Barry Callebaut sets sights on profit growth in CEO Schumacher's strategy
Barry Callebaut's Financial Outlook and Strategic Direction
By Paolo Laudani
June 2 (Reuters) - Swiss chocolate maker Barry Callebaut expects its recurring operating profit to grow by a mid- to high-single-digit percentage in local currencies over the medium term, it said on Tuesday as part of the first strategy under CEO Hein Schumacher.
Profit and Sales Volume Projections
The company, which buys cocoa beans that it processes into cocoa butter and powder, also forecast medium-term sales volume to rise by 2% to 4%, without providing a more detailed time frame.
Market Expectations for CEO Schumacher
The market was expecting the former Unilever chief executive, appointed by Barry Callebaut in January to replace Peter Feld, to deliver clear financial targets for the company that last month cut its operating profit forecast and said it expected volumes to fall between 1% and 3% in the financial year ending in August.
Short-Term and Medium-Term Targets
One of the world's top cocoa processors, which supplies key food producers such as KitKat maker Nestle, confirmed those targets on Tuesday, while saying it expected volumes to improve to growth of 1% to 3% over the next year to year-and-a-half.
Challenges and Analyst Perspectives
In this period, Barry will have some hurdles to clear as it faces customer insourcing, said Jon Cox, head of Swiss equities at Kepler Cheuvreux.
"Potentially investors were looking for a bit more and I assume estimates may come under pressure," Cox added about the mid-term guidance, although he noted that Barry was focused on improving profitability faster than volume.
Analyst Consensus and Share Performance
A company-provided consensus showed that analysts were expecting volumes to grow around 4% in the fiscal year through August 2027.
Shares of the Swiss company, which gained 40% over the past year while London cocoa futures halved in value partly due to low demand and oversupply, were little changed at 0806 GMT.
Industry Reactions