolving Credit Facility. The Senior Notes being issued
by Barry Callebaut Services NV are guaranteed by Barry Callebaut AG and certain of its subsidiaries.
On July 12, 2007, the Group amended and restructured the syndicated EUR 850 million Revolving Credit
Facility, leading to a 5-year multi-purpose single tranche facility with two extension options (in 2008 and
2009) to be agreed upon by the participating banks at their sole discretion.The first extension option has
been exercised successfully for 83% of the total amount leading to a prolongation of the maturity date
by one year to 2013, whereas the remaining 17% has been kept at the initial maturity date in 2012.
The Group did refrain from exercising the second extension option in line with the prevailing market
circumstances. The Revolving Credit Facility being issued by Barry Callebaut Services N.V. is guaranteed by Barry Callebaut AG and certain of its subsidiaries.
As a result, the maturity profile of the long-term debt can be summarized as follows:
as of August 31,
2010
2009
in thousands of CHF
2010/11
2011/12
5,013
3,102
3,125
2012/13
247,413
196,833
2013/14
3,303
3,895
349
521,338
443,438
699,516
728,293
The weighted average maturity of the total debt decreased from 4.5 years to 3.5 years. Considering that
the short-term debt is fully covered with the committed Revolving Credit Facility, the average maturity
of the total debt stands at 4.9 years from a liquidity point of view.
96 Konzernrechnung
Consolidated
Financial Statements
Notes
Long-term financial liabilities are to a major extent denominated in EUR and at fixed interest rates.
The part of the long-term debt reported at floating interest rates relates to the drawings on the syndicated facility in EUR and CAD.
Split per currency
Amount
Interest range
as of August 31,
from
in thousands of CHF
Amount
Interest range
to
from
to
2010
2009
EUR
572,151
0,97%
6.14%
520,485
4.00%
6.14%
CAD
115,552
1.10%
1.58%
116,792
1.26%
1.30%
MYR
8,763
3.62%
4.00%
10,871
2.88%
3.85%
USD
n/a
n/a
79,995
0.96%
0.96%
BRL
2,700
4.50%
4.50%
n/a
n/a
350
4.00%
6.80%
150
5.00%
7.00%
699,516
0.97%
6.80%
728,293
0.96%
7.00%
Other
Total long-term debt
as of August 31,
2010
2009
Fixed rate
447,148
522,842
Floating rate
252,368
205,451
699,516
728,293
in thousands of CHF
Split xed/oating interest rate:
as of August 31,
Other long-term
Dened benet pension
plans employment benet plans
2010
2009
2010
2009
in thousands of CHF
Present value of funded obligations
229,610
202,666
(144,177)
(151,719)
85,433
50,947
66,538
69,089
19,325
19,988
(65,136)
(17,790)
(1,231)
106
86,835
102,246
18,094
20,094
(185)
(361)
87,020
102,607
18,094
20,094
Consolidated
Konzernrechnung
Financial Statements
97
The changes in the present value of the defined benefit obligations are as follows:
in thousands of CHF
271,757
279,363
19,987
21,186
8,820
9,404
788
883
368
488
Interest cost
14,972
15,267
736
626
42,978
514
3,074
884
(756)
(10)
(170)
(25,016)
(16,318)
(2,992)
(1,174)
Benets paid
(16,975)
(16,961)
(2,258)
(2,248)
296,148
271,757
19,325
19,987
229,610
202,666
66,538
69,089
19,325
19,987
in thousands of CHF
Opening fair value of plan assets
Expected return
Actuarial gains (losses)
167,121
8,447
10,025
(6,527)
(18,191)
Contributions by employer
6,911
7,214
Contributions by employees
3,261
3,232
(9,094)
(7,597)
Benets paid
(10,540)
(10,085)
144,177
151,719
2010
2009
66,510
in thousands of CHF
Equities
53,021
Bonds
25,883
18,957
65,273
66,252
144,177
151,719
The plan assets do not include ordinary shares issued by the Company nor any property occupied by the
Group or one of its affiliates.
98 Konzernrechnung
Consolidated
Financial Statements
Notes
in thousands of CHF
8,820
9,404
788
883
Interest on obligation
14,972
15,267
736
626
(8,447)
(10,025)
576
(740)
1,821
170
368
488
(756)
(10)
(170)
(3,261)
(3,232)
12,272
11,162
3,335
1,509
1,918
(8,167)
The service cost for 2010/11 are expected to amount to CHF 8.3 million. The expected return on plan
assets is based on market expectations and composition of plan assets.
in thousands of CHF
2009/10
1,058
2008/09
825
The defined benefit expenses are recognized in the following line items in the Consolidated Income
Statement:
in thousands of CHF
2009/10
2008/09
(7,380)
(6,302)
(1,255)
(594)
(5,494)
(4,130)
(389)
(310)
Other income
Other expenses
Total dened benet expenses recognized in income statement
(8)
697
(1,081)
(2,032)
(15,607)
(12,671)
in %
Other long-term
employee benet plans
2009/10
2008/09
Discount rate
4.1%
6.2%
4.0%
5.7%
5.9%
1.1%
0.7%
2.1%
1.5%
5.0%
5.0%
6.0%
Consolidated
Konzernrechnung
Financial Statements
99
2009/10
2008/09
2007/08
2006/07
315,473
291,744
300,549
323,740
(144,177)
(151,719)
(167,121)
(182,024)
171,296
140,025
133,428
141,716
(17,719)
(9,427)
6,573
5,151
(6,529)
(18,191)
(15,018)
(338)
The significant increase of the funding deficit of the defined benefit plans has significantly been influenced
by the sharp decrease of the discount rates used to determine the present value of the defined benefit obligations.The long-term interest rates for the local currencies in which the defined benefit plans are expressed
were at a historically low level on the closing date of the fiscal year 2009/10 and have recovered significantly afterwards. Therefore, the funding deficit as per August 31, 2010 and the movement in comparison to
prior year 2008/09 should be interpreted with the necessary prudence.
B. Equity compensation benets
Employee Stock Ownership Program
Shares are granted to participants according to individual contracts and the current Employee Stock
Ownership Program. The Nomination & Compensation Committee determines the number and price
of shares granted at its discretion. In the past, the price for the granted shares has been zero. The shares
granted are entitled to full shareholders rights upon vesting. The vesting periods are ranging between
one and three years. In case of resignation or dismissal, the initially granted but not yet vested shares
become forfeited. The Group currently uses treasury shares for this program.
The fair value of the shares granted is measured at the market price at grant date. 15,260 shares were
granted in fiscal year 2009/10 (15,007 shares in 2008/09). The fair value of the shares at grant date is
recognized over the vesting period as a personnel expense. For 2009/10 the amount recognized (before
taxes) was CHF 5.7 million with a corresponding increase in equity (2008/09: CHF 11.6 million). The
average fair value for the shares granted during the fiscal year 2009/10 amounted to CHF 581
(2008/09: CHF 518).
25. Equity
Share capital
as of August 31,
2010
2009
2008
197,494
262,119
321,574
in thousands of CHF
Share capital is represented by 5,170,000 authorized
and issued shares of each CHF 38.20 fully paid in
(in 2009: 50.70; in 2008: 62.20)
The issued share capital is divided into 5,170,000 registered shares with a nominal value of CHF 38.20
each (CHF 50.70 as of August 31, 2009). All of the issued shares are fully paid and validly issued and are
not subject to calls for additional payments of any kind.
Instead of a dividend, the Annual General Meeting held on December 8, 2009, resolved a share capital
reduction and repayment of CHF 12.50 per share resulting in a total share capital reduction of
CHF 64.6 million (December 2008: capital reduction and repayment of CHF 11.50 per share resulting in
a total share capital reduction of CHF 59.5 million).The respective repayment took place in March 2010.
The Company has one class of shares, which carries no right to a fixed dividend.
100 Consolidated
Konzernrechnung
Financial Statements
Notes
Treasury shares are valued at weighted average cost and, in accordance with IFRS, have been deducted
from equity. The fair value of the treasury shares as of August 31, 2010, amounted to CHF 3.3 million
(2009: CHF 4.0 million).
