Barry Callebaut AG

Barry Callebaut reported half-year revenue figures in the transcript only indirectly through segment mix and volume commentary, but gave hard figures for recurring EBIT of CHF 310.9 million, down 4.2% in local currencies; profit before tax up CHF 2 million, or 1.3%; and net profit up CHF 42 million, or 66%. Recurring income tax expense was CHF 29.6 million versus CHF 69.4 million a year ago, with an effective tax rate of 21.4%. Free cash flow was CHF 802 million, and net debt over EBITDA improved to 3.9x. Management said cocoa bean prices fell 53% in 8 weeks and closed at GBP 2,057 at the end of February. For the full year, the company now expects group volume down 1% to 3%, recurring EBIT down mid-teens in local currencies, and net debt over EBITDA below 3x using a working mean bean-price assumption of GBP 3,000.

Hein Schumacher said he has spent his first months in “listen and learn mode” and sees a company with strong foundations but too many priorities, too much complexity and too many service and quality issues. He emphasized that Next Level had the right intent but became overextended, and that the new Focus for Growth plan will concentrate resources on a reduced set of priorities, with customer centricity at the center. His tone was candid and corrective rather than celebratory, but he repeatedly expressed confidence that Barry Callebaut can return to profitable growth and regain momentum.

Peter Vanneste highlighted that lower cocoa bean prices, sequential volume improvement and stronger cash generation were the main positives in H1. He said recurring EBIT fell 4.2% to CHF 310.9 million because strong cocoa profitability was more than offset by lower volume, supply disruption and competition, while free cash flow reached CHF 802 million and leverage fell to 3.9x. He also pointed to a CHF 2 billion sustainability-linked borrowing base facility, including CHF 1.6 billion committed and CHF 400 million uncommitted, as a way to diversify funding and better manage financing costs with cocoa price moves.

Analysts focused on how much of the guidance cut is temporary versus structural, and whether fiscal 2027 can recover some of the pressure. Management said some items are temporary, including the Gourmet long-position impact and supply disruptions, while lower financing costs are structural and should flow through PBT rather than EBIT; Peter also said fiscal-year finance costs should be CHF 50 million to CHF 60 million lower than last year. Questions also probed whether service-level reinvestment and tactical capacity spending would require higher CapEx or inventory permanently; Hein said these are not broad incremental programs, but targeted actions to restore service, quality and customer fit, while CapEx guidance is not being increased this year. On the volume bridge, Hein said lower bean prices, customers booking further ahead, improved category investment by customers and reduced disruptions should support H2 growth, though the Middle East remains a volatile risk.