UPDATE 2-Barry Callebaut eyes growth in still weak market

* Year net profit up to 252 mln Sfr, vs 238 mln forecast

* Sales volumes up 7.6 pct vs 8.4 pct rise in poll

* Proposes capital repayment of 14 Sfr per share

* Extends financial targets until 2012/13

* Shares up 0.5 percent

(Adds CEO, CFO interview, analyst comment, details, background)

By Silke Koltrowitz

ZURICH, Nov 4 (BestGrowthStock) – The world’s top chocolate products
maker Barry Callebaut (BARN.S: ) on Thursday said it was confident
of outpacing a sluggish global chocolate market by looking for
more outsourcing deals with food producers.

The company, which provides the food manufacturing industry
with cocoa and chocolate products, recently signed an
outsourcing deal with U.S. giant Kraft Foods (KFT.N: ),
demonstrating its growth potential despite weak global demand
for chocolate and high cocoa prices. [ID:nLDE6671EL]

Outsourcing deals would continue to be an important growth
driver, Chief Executive Juergen Steinemann told Reuters in an
interview. “We have a full pipeline of outsourcing ideas and
talks and if we can strike a deal we’ll do it,” he said.

Cautious consumer spending in Europe and the United States
is weighing on chocolate consumption, the CEO said. He expected
the global chocolate market to grow 1-2 percent over the group’s
next fiscal year.

Chief Financial Officer Victor Balli said he hoped Barry
Callebaut’s tight cost management would continue to help it
protect its profitability from rising raw material prices and
consumers opting for cheaper products.

Raw material prices are expected to stay above historical
averages and to remain volatile, Barry Callebaut said in a
statement, adding that it would focus on securing its long-term
supply of cocoa beans.

COCOA PRICE SPIKE

“Cocoa crops in the Ivory Coast look good and this could
ease the pressure in the short term and maybe even offer some
downside potential to cocoa prices over the next months,” Balli
said.

Cocoa futures on Liffe (LCCc2: ) have retreated after trading
at a 32-year high of 2,465 pounds a tonne in mid-July.
[ID:nLDE66R288]

Prices peaked as commodities trading firm Armajaro took
delivery of almost all available Liffe graded cocoa on the
expiry of the July contract and European cocoa grindings started
to rebound from a recession-linked dip in 2009.

Barry Callebaut had not bought any cocoa from Armajaro
directly, Steinemann said.

Long-delayed elections in the world’s biggest cocoa producer
Ivory Coast were a sign of more stability in the country and
should help improve the outlook for growing cocoa there, Balli
said. [ID:nLDE6A300B]

Net profit for the company’s full year to the end of August,
rose to 252 million Swiss francs, while sales volumes were up
7.6 percent to 1.3 million tonnes, in line with the company’s
target of average volume growth of 6-8 percent.

Barry Callebaut extended its financial targets until
2012/13.

“While we had expected more in terms of volume growth the
operating profit achievement and net profit was better than
expected,” said Vontobel analyst Claudia Lenz in a note.

Barry Callebaut, which also counts Nestle (NESN.VX: ) and
Hershey (HSY.N: ) amongst its customers, said it proposed a
capital repayment of 14 francs, up from 12.50 francs last year.

Barry Callebaut’s shares were down 0.72 percent.

Barry Callebaut is trading at 15 times estimated August 2011
earnings at a discount to premium chocolate maker Lindt &
Spruengli (LISP.S: ) and chocolate and confectionery group Hershey
(HSY.N: ).

(Additional reporting by Nigel Hunt. Editing by Jane
Merriman)

UPDATE 2-Barry Callebaut eyes growth in still weak market