As of August 31, 2010, the number of outstanding shares amounted to 5,165,239 (2009: 5,163,068)
and the number of treasury shares to 4,761 (2009: 6,932). During this fiscal year, 9,174 shares have been
purchased, 10,845 transferred to employees under the Employee Stock Ownership Program and 500 sold
(2008/09: 14,212 purchased and 23,734 transferred). In prior year, no treasury shares have been sold.
Retained earnings
As of August 31, 2010, retained earnings contain legal reserves of CHF 42.7 million (2009: CHF 57.0 million), which are not distributable to the shareholders pursuant to Swiss law.
Hedging reserves comprise the effective portion of the cumulative net change in the fair value of cash
flow hedging instruments related to hedged transactions that have not yet occurred.
Cumulative translation adjustments comprise all foreign currency differences arising from the translation
of the financial statements of foreign operations.
Movements of non-controlling interest
in thousands of CHF
as of September 1,
Non-controlling share of prots / (losses)
2009/10
2008/09
589
392
517
18
300
SIC Cacaos SA
(120)
(68)
(104)
(53)
882
589
as of August 31,
The Groups overall strategy for managing these risks is consistent with the Groups objectives to maintain cost leadership, reduce earnings volatility in a cost-effective manner and minimize potential adverse
effects of such market exposures on the financial performance of the Group. The Groups risk management continuously monitors the entities exposures to commodity price risk, interest rate risk and
foreign currency risk as well as the use of derivative instruments.
The Group manages its business based on the following two business models:
Contract Business: Sales contracts for industrial, gourmet or consumer chocolate, where Barry
Callebaut has entered into contracts with customers to deliver fixed quantities at fixed prices.These contractually fixed prices are generally based on the forward market prices of the raw material components
valid at the contract date for the forward delivery date, at which the chocolate is planned to be delivered
to the customers.
Price List Business: Barry Callebaut sets price lists for certain gourmet and consumer products.These
price lists are normally updated at intervals of six to twelve months. Customers buy products based on
the issued price lists without fixed commitments on quantities.
Consolidated
Konzernrechnung
Financial Statements
The value of the Groups open sales and purchase commitments and inventory of raw materials changes
continuously in line with price movements in the respective commodity markets.
The Groups policy is to hedge its chocolate price risk which consists of the price risk of cocoa and other
commodities such as milk, sugar and nuts for open sales contracts of industrial chocolate (Contract Business). It uses commodity futures, commodity forward contracts and inventories to manage price risks
associated with firm sales commitments of industrial chocolate (Contract Business). The related account-ing treatment is explained in the section Summary of Accounting Policies under the caption Derivative financial instruments and hedging activities.
The Group Commodity Risk Committee (GCRC) is a committee consisting of key risk management
stakeholders of the Group who meet on a regular basis (at least every six weeks) to discuss Group
Commodity Risk Management issues. The GCRC monitors the Groups Commodity Risk Management
acti-vities and acts as the decision-taking body for the Group in this respect. The members of the GCRC
include the Groups Chief Executive Officer (CEO), the Groups Chief Financial Officer (CFO)
acting as Chairman of the committee the President of Global Sourcing & Cocoa and the Groups Head
of Risk Management (GRM).
The GCRC reports via the GRM to the Groups Audit, Finance, Risk, Quality & Compliance
Committee (AFRQCC) and must inform the latter about key Group Commodity Risk issues and the
key mitigation decisions taken. The AFRQCC reviews and approves GCRC requests and makes sure
that the commodity risk management strategy is consistent with the Groups objectives. It also sets the
Groups Value at Risk (VaR) limit. The AFRQCC makes recommendations to the Board of Directors if
deemed necessary and advises the Board of Directors on important risk matters and/or asks for approval.
In order to quantify and manage the Groups consolidated exposure to commodity price risks, the
concept of historical VaR is applied. The VaR concept serves as the analytical instrument for assessing
the Groups commodity price risk incurred under normal market conditions. The VaR indicates the loss
which, within a time horizon of 10 days for raw materials, will not be exceeded at a confidence level of
95% using 7 years of historical market prices for each major raw material component. The VaR is complemented through the calculation of the expected shortfall and worst cases as well as the use of stress
test scenarios. However, liquidity and credit risks are not included in the calculation and the VaR is based
on a static portfolio during the time horizon of the analysis. The GCRC breaks down the Group VaR
limit into a VaR limit for the Sourcing unit as well as limits in metric tonnes for the other risk reporting
units. The Board of Directors is the highest approval authority for all Group Commodity Risk Management (GCRM) matters and approves the GCRM Policy as well as the Group VaR limit.
The VaR framework of the Group is based on the standard historical VaR methodology; taking 2,000
days (equivalent to 7 years) of the most recent prices, based on which the day-to-day relative price changes
are calculated. This simulation of past market conditions is not predicting the future movement in
commodity prices. Therefore, it does not represent actual losses. It only represents an indication of
the future commodity price risks. As of August 31, 2010, the Group had a VaR of CHF 10.8 million
(2009: CHF 8.2 million) well within the Group limit. The nominal exposure to commodity price risks is
shown under contractual maturities.
101
102 Konzernrechnung
Consolidated
Financial Statements
Notes
All risks related to foreign currency exposures of assets and liabilities, certain unrecognized firm
commitments and highly probable forecasted purchases and sales are centralized within the Groups
In-house Bank, where the hedging strategies are defined.
Accordingly, the consolidated currency exposures are hedged in compliance with the Groups Treasury
Policy, mainly by means of forward currency contracts entered into with high credit quality financial
institutions. The Groups Treasury Policy imposes a dual risk control framework of both open position
limits and near-time fair valuation of the net currency exposures. Both levels of control are substantially
interlinked, avoiding excessive net currency exposures and substantial volatility in the income statement.
The Groups Treasury department is supervised by the Group Finance Committee, which meets at least
on a monthly basis, to discuss Group Treasury risk management issues. The Group Finance Committee
monitors the Groups foreign currency risk position and acts as a decision-taking body for the Group
in this respect. The Group Finance Committee consists of the Groups CFO, the Groups Head of Risk
Management, the Groups Head of Treasury, Tax, Insurance and Legal and other Group Finance stakeholders.
The Groups Treasury Policy giving guidance on treasury risk management including foreign currency
and interest rate risks is approved and annually reviewed by the AFRQCC. The Groups Risk Management department reviews the consistency of the Groups treasury management strategy with the Groups
Treasury Policy and reports the status to the Groups CFO periodically. The AFRQCC is informed by
the CFO about the status and important matters in their quarterly meetings and approves requests of
the Groups Finance Committee on important treasury risk matters including foreign currency risks for
recommendation to the Board of Directors. The Board of Directors is the highest approval authority for
all Group Treasury Risk Management matters.
The table below provides an overview of the net exposure of EUR, GBP and USD against each
functional currency in the Group. According to the Groups Treasury Policy, foreign exchange exposures
are hedged as from identification on an intra-day basis in line with the approved exposure limits. In case
of deviation from the agreed foreign exchange exposure limits, approval has to be sought from the
Groups Finance Committee. Companies with the same functional currency are shown in one group.
Net foreign currency exposures
as of August 31,
Net exposure in thousands of
2010
EUR
GBP
USD
2009
EUR
GBP
USD
Functional currency
EUR
CHF
(533)
(1,524)
(446)
(486)
309
CAD
USD
(1,007)
(12,005)
6,340
(145)
1,094
(97)
5
1,936
(472)
BRL
1,266
(328)
SGD
154
(229)
CNY
(613)
MYR
(310)
RUB
699
Total
(752)
(390)
(2,400)
(681)
(577)
562
(117)
(1,346)
(104)
(182)
(2,374)
99
(1,317)
53
(2,362)
(13,467)
6,603
Konzernrechnung
Consolidated
Financial Statements
103
In order to quantify and manage the Groups consolidated exposure to foreign currency risks, the concept of historical VaR has been implemented for 2009/10. The VaR concept serves as the analytical
instrument for assessing the Groups foreign currency risk incurred under normal market conditions.
