Barry Callebaut (BARN) H2 23/24 earnings summary

Executive summary

• Navigated unprecedented cocoa supply disruptions and price volatility, advancing the first year of the Next Level transformation program and delivering key milestones.

• Achieved flat volumes in a declining market, with strong recurring EBIT growth and operational improvements.

• Advanced strategic priorities: outsourcing, gourmet, specialties, and Asia/AMEA expansion, with progress in each area.

• Implemented new country cluster management structure and stepped up quality, food safety, digitalization, and sustainability initiatives.

• Achieved key wins in FMCG outsourcing, regained gourmet market share, and launched direct-to-customer channels.

Financial highlights

• Sales revenue rose 28.1% in local currencies to CHF 10,386.3M; gross profit up 7.7% to CHF 1,382.3M.

• Recurring EBIT grew 12.7% to CHF 704.4M, driven by mix shift, cost savings, and the cost-plus model; reported EBIT was CHF 446M, impacted by CHF 258M in one-off Next Level costs.

• Recurring net profit in local currencies declined slightly by CHF 9M to CHF 434M; reported net profit CHF 190.9M (-56.9%), mainly due to higher financing costs.

• Free cash flow was CHF -2,330.7M, primarily due to a CHF 2.8B increase in inventory value from higher cocoa prices.

• Net debt increased to CHF 3,818M, fully explained by higher inventory values from cocoa price surge.

Outlook and guidance

• Expect flat overall volume and slightly positive chocolate growth for FY25, with growth weighted to the second half.

• Project double-digit recurring EBIT growth, excluding one-time Next Level expenses.

• CapEx cash out for Next Level expected at CHF 200–250M in FY25; net interest costs projected at ~CHF 230M.

• Free cash flow expected to remain under pressure in H1, with potential for positive flow in H2, highly dependent on cocoa price evolution.

• Long-term targets reaffirmed: low to mid-single-digit volume growth and mid to high single-digit EBIT growth post-transformation.