Switzerland · Delayed Price · Currency is CHF Barry Callebaut AG Earnings Call Transcripts
Fiscal Year 2026
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Volumes returned to growth in Q3, led by cocoa and chocolate, with EMEA and North America showing improvement. Full-year volumes are expected to decline by ~1%, while profitability faces headwinds from cocoa normalization, commercial investments, and bond buyback costs.
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The new CEO outlined a strategy focused on strengthening fundamentals, regional accountability, and digital transformation. Key investments target North America and premium product segments, with medium-term growth and profitability targets set. Sustainability and portfolio focus remain central.
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Premiumization and operational improvements are central to the growth plan, with targeted investments in emerging markets and a focus on customer service. Volume growth is expected to resume, while margin recovery depends on commodity price normalization.
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Focused investments target North American expansion, premiumization, and adjacencies like ice cream and bars. Financial guidance anticipates lower finance costs, improved working capital sensitivity, and cautious volume growth amid market and geopolitical uncertainties.
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Focus for Growth targets five key priorities—global accounts, regional manufacturers, gourmet, specialties, and premium cocoa powder—supported by operational enablers and disciplined capital allocation. The plan aims for above-market volume and profit growth, enhanced customer-centricity, and sustained value creation for shareholders.
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Recurring EBIT fell 4.2% year-over-year, but net profit surged 66% on lower finance costs and taxes. Volume guidance improved for H2, with strong cash flow and reduced leverage, while the new Focus for Growth plan targets operational discipline and customer-centricity.
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Q1 volumes declined 9.9% year-over-year amid challenging cocoa markets, but strategic areas like Cacao Coatings and AMEA showed resilience. Lower cocoa prices are improving market stability and forward bookings, with guidance reaffirmed for a gradual recovery in H2.
Fiscal Year 2025
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H2 saw strong cash generation and deleveraging, but full-year volumes and net profit declined due to high cocoa prices and market volatility. Outlook for FY 2025/2026 is cautious, with a focus on deleveraging, operational improvements, and innovation to drive future growth.
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Historic cocoa price volatility led to a 6.3% volume decline but nearly 57% revenue growth, as higher costs were rapidly passed through. Strategic focus on chocolate, operational transformation, and deleveraging are underway, with EBIT recurring set to rise and ample liquidity maintained.
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The company is executing a major transformation through its Next Level program, focusing on digitization, operational efficiency, and customer proximity. Investments target improved service, sustainability, and innovation, while financial resilience is maintained through robust pricing and liquidity management. Growth is driven by direct sales, specialty expansion, and Asian market entry.
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Unprecedented cocoa bean price volatility drove up costs, reduced volumes by 4.7%, and cut net profit by 69%, despite a 1.5% EBIT increase and strong liquidity. The company maintains its long-term strategy, expects a mid-single-digit volume decline, and continues to invest in cost savings and digital transformation.
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Volumes fell 2.7% in Q1, prompting a revision to low single-digit volume decline for the year, while double-digit EBIT growth is maintained. Liquidity has been strengthened amid higher working capital needs, and cost savings from the Next Level program are on track, with further supply chain improvements identified.
Fiscal Year 2024
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Delivered resilient results amid record cocoa price volatility, with flat volumes, strong EBIT growth, and major transformation progress. Outlook anticipates flat to slightly positive chocolate growth and double-digit EBIT gains, with free cash flow recovery hinging on cocoa price trends.
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EUDR compliance requires full traceability, robust due diligence, and forest protection, with significant investments in technology and partnerships to mitigate deforestation risks. Costs of compliance are being passed to customers, and the company’s early, integrated approach provides a competitive edge.