The VaR indicates the loss, which, within a time horizon of 1 day, will not be exceeded at a confidence
level of 95% using 7 years of historical market prices for each major currency pair. The VaR is complemented with the calculation of the expected shortfall and worst cases. The VaR is based on static exposures during the time horizon of the analysis. The simulation of past market conditions is not predicting
the future movement in foreign currency rates. Therefore, it does not represent actual losses. It only
represents an indication of future foreign currency risks. As of August 31, 2010, the Group had a VaR
of CHF 0.1 million (2009: CHF 0.3 million).
as of August 31,
2010
2009
97
333
CHF
17
196
EUR
83
143
USD
24
78
GBP
26
158
Others
Diversication Eect
37
91
48%
50%
It is the Groups policy to manage its interest cost using an optimal mix of fixed and floating rate debt.
This optimal mix is primarily determined by the level of the Groups interest cover ratio and is achieved
by entering into interest rate derivative instruments, in which it exchanges fixed and floating interest
rates.
As described in the caption Foreign currency risks, the Groups Finance Committee, which meets on
a monthly basis, monitors the Groups interest risk positions and acts as a decision-taking body for the
Group in this respect.
The Groups Treasury Policy also covers the management of interest rate risks. As for foreign currency
risks, the Groups Risk Management department supervises the compliance of the treasury interest rate
risk management strategy with the Groups Treasury Policy and reports the status periodically to the
Groups CFO, who informs the AFRQCC in their quarterly meetings. The AFRQCC approves requests
from the Group Finance Committee on important treasury matters including interest rate risks and
provides recommendations thereon to the Board of Directors, which is the highest approval authority
for all Group treasury matters.
104 Konzernrechnung
Consolidated
Financial Statements
Notes
The following schedule provides an overview of all interest-bearing items per year-end closing.
as of August 31,
2010
2009
in thousands of CHF
Fixed interest bearing items
Carrying amount of nancial liabilities
448,151
523,371
245,572
310,939
693,723
834,310
(18,110)
(37,862)
440,769
457,145
(245,572)
(310,939)
177,087
108,344
2010
Income statement
Equity
100 BP
increase
100 BP
increase
25 BP
decrease
25 BP
decrease
2009
Income statement
Equity
100 BP
increase
100 BP
increase
25 BP
decrease
25 BP
decrease
Floating rate
bearing items
(3,076)
769
(3,145)
786
2,366
(608)
8,039
(2,123)
1,834
(478)
4,646
(1,202)
(710)
161
8,039
(2,123)
(1,311)
308
4,646
(1,202)
The extent of the Groups credit risk exposure is represented by the aggregate balance of amounts receivable, reduced by the effects of netting arrangements, if any, with counterparties. The maximum nominal
credit risk exposure in the event all other parties fail to perform their obligation was CHF 750.4 million
as of August 31, 2010 (2009: CHF 649.3 million). The Group has insured certain credit risks through a
credit insurance policy. Selected number of customers with significant outstanding amounts are covered
by that policy.
Konzernrechnung
Consolidated
Financial Statements
105
Liquidity risk
Liquidity risk arises through a surplus of financial obligations over available financial assets due at any
point in time. The Groups liquidity is ensured by means of regular Group-wide monitoring and planning of liquidity coordinated by the In-house Bank. For extraordinary financing needs, adequate credit
lines with financial institutions have been arranged (see note 23).
Contractual maturities
The table below provides an overview of contractual maturities for financial liabilities and derivatives.
as of August 31, 2010
In the second to
the fth year
After ve years
Contractual
amount
in thousands of CHF
Non derivative nancial liabilities
Bank overdrafts
(13,466)
(13,466)
Short-term debt
(175,938)
(175,938)
Trade payables
(463,973)
Long-term debt
(30,646)
Other liabilities
(240,916)
(463,973)
(372,780)
(504,730)
(908,156)
(240,916)
Derivatives
Interest rate derivatives
(4,883)
(6,887)
555
(11,215)
Currency derivatives
Inow
Outow
5,620,356
56,847
5,677,203
(5,630,801)
(57,511)
(5,688,312)
Commodity derivatives
Inow
Outow
Total net
1,372,061
12,440
1,384,501
(1,346,632)
(1,389)
(1,348,021)
(914,838)
(369,280)
In the second to
the fth year
(504,175)
After ve years
(1,788,293)
Contractual
amount
in thousands of CHF
Non derivative nancial liabilities
Bank overdrafts
(29,338)
(29,338)
Short-term debt
(222,885)
(222,885)
Trade payables
(429,980)
Long-term debt
(33,650)
Other liabilities
(260,848)
(429,980)
(342,030)
(626,272)
(1,001,952)
(260,848)
Derivatives
Interest rate derivatives
(6,322)
(1,923)
(8,245)
Currency derivatives
Inow
Outow
3,603,658
24,660
3,628,318
(3,609,846)
(24,829)
(3,634,675)
Commodity derivatives
Inow
Outow
Total net
1,075,900
212,750
1,288,650
(1,244,561)
(122,193)
(1,366,754)
(1,157,872)
(253,565)
(626,272)
(2,037,709)
106 Consolidated
Financial Statements
Notes
Loans and
receivables
Fair value
through prot
and loss
trading1
Financial
liabilities at
amortized
cost
Available
for sale
Derivatives
used
in hedging
Total
carrying
amount
Fair value
in thousands of CHF
Cash equivalents
17,360
17,360
750
750
750
314,638
314,638
314,638
370,580
370,580
Short-term deposits
Trade receivables
Derivative nancial assets
306,073
Other assets
46,650
Total Assets
379,398
64,507
432
306,073
432
64,507
17,360
47,082
47,082
750,410
750,410
Bank overdrafts
13,466
13,466
13,466
Short-term debt
175,938
175,938
175,938
463,973
463,973
Trade payables
463,973
334,590
Long-term debt
36,469
699,516
Other liabilities
240,916
Total Liabilities
334,590
1,593,809
36,469
371,059
371,059
699,516
718,646
240,916
240,916
1,964,868
1,983,998
1 The category Fair value through prot and loss trading mainly includes derivatives held in subsidiaries with the broker/trader status
and does not mean that they are held for trading.
Loans and
receivables
Fair value
through prot
and loss
trading1
Financial
liabilities at
amortized
cost
Available
for sale
Derivatives
used
in hedging
Total
carrying
amount
Fair value
in thousands of CHF
Cash equivalents
Short-term deposits
Trade receivables
33,993
33,993
2,137
2,137
2,137
349,608
349,608
349,608
221,649
221,649
182,897
Other assets2
41,440
Total Assets
427,178
38,752
512
182,897
512
38,752
33,993
41,952
41,952
649,339
649,339
Bank overdrafts
29,338
29,338
29,338
Short-term debt
222,885
222,885
222,885
429,980
429,980
Trade payables
Derivative nancial liabilities
429,980
89,459
Long-term debt
728,293
Other liabilities2
Total Liabilities
64,463
260,848
89,459
1,671,344
64,463
1 The category Fair value through prot and loss trading mainly includes derivatives held in subsidiaries with the broker/trader status
and does not mean that they are held for trading.
2 Certain comparatives have been reclassied to conform with the current periods presentation.
153,922
153,922
728,293
692,718
260,848
260,848
1,825,266
1,789,691
Consolidated
Financial Statements
107
Level 1: The fair value is based on unadjusted, quoted prices in active markets which gives the best possible objective indication for the fair value of a financial asset or liability.The assets and liabilities included
in this fair value hierarchy mainly consist of commodity futures.
Level 2: The estimation of the fair value is based on the results of a valuation model.The valuation model
for commodity derivatives includes quoted prices in active markets, recent arms length transactions or
dealer and supplier quotes adjusted for the specific characteristics of the underlying commodities such
as the cost of carry, differentials for the properties and conversion yields. Corroborated market data is
used for the valuation of foreign exchange and interest rate derivatives.
Level 3: The valuation models used are based on parameters and assumptions not observable on the
market.
The following table summarizes the use of level with regard to financial assets and liabilities:
as of August 31, 2010
Level 1
Level 2
Level 3
Total
in thousands of CHF
Derivative nancial assets
Derivative nancial liabilities
13,100
357,480
370,580
3,383
367,676
371,059
There have been no transfers between the levels during the fiscal year 2009/2010.
