Barry Callebaut (BARN) H2 24/25 earnings summary

Executive summary

• Strong progress on cash generation and deleveraging in H2, reducing Net Debt/EBITDA to 4.5x after a spike in H1 due to higher inventory values and cocoa price volatility, supported by strategic actions under the BC Next Level program.

• Major progress on the BC Next Level strategy, driving operational improvements, digitalization, and customer experience enhancements.

• Navigated unprecedented cocoa market disruption, with chocolate prices tripling within months and market volumes declining.

• Focus areas for the year ahead: deleverage to below 3.5x net debt/EBITDA, strong cash generation, and preparing for growth through customer experience and innovation.

Financial highlights

• Recurring EBIT grew 6.4% in constant currency, with EBIT per ton up 14% year-over-year.

• Group sales volume declined 6.8% year-over-year, with Global Chocolate down 5.3% due to B2B headwinds and cocoa prioritization.

• Net profit at CHF 250 million (CHF 267 million constant currency), down 36% in local currencies, with H2 flat versus last year after a weak H1.

• Free cash flow returned to positive in H2 (CHF 1.1 billion to CHF 1,802M), driven by working capital actions and lower bean prices.

• Sales revenue grew 49.0% in local currencies, driven by cost-plus pricing and mix, despite lower volumes.

Outlook and guidance

• Targeting deleverage below 3.5x net debt/EBITDA and strong cash generation in FY 2025/2026, assuming a working bean price of ~£5,000.

• Expecting mid-single digit volume decrease in global chocolate and group, and mid- to high-single digit decrease in global cocoa.

• Recurring EBIT expected to grow low- to mid-single digit, and profit before tax recurring to grow double-digit in local currencies, excluding CHF 60M one-time opex.

• H1 2025/2026 to remain challenged, with improvements anticipated in H2.