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Barry Callebaut · Chocolate Industry · Cocoa Prices · Sales Forecast
Barry Callebaut, a major chocolate and cocoa product maker, forecasts a mid single-digit percentage decline in cocoa product sales for its upcoming financial year due to high cocoa prices, yet its shares unexpectedly rose 3% on strong free cash flow of 1.80 billion Swiss francs ($2.27 billion).
The company, which supplies ingredients for brands like Magnum and KitKat, also projected recurring core earnings (EBIT) growth in a low to mid single-digit percentage in local currencies for 2025/26. Sales volume for the financial year ending August fell 6.8% to 2.1 million tonnes, meeting analyst expectations, but fourth-quarter volumes dropped 8%, according to a Reuters calculation.
CFO Peter Vanneste noted that some large customers are prioritizing in-house chocolate production to save money. Barry Callebaut's direct exposure to fluctuating cocoa bean prices makes it more vulnerable than consumer-facing firms.
Analysts offered contrasting views: Vontobel's Matteo Lindauer saw the new targets as a "welcome shift" from previous unattainable ones, while Kepler Cheuvreux's Jon Cox deemed them cautious, predicting potential stock pressure. Lindauer highlighted challenging industry conditions, citing recent profit forecast cuts from key customers like Mondelez and Hershey due to weakening consumer spending and higher cocoa costs.