108 Consolidated
Financial Statements
Notes
Capital management
It is the Groups policy to maintain a sound capital base to support the continued development of
the business. The Board of Directors seeks to maintain a prudent balance between debt and equity. In
compliance with bank covenants, the minimal target solvency ratio (equity in % of total assets, adjusted
for derivative financial instruments on a netted basis) is set at 20%.
The target payout ratio to shareholders currently amounts to approximately 30% of the net profit for the
year in the form of a share capital reduction and repayment or dividend. The target ratio and the form of
the payout recommended by the Board are reviewed on an annual basis and are subject to the decision
of the Annual General Meeting of Shareholders.
The Groups subsidiaries have complied with applicable local statutory capital requirements.
2010
2009
50.11%
50.21%
Renata Jacobs
8.48%
8.48%
6.14%
6.14%
Nathalie Jacobs
3.07%
3.07%
Significant transactions and balances between the Group and related parties are as follows:
in thousands of CHF
Nature of cost/revenue
2009/10
2008/09
173
476
173
476
(11,424)
(9,554)
(11,424)
(9,554)
(7,692)
(8,746)
Jacobs Holding AG
Management services
(1,650)
(1,678)
Adecco Group
(5,940)
(6,886)
Management services
(13)
Management services
(67)
Other
Trade receivables from related parties
(102)
(102)
192
Jacobs Holding AG
Adecco Group
186
3,531
2,609
310
316
Adecco Group
1,282
1,144
1,882
1,097
33
57
19
Transactions with related parties were carried out on commercial terms and conditions at market prices.
All receivables from related parties are non-interest bearing and their collection is expected within the
next twelve months.
Consolidated
Financial Statements
109
2009/10
2008/09
8.2
7.1
Post-employment benets
1.5
0.6
Share-based payments
Total
4.2
8.5
13.9
16.2
Further details related to the requirements of the Swiss Transparency law (Art. 663bbis and 663c Swiss
Code of Obligations) are disclosed in note 6 in the Financial Statements of Barry Callebaut AG.
2010
2009
in thousands of CHF
Property, plant and equipment
1,047
153
Intangible assets
2,747
964
3,794
1,117
The future aggregate minimum lease payments under non-cancellable operating leases are due as
follows:
as of August 31,
2010
2009
in thousands of CHF
In the rst year
13,697
14,173
37,096
37,237
After ve years
28,517
33,989
79,310
85,399
2009/10
2008/09
14,274
13,921
in thousands of CHF
Lease expenditure charged to the income statement
110 Consolidated
Financial Statements
Notes
Contingencies
Group companies are involved in various legal actions and claims as they arise in the ordinary course of
the business. Provisions have been made, where quantifiable, for probable outflows. In the opinion of
the management, after taking appropriate legal advice, the future settlements of such actions and claims
will not have a material effect on the Groups financial position.
Belgium
Subsidiary
Ownership in %
Currency
Capital
100
CHF
2,000,000
100
CHF
4,600,000
Chocolat Alprose SA
100
CHF
7,000,000
100
EUR
615,000,000
62,700,000
100
EUR
100
EUR
65,000
Pierre Iserentant SA
100
EUR
260,908
Brazil
Cameroon
Canada
China
Cte dIvoire
Denmark
100
DKK
125,000
Eurogran A/S
100
DKK
3,000,000
Ecuador
100
USD
50,000
France
100
EUR
6,637,540
100
EUR
50,000,000
100
EUR
2,000,000
100
EUR
51,129
100
EUR
15,338,756
Germany
100
BRL
26,114,993
78.35
XAF
1,147,500,000
100
XAF
10,000,000
100
CAD
2,000,000
100
USD
27,000,000
100
USD
2,000,000
100
XAF
25,695,651,316
100
XAF
3,700,000,000
100
CZK
200,000
100
EUR
72,092,155
100
EUR
99,975,000
Stollwerck GmbH
100
EUR
20,500,000
100
EUR
7,184,000
100
EUR
25,000
100
EUR
1,600,000
Ghana
100
USD
9,204,219
Great Britain
100
GBP
15,467,852
100
GBP
3,200,000
100
GBP
40,000
Hong Kong
100
HKD
India
100
INR
10,000,000
100
EUR
104,000
100
EUR
2,646,841
Dolphin Srl.
100
EUR
110,000
100
JPY
1,260,000,000
60
MYR
36,000,000
60
MYR
2,000,000
100
MXN
117,196,530
100
MXN
50,000
100
MXN
13,027,200
Italy
Japan
Malaysia
Mexico
Consolidated
Financial Statements
Country
Poland
Subsidiary
111
Ownership in %
Currency
Capital
10,000,000
100
PLN
100
PLN
50,000
Russia
100
RUB
1,046,463,481
100
RUB
685,000,000
Singapore
100
SGD
83,856,669
Spain
100
EUR
25,000
80
EUR
300,000
Chocovic S.A.
100
EUR
987,600
100
SEK
100,000
Eurogran Nordic AB
100
SEK
100,000
100
EUR
21,435,000
18,242
Luijckx B.V.
100
EUR
Hoogenboom Benelux BV
100
EUR
18,152
70
EUR
22,689
40,000
100
TRL
USA
100
USD
7,663
100
USD
100,001,000
100
USD
100,190,211
Barry Callebaut has some dormant companies which are not enclosed as principal subsidiaries, for example Barry Callebaut Belgium Consumer NV,
Van Houten Service AG, Barry Callebaut Holding (UK) Ltd, Adis Holding Inc., Barry Callebaut USA Holding, Inc., Omnigest SAS, Alliance Cacao SA
112 Consolidated
Financial Statements
Notes
The results of the Group ERM are presented to the AFRQCC quarterly or immediately in the event of
an emergency individual risk issue.
Financial risk management is described in more detail in note 26.
The Consolidated Financial Statements were authorized for issue by the Board of Directors on
November 2, 2010, and are subject to approval by the Annual General Meeting of Shareholders
on December 7, 2010.
Konzernrechnung
Report
of the Statutory Auditor
KPMG AG
Audit
Badenerstrasse 172
CH-8004 Zurich
P.O. Box
CH-8026 Zurich
Report of the Statutory Auditor on the Consolidated Financial Statements to the General Meeting
of Shareholders of
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the consolidated financial statements. The procedures selected depend on the auditors judgment,
including the assessment of the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error. In making those risk assessments, the auditor considers the internal
control system relevant to the entitys preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entitys internal control system. An audit
also includes evaluating the appropriateness of the accounting policies used and the reasonableness of
accounting estimates made, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Opinion
In our opinion, the consolidated financial statements for the year ended August 31, 2010 give a true and
fair view of the financial position, the results of operations and the cash flows in accordance with International Financial Reporting Standards (IFRS) and comply with Swiss law.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act
(AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances
incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that
an internal control system exists, which has been designed for the preparation of consolidated financial
statements according to the instructions of the board of directors.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG AG
Roger Neininger
Licensed Audit Expert
Auditor in Charge
Marc Ziegler
Licensed Audit Expert
113
114 5-Year
Konzernrechnung
Overview
5-Year Overview
CAGR(%)14
2009/10
2008/09
2007/08
2006/07
2005/0615
Tonnes
7.5%
1,305,280
1,213,610
1,166,007
1,059,200
976,661
Sales revenue
CHF m
8.9%
5,213.8
4,880.2
4,815.4
4,106.8
3,713.2
EBITDA1
CHF m
4.6%
470.7
456.1
443.7
427.1
392.5
CHF m
5.9%
370.4
350.8
341.1
324.0
295.0
189.7
CHF m
7.3%
251.7
226.9
209.1
207.0
CHF m
8.2%
251.7
226.9
205.5
124.1
183.5
Cash ow 3
CHF m
7.1%
457.8
418.1
434.3
406.8
347.9
7.1%
7.2%
7.1%
7.9%
7.9%
CHF
(1.5%)
283.8
289.1
292.5
305.9
302.0
Total assets
CHF m
6.2%
3,570.8
3,514.8
3,729.5
3,186.7
2,811.8
CHF m
1.2%
964.9
1,010.1
1,037.1
883.9
920.9
Non-current assets
CHF m
4.4%
1,405.8
1,432.2
1,423.7
1,211.3
1,184.9
Net debt
CHF m
(1.0%)
870.8
942.7
1,041.2
930.2
906.9
Shareholders equity5
CHF m
6.8%
1,302.3
1,255.6
1,175.9
1,059.1
999.2
Capital expenditure6
CHF m
6.1%
145.1
144.4
249.9
153.1
114.7
CHF m
8.8%
EBIT/sales revenue
EBIT per tonne
Balance Sheet
Ratios
Economic Value Added (EVA)
147.7
129.9
126.3
122.9
105.4
14.8%
13.9%
14.0%
14.3%
13.7%
19.6%
18.1%
17.7%
19.5%
19.0%
66.9%
75.1%
88.5%
87.8%
90.8%
35.5%
36.5%
35.7%
31.5%
33.2%
2.3%
5.8
5.0
4.8
5.1
5.3
(4.7%)
1.9
2.1
2.3
2.2
2.3
2.8%
3.0%
5.2%
3.7%
3.1%
548
Shares
Share price at scal year-end
CHF
6.4%
703
574
724
873
CHF
5.8%
71.6
67.8
66.0
62.7
57.1
CHF
7.3%
48.6
44.0
40.4
40.2
36.7
CHF
7.3%
88.6
81.1
83.9
78.6
66.9
CHF
7.5%
14.0
12.5
11.5
11.5
10.5
29%
28%
28%
29%
29%
Payout ratio
(0.8%)
14.4
13.0
17.9
21.7
14.9
CHF m
6.4%
3,631.9
2,967.6
3,743.1
4,510.8
2,833.2
0.0%
5,170,000
5,170,000
5,170,000
5,170,000
5,170,000
CHF m
11.8%
64.6
59.5
59.5
54.3
41.4
1.8%
7,550
7,525
7,281
7,592
7,028
Beans processed
Tonnes
6.9%
569,875
541,847
471,149
442,378
435,825
Tonnes
5.9%
1,053,906
971,951
947,387
885,372
838,940
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Contents
Income Statement
117
Balance Sheet
118
116 Konzernrechnung
Financial Statements
of Barry Callebaut AG
Income Statement
2009/10
2008/09
Dividend income
130,870,000
110,000,000
Financial income
9,769,770
7,661,120
License income
40,259,531
38,513,363
Management fees
21,556,186
22,510,824
8,885,175
15,466,509
211,340,662
194,151,816
Personnel expenses
(28,139,426)
(33,478,497)
Financial expenses
(14,432,489)
(13,290,633)
in CHF
Income
Other income
Total income
Expenses
(588,538)
(770,364)
(3,055,936)
(12,702,883)
(570,990)
(2,119)
(439,966)
Other expenses
(25,940,834)
(26,888,636)
Total expenses
(72,159,342)
(88,141,969)
139,181,320
106,009,847
Income taxes
(2,095,374)
(922,490)
137,085,946
105,087,357
2009/10
2008/09
956,043,024
841,902,604
1,422,174
8,990,434
Retained earnings
in CHF
Retained earnings as of September 1,
(Increase) decrease of reserve for treasury shares
Capital reduction on treasury shares
Net prot
Retained earnings as of August 31,
5,763
62,629
137,085,946
105,087,357
1,094,556,907
956,043,024
Financial Statements
Konzernrechnung
of Barry Callebaut AG
117
Balance Sheet
Assets
as of August 31,
2010
2009
in CHF
Current assets
Cash and cash equivalents
Treasury shares
Accounts receivable from Group companies
Short-term loans granted to Group companies
Other current assets
Total current assets
32,841
42,523
3,188,572
4,172,899
16,196,438
25,990,075
425,308
19,357
2,820,819
2,537,091
22,663,978
32,761,945
1,243,716
1,562,389
1,853,772,715
1,723,177,978
Non-current assets
Property, plant and equipment
Financial assets
Investments
Intangible assets
Trademarks
7,753,946
6,514,687
2,861,710
2,016,984
912,163
543,806
Other
1,866,544,250
1,733,815,844
Total assets
1,889,208,228
1,766,577,789
2010
2009
5,832
1,925,783
5,055,923
10,795,931
5,385,251
309,605
316,011
405,887,809
359,149,996
16,193,986
15,559,877
1,828,291
1,316,449
436,947,237
386,783,507
Share capital1
197,494,000
262,119,000
Legal reserves
157,019,393
157,019,393
Total liabilities
Shareholders equity
3,190,691
4,612,865
Retained earnings
1,094,556,907
956,043,024
1,452,260,991
1,379,794,282
1,889,208,228
1,766,577,789
1 The share capital as of August 31, 2010, consists of 5,170,000 fully paid-in shares
at a nominal value of CHF 38.20 (August 31, 2009: CHF 50.70)
118 Konzernrechnung
Financial Statements
of Barry Callebaut AG
The Swiss Barry Callebaut entities form a VAT subgroup and, hence, every company participating in the
subgroup is liable for VAT debt of other subgroup participants.
2010
2009
6,800,000
5,200,000
in CHF
Fire insurance value of property, plant and equipment
3. Investments
Name and domicile
Share capital
Purpose
Percentage of investment
as of August 31,
2010
2009
CHF
41,624,342
Dormant
100%
100%
EUR
62,700,000
Production, Sales
99.99%
99.99%
EUR
21,435,000
Holding
100%
100%
NGN
10,000,000
Sales
1%
1%
CHF
4,600,000
Production, Sales
100%
100%
EUR
615,000,000
In-house Bank
99.99%
99.99%
CHF
2,000,000
Sourcing
100%
100%
EUR
61,500
Dormant
99.99%
99.99%
7,000,000
Production, Sales
100%
100%
72,092,155
Holding
100%
100%
Belgium
Barry Callebaut Nederland B.V.,
The Netherlands
Barry Callebaut Nigeria Ltd,
Nigeria
Barry Callebaut Schweiz AG,
Switzerland
Barry Callebaut Services N.V.,1
Belgium
Barry Callebaut Sourcing AG,
Switzerland
BC Belgium Consumer N.V.,
Belgium
EUR
GmbH, Germany
Luijckx B.V., The Netherlands
EUR
18,242
Production, Sales
100%
100%
EUR
1,600,000
Conference and
100%
100%
CHF
100,000
100%
100%
Germany
Van Houten Service AG,
Training Center
Dormant
Switzerland
1 In 2009/10 share capital was increased by EUR 86,290,000.
4. Treasury shares
The Company holds 4,761 treasury shares as of August 31, 2010 (2009: 6,932). In 2009/10, the Company
bought 9,174 shares at an average price of CHF 652.65 per share (2008/09: 14,212 shares at an average price
of CHF 619.80) and transferred 10,845 shares at an average price of CHF 652.91 per share (2008/09: 23,734
Financial Statements
Konzernrechnung
of Barry Callebaut AG
119
shares transferred at an average price of CHF 749.94). Furthermore, the Company sold 500 treasury shares
at an average price of CHF 613.50 (2008/09: none). As of August 31, 2010, the treasury shares have been
valued at average price of CHF 669.73 per share (2008/09: average price of CHF 601.98 per share).
5. Signicant shareholders
as of August 31,
2010
2009
50.11%
50.21%
Renata Jacobs
8.48%
8.48%
6.14%
6.14%
Nathalie Jacobs
3.07%
3.07%
325.0
360
208.8
Total
remuneration 09/10
533.8
160.0
53.5
180
104.4
317.9
376.7
105.0
23.8
180
104.4
233.2
208.2
112.5
180
104.4
216.9
222.3
135.0
180
104.4
239.4
204.8
127.5
23.2
180
104.4
255.1
210.5
965.0
100.5
1,260
730.8
1,796.3
1,702.8
Remuneration
Executive Committee8
3,528.1
3,474.0
1,555.3
10,150
5,887.0
14,444.4
16,118.1
Total remuneration of
key management
4,493.1
3,474.0
1,655.8
11,410
6,617.8
16,240.7
17,820.9
Highest individual
remuneration within
Executive Committee:
Juergen B. Steinemann
CEO Barry Callebaut Group
1,000.0
1,011.1
680.4
3.750
2,175.0
4,866.5
n/a 9
Andreas Jacobs
Chairman/Delegate
Andreas Schmid
Vice Chairman
Member of the AFRQCC5
Rolando Benedick
Member of the NCC6
James L. Donald
Member of the NCC
Markus Fiechter7
Member of the AFRQCC
Stefan Pfander
Chairman of the NCC
Urs Widmer
Chairman of the AFRQCC
Total remuneration
Board of Directors
Compensation x
Compensation
variable
Other
compensation2
Number
of shares3
Value of
shares4
Total
remuneration 08/09
480.3
There were no termination payments nor payments to former members of the Board of Directors or
Executive Committee during the fiscal year.
As of August 31, 2010, no loans or credits to members of the Board of Directors or Executive
Committee or parties closely related to them are outstanding.
120 Konzernrechnung
Financial Statements
of Barry Callebaut AG
Holdings of shares10
Number of
Shares
2009/10
Number of
Shares
2008/09
Board of Directors
Andreas Jacobs (Chairman) 11,12
Andreas Schmid (Vice Chairman)
Rolando Benedick
2,341
1,200
12,330
12,150
1,500
1,320
James L. Donald
180
Markus Fiechter
Stefan Pfander
780
600
Urs Widmer
980
800
93
906
310
2,300
3,000
2,320
1,800
650
150
4,280
n/a
2,250
n/a
1
2
3
4
5
6
7
9
10
11
12
8. Subsequent events
There are no further events after the balance sheet date to be disclosed.
Appropriation of available earnings
The Board of Directors proposes to carry forward the balance of retained earnings of CHF 1,094,556,907.
Konzernrechnung
Report
of the Statutory Auditor
KPMG AG
Audit
Badenerstrasse 172
CH-8004 Zurich
P.O. Box
CH-8026 Zurich
Report of the Statutory Auditor on the Financial Statements to the General Meeting of Shareholders of
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers the internal control system relevant to the
entitys preparation of the financial statements in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entitys internal control system. An audit also includes evaluating the appropriateness of the accounting
policies used and the reasonableness of accounting estimates made, as well as evaluating the overall
presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements for the year ended August 31, 2010 comply with Swiss law and
the companys articles of incorporation.
Report on Other Legal Requirements
We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act
(AOA) and independence (article 728 CO and article 11 AOA) and that there are no circumstances
incompatible with our independence.
In accordance with article 728a paragraph 1 item 3 CO and Swiss Auditing Standard 890, we confirm that
an internal control system exists, which has been designed for the preparation of financial statements
according to the instructions of the board of directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and
the companys articles of incorporation. We recommend that the financial statements submitted to you
be approved.
KPMG AG
Roger Neininger
Licensed Audit Expert
Auditor in Charge
Marc Ziegler
Licensed Audit Expert
121
Contents
134 Glossary
136 Contacts, Financial calendar and Forward-looking statements
124 Corporate
Konzernrechnung
Governance
Corporate Governance
Additional information:
www.barry-callebaut.com/corporate_governance and www.barry-callebaut.com/organization
Board of Directors
Chairman
Andreas Jacobs
AFRQCC**
AFRQCC Chairman
Urs Widmer
NCC***
NCC Chairman
Stefan Pfander
Internal Audit
Karel Diepenhorst
Quality Assurance
Willy Geeraerts
Gourmet
Olivier Schucht
Western Europe
Massimo Garavaglia*
Eastern Europe
Filip De Reymaeker
Americas
David S. Johnson*
Asia-Pacic
Maurizio Decio
Information about the stock listing, principal subsidiaries and significant shareholders of Barry Callebaut is given on pages 62, 70, 108,
110 and 111 of the Consolidated Financial Statements and on pages
118, 119 and 120 of the Financial Statements of Barry Callebaut AG.
There are no cross-shareholdings equal to or higher than 5% of the
issued share capital.
Capital structure
The information required by the SIX Corporate Governance Directive regarding the capital structure is given in note 25 (share capital,
movements in the share capital) of the Consolidated Financial Statements. The company has no convertible bonds outstanding. In the
past three years, the Groups capital structure has not changed.
Konzernrechnung
Corporate
Governance
Additional information:
www.barry-callebaut.com/board and www.barry-callebaut.com/regulations
Board of Directors
The Board of Directors is ultimately responsible for the policies and
management of Barry Callebaut.The Board establishes the strategic,
accounting, organizational and financing policies to be followed, and
appoints the Executive Committee, to which the Board of Directors
has delegated the operational management of Barry Callebaut.
Besides its non-transferable and inalienable duties, the Board has
retained certain competencies as set forth in the Companys Internal
Regulations, which are publicly accessible on the Barry Callebaut
website.
Name
Nationality
As of August 31, 2010, the Board of Directors consisted of seven nonexecutive members. Each Director is elected by the shareholders
of Barry Callebaut AG at the General Meeting for a term of office of
one year and may be re-elected to successive terms.
Function
Member since
Andreas Jacobs
German
Chairman
2003
Andreas Schmid
Swiss
Vice Chairman
1997
2001
Rolando Benedick
Swiss
Director
James L. Donald
U.S.
Director
2008
Markus Fiechter
Swiss
Director
2004
Stefan Pfander
German
Director
2005
Urs Widmer
Swiss
Director
2004
Andreas Jacobs
Chairman of the Board since 2005, member of the Board
since 2003, German national
Andreas Schmid
Vice Chairman, member of the Board since 1997,
Swiss national
125
126 Corporate
Konzernrechnung
Governance
Rolando Benedick
Director since 2001, Swiss national
James L. Donald
Director since 2008, U.S. national
Markus Fiechter
Director since 2004, Swiss national
Corporate Governance
Stefan Pfander
Director since 2005, German national
Urs Widmer
Director since 2004, Swiss national
127
The primary task of the Audit, Finance, Risk, Quality & Compliance
Committee (AFRQCC) is to assist the Board in carrying out its responsibilities and make recommendations for the Boards policy decisions as they relate to the companys accounting policies, financial
reporting, internal control system, legal and regulatory compliance
functions and quality management. In addition, to ensure financial
risk management, the AFRQCC reviews the basic risk management
principles and guidelines, reviews the hedging and financing strategies, reviews the bases upon which the Board of Directors determines
risk tolerance levels and trading limits, and reviews the appropriateness of the risk management instruments and techniques employed.
Corporate Governance
Additional information:
www.barry-callebaut.com/executivecommittee
Executive Committee
As of November 2009, the former Senior Management Team has
been extended by two additional members and renamed to Executive Committee which is headed by the Chief Executive Officer. For
external activities of the members of the Executive Committee see
their curriculum vitae.
Name
Function
Juergen B. Steinemann
German
2009
Victor Balli
Swiss
2007
Massimo Garavaglia
Western Europe
Italian
2004
David S. Johnson
Americas
U.S.
2009
Steven Retzla
U.S./Swiss
2008
Dirk Poelman
Belgian
2009
Hans P. Vriens
Dutch
2009
Juergen B. Steinemann
Chief Executive Ocer, German national
Nationality
Member since
Victor Balli
Chief Financial Ocer, Swiss national
Victor Balli (1957) was appointed Chief Financial Officer and member of the Executive Committee of Barry Callebaut AG in February
2007.
Before joining Barry Callebaut, Victor Balli was with Minibar
since 1996. He began his career at Minibar as CFO and additionally
held the position of CEO EMEA as of 2005. During this time he also
served as executive director and board member of several group
companies of Niantic, a family investment holding. From 1991 to 1995,
he worked as a Principal with Adinvest AG, a corporate finance
advisory company with offices in Zurich, San Francisco, New York,
and London. From 1989 to 1991, Victor Balli served as Director
of Corporate Finance with Marc Rich & Co. Holding in Zug. He
started his professional career in 1985 working as a Financial Analyst
& Business Development Manager with EniChem International SA
in Zurich and Milan.
Victor Balli holds a Masters degree in Economics from the University of St. Gallen and a Masters degree as a Chemical Engineer
from the Swiss Federal Institute of Technology in Zurich.
129
Massimo Garavaglia
President Western Europe, Italian national
Dirk Poelman
Chief Operations Ocer, Belgian national
Dirk Poelman (1961) was appointed Chief Operations Officer in September 2006 and member of the Executive Committee in November
2009. Since 1984, he has been working with Callebaut which merged
with Cacao Barry in 1996 in various positions and countries: first
as Engineering Manager, then as Production Manager, Operations
Director and Chief Manufacturing Officer.
In 1997, Dirk Poelman became Executive Vice President Operations responsible for the operations of the total Group and a member of the Senior Management Team. In 2004, he was appointed
Vice President Operations and Research & Development.
Dirk Poelman holds an industrial engineering degree in electromechanics from the Catholic Industrial High School in Aalst, Belgium.
Steven Retzla
President Global Sourcing & Cocoa, U.S. and Swiss national
David S. Johnson
CEO and President Americas, U.S. national
David S. Johnson (1956) was appointed CEO and President Americas in May 2009, and is a member of the Executive Committee of
Barry Callebaut AG.
Before joining Barry Callebaut, David Johnson served as CEO
and member of the board for Michael Foods, Inc., a food processor
and distributor headquartered in Minnetonka, Minn., U.S.
From 1986 to 2006, David Johnson was with Kraft Foods Global,
Inc., the second largest food and beverage company in the world.
At Kraft Foods, he held several senior positions in different divisions,
including marketing, strategy, operations, procurement and general
management. His last position was President Kraft North America
and Corporate Officer Kraft Foods Global, Inc. He started his career
in 1980 at RJR Nabisco.
David Johnson is a member of the board of directors of Arthur
J. Gallagher & Co, an international insurance brokerage and risk
management company with headquarters in Itasca, Ill., U.S.
David Johnson holds both a Bachelors and Masters degree in
business from the University of Wisconsin.
Corporate Governance
Hans P. Vriens
Chief Innovation Ocer, Dutch national
Hans P. Vriens (1965) was appointed to the position of Chief Innovation Officer and member of the Management Team in December
2005. Since November 2009, Hans Vriens has been a member of the
Executive Committee.
From 2001 to 2005, Hans Vriens was active as the owner of
VF&CO. B.V. in Amsterdam, Netherlands, a holding company which
invests in and develops new consumer brands for itself and for thirdparty customers.Activities include consulting for large multinational
companies in functional foods, a partnership selling an energy drink
in a new packaging concept, as well as the production and distribution of a functional dairy product.
Prior to this, Hans Vriens served as Executive Board Member
responsible for Sales, Marketing and Interactive at EM-TV & Merchandising AG in Munich, Germany, and was active in various nonexecutive board positions in related media companies.
From 1994 to 1999, he held various functions with Red Bull
GmbH, among which Managing Director for Red Bull North America in Los Angeles, U.S. From 1989 to 1994, Hans Vriens worked as
Brand Manager for Procter & Gamble in Austria and in Germany.
He started his career in brand management and marketing with Mars/
Effems in Spain and in the Netherlands.
Hans Vriens holds a BBA in Marketing from the Nijenrode
Business University in Breukelen,Netherlands,an MBA in Marketing/
International Business from the University of Oregon, U.S., and
received Post Graduate Education at Stanford University, U.S.
131
Shareholders participation
Each share of Barry Callebaut AG carries one vote at the General
Meeting. Voting rights may be exercised only after a shareholder has
been registered in the Barry Callebaut AG share register as a shareholder with voting rights.
No shareholder holding more than 5% of the share capital may
be registered as a shareholder with voting rights with respect to the
shares such shareholder holds in excess thereof. For purposes of the
5% rule, groups of companies and groups of shareholders acting in
concert or otherwise related are considered to be one shareholder.
Shareholders may register their shares in the name of a nominee
approved by Barry Callebaut AG and may exercise their voting rights
by giving instructions to the nominee to vote on their behalf.
However, a nominee holding more than 3% of the share capital
will be registered as nominee for shareholders with voting rights only
if it discloses the identity of each beneficial owner of shares claiming
0.5% or more of the share capital. No nominee holding more than
8% of the share capital may be registered as a shareholder with
respect to the excess shares. The Board of Directors may, however,
on a case-by-case basis, permit some or all of the excess shares to be
registered with voting rights. In fiscal year 2009/10, no such exception
was granted by the Board of Directors.
A resolution passed at the General Meeting with a majority of at
least two-thirds of the shares represented at such meeting is required
to lift the restrictions on the transferability of registered shares.
Shareholders may be represented at the General Meeting by
proxy. Proxy holders must themselves be shareholders, or be appointed by Barry Callebaut, independent representatives nominated by
Barry Callebaut AG, or a depository institution.
The Articles of Incorporation follow the majority rules and the
provisions on convocation prescribed by the Swiss law concerning
general meetings of shareholders.
Shareholders with voting rights holding shares representing in
total at least 0.25% of the share capital or the voting rights have the
right to request in writing giving at least 60 days notice that
a specific proposal be discussed and voted upon at the next General
Meeting.
Shareholders registered in the share register with voting rights
at the date specified in the invitation will receive an invitation to the
Annual General Meeting.
Change of control and defense measures
An investor who acquires 3313 % of all voting rights has to submit
a take-over offer for all shares outstanding, according to the Swiss
Stock Exchange Law. Barry Callebaut has not elected to change or
opt out of this rule.
The employment contracts of two members of the Executive
Committee have a fixed minimum duration of three years, ending
2012 and 2013 respectively, while the employment contracts with the
remaining members of the Executive Committee are open-ended and
contain notice periods of 6 to 12 months, during which they are entitled to full compensation.
Konzernrechnung
Corporate
Governance
Additional information:
www.barry-callebaut.com/documentation
External auditors
At the Annual General Meeting of Barry Callebaut AG on December 8, 2005, the shareholders voted to appoint KPMG AG, Zurich,
as statutory auditors. The statutory auditors are appointed annually
by the General Meeting for a one-year term of office. The current
auditor in charge has exercised this function since fiscal year 2005/06.
For the fiscal year 2009/10, the remuneration for the audit of the
accounting records and the financial statements of Barry Callebaut
AG, and the audit of the consolidated financial statements, amounted
to CHF 2.6 million. This remuneration is evaluated by the AFRQCC
in view of the scope and the complexity of the Group. The performance of the auditors is monitored by the AFRQCC, to which they
present a detailed report on the result of the audit of the Group.
Prior to the presentation to the AFRQCC, the lead auditor reviews
the audit findings with the Chairman of the AFRQCC without the
presence of any members of the management.
KPMG received a total amount of CHF 0.2 million for additional services, i.e. for transaction and other advisory (incl. due diligence).
Adequate measures for the avoidance of potential conflicts of interests between the different services provided by KPMG were observed.
Information policy
Barry Callebaut is committed to continuous and open communication with its shareholders, potential investors and other stakeholders based on the principles of transparency and equal treatment, i.e.
simultaneous provision of price-sensitive information and no selective disclosure.
The Group provides detailed information on its business activities and financial performance in its annual and half-year reports and
press releases, at the conferences for media and financial analysts as
well as at the Annual General Meeting. Further, representatives of
the Group regularly meet (potential) investors in personal meetings
as well as present Barry Callebaut at industry events and investor
conferences.
Presentations are also made available on the Groups website,
which is updated continuously. The financial calendar for the fiscal
year 2010/11 and contacts are given on page 136.
133
134 Glossary
Konzernrechnung
Glossary
A
ACTICOA
A process developed by Barry
Callebaut which conserves to a
very high degree the polyphenols
naturally present in the cocoa
bean, that may otherwize
destroyed during the chocolate
production process.
B
Biolands
Biolands in Tanzania is the largest
African exporter of certied organic cocoa. Barry Callebaut acquired
a 49% stake in Biolands in 2008.
Biolands is working directly with
smallholders, in order to guarantee them fair prices and to help
them improve the quality and
value of their production. They
have another framer project in
Sierra Leone.
Butter
Refers to cocoa butter, the fat
of the cocoa bean.
C
Cocoa butter ratio
Price of 1 metric tonne of cocoa
butter relative to the price of
1 metric tonne of cocoa beans.
Cocoa powder ratio
Price of 1 metric tonne of cocoa
powder relative to the price
of 1 metric tonne of cocoa beans.
Combined cocoa ratio
Combined sales prices for cocoa
butter and cocoa powder relative
to the cocoa bean price.
Compound
Consists of a blend of sugar, vegetable oil, cocoa liquor, powder
and/or butter and other products.
Vegetable oil is substituted for
cocoa butter to reduce the product cost and to develop special
melting proles.
Conche
A large tank with a powerful
stirring device inside that kneads
the chocolate mixture slowly
over a long time. Contact with air,
heat and friction results in several
D
Dark chocolate
Dark chocolate is chocolate that
contains more than 43% cocoa
solids coming from cocoa liquor,
powder and/or butter. This is the
chocolate most often used for
premium chocolate confections.
Besides cocoa ingredients it
contains sugar, vanilla, and often
lecithin.
Drying
After fermentation, the beans
still contain 60% moisture, which
must be reduced to 8% or less
in order to ensure optimum conservation during storage and
transportation. Drying can either
be done by spreading the beans
out in the sun or by placing them
on a heated surface or by hot
air. Thorough drying avoids the
formation of molds.
Dutching
A treatment used during the
making of cocoa powder in which
E
EBIT
Operating prot (Earnings Before
Interest and Taxes).
EBITDA
Operating prot before
depreciation and amortization
(Earnings Before Interest, Taxes,
Depreciation and Amortization).
F
Fairtrade
The Fairtrade Labelling Organizations International (FLO) arranges
direct contracts with thousands
of small manufacturers, traders,
importers and exporters of foodstus, and ensures that they are
paid a higher price for their products. Barry Callebaut is certied
by the FLO-CERT to produce a
range of Fairtrade cocoa and chocolate products. These products
are manufactured with raw materials purchased from Fairtrade
manufacturers.
Fermentation
Fermentation is an essential and
delicate stage in cocoa bean
processing. Beans and pulp are
heaped in piles, covered with
banana leaves or put in boxes and
left to ferment for several days.
During fermentation the beans
lose their natural bitterness and
astringency.
Flavanol
A specic type of polyphenol,
known for its antioxidant activity.
Forastero
Forastero are the most commonly
grown and used cocoa beans.
Compared to Criollo, Forastero is
a stronger tree that is easier
to cultivate and produces larger
yields. They make up about 90%
of the worlds production and are
grown mainly in West Africa.
The cocoa has a pungent aroma.
Konzernrechnung
Glossary
I
Industry Protocol
Also known as Harkin-Engel
Protocol. The Protocol was signed
in 2001 by cocoa and chocolate
manufactuers, industry and trade
associations, government organizations and NGOs in response to
reports of children working under
abusive labor conditions on cocoa
farms in West Africa. The signers
condemned abusive labor practices, in particular the worst forms of
child labor as dened by the International Labor Organization (ILO),
and committed to work together to
address the issue. Barry Callebaut
is a signer of the Protocol.
L
Liquor
Also known as cocoa liquor or
cocoa mass. The thick liquid paste
that is produced in the grinding
process.
M
Milk chocolate
Chocolate with at least 25% cocoa
solids coming from cocoa liquor,
powder and/or butter to which
powdered milk, sugar, vanilla, and
lecithin has been added. Good
milk chocolate contains 30%
chocolate liquor. Premium milk
chocolate contains even more.
Molding
The process of creating gures
and shapes out of chocolate.
Chocolate is melted to 45C, then
cooled below its crystallization
point, then heated again to 30C.
Following this tempering process,
the chocolate is poured onto
the inner surface of the molds,
also heated to 30 C. After cooling,
the nal product is unmolded
to reveal a glossy chocolate gure.
N
Nib
The center of the cocoa bean.
P
Polyphenols
Cocoa beans contain polyphenols
of unusually high quality and
Q
Quality Partner program
Barry Callebauts program with
cocoa cooperatives in Cte dIvoire.
The goal is to provide farmers
with access to better training in
agricultural techniques and
how to manage their business
and personal nances, as well as
access to healthcare for themselves and their families, and sensitization about child labor issues
and the importance of schooling
for their children. The training
enables farmers to improve the
quality of their farms and business practices and to deliver more
and better-quality cocoa beans
for which they will earn more.
R
Rainforest Alliance
The Rainforest Alliance works to
conserve biodiversity and ensure
sustainable livelihoods by
transforming land-use practices,
business practices and consumer
behavior.
Roasting
Roasting is a heating process
aimed at developing the chocolate
aroma. Roasting certain foods not
only makes them more digestible,
but also more aromatic. Cocoa
beans are roasted to a greater or
lesser extent depending on what
they are being used for. Cocoa
powder needs more intense roasting, whereas chocolate requires
ner roasting.
S
Semi-nished products
Examples include cocoa liquor,
T
Trinitario
Trinitario beans are a cross of
Criollo and Forastero cocoa. It has
characteristics of both: the trees
are easy to cultivate and the cocoa
beans have a strong, but relatively
rened aroma.
U
UTZ
UTZ CERTIFIED Good Inside is
dedicated to creating an open and
transparent marketplace for
agricultural products. Founded in
2002, UTZ CERTIFIED has been a
pioneer in the eld of certication
and traceability of coee supply
chains. Based on this success, it is
developing sustainability models
for other sectors, such as cocoa,
tea and palm oil.
V
Viscosity
The measure of the ow characteristics of a melted chocolate.
Vegetable fats
Sometimes used as a less expensive alternative to cocoa butter in
chocolate products.
W
White chocolate
White chocolate is made from
cocoa butter (at least 20%), powdered milk, sugar, and vanilla. It
contains no cocoa liquor or powder.
135
136 Konzernrechnung
Contacts, Financial calendar and
Forward-looking statements
Contacts
Barry Callebaut head oce
Barry Callebaut AG
West-Park
Pngstweidstrasse 60
8005 Zurich, Switzerland
Phone +41 43 204 04 04
Fax +41 43 204 04 00
www.barry-callebaut.com
Mailing address
Barry Callebaut AG
P.O. Box
8021 Zurich, Switzerland
Investor Relations
Evelyn Nassar
Head of Investor Relations
Phone +41 43 204 04 23
Fax +41 43 204 04 19
investorrelations@
barry-callebaut.com
Media
Raphael Wermuth
External Communications
Manager
Phone +41 43 204 04 58
Fax +41 43 204 04 00
[email protected]
Address changes
SIX SAG Aktienregister AG
P.O. Box
4609 Olten, Switzerland
Phone +41 62 311 61 11
Fax +41 62 311 61 12
Financial calendar
Date
Annual General Meeting 2009/10, Zurich
December
7, 2010
January
12, 2011
April
1, 2011
June
30, 2011
November
10, 2011
December
8, 2011
Forward-looking statements
Certain statements in this Annual Report 2009/10 regarding the business of Barry Callebaut are of a
forward-looking nature and are therefore based on managements current assumptions about future
developments. Such forward-looking statements are intended to be identified by words such as believe,
estimate, intend, may, will, expect, and project and similar expressions as they relate to the
company. Forward-looking statements involve certain risks and uncertainties because they relate to future
events. Actual results may vary materially from those targeted, expected or projected due to several
factors. The factors that may affect Barry Callebauts future financial results are discussed in this Annual
Report. Such factors are, among others, general economic conditions, foreign exchange fluctuations,
competitive product and pricing pressures as well as changes in tax regimes and regulatory developments.
The reader is cautioned to not unduly rely on these forward-looking statements that are accurate only
as of November 4, 2010. Barry Callebaut does not undertake to publish any update or revision of any
forward-looking statements.
Imprint
Graphics: Luar, Zurich (CH)
Photos: Marcel Van Coile, Zemst (B)
Prepress/Press: Visiolink AG, Zurich (CH)
2009/10
Annual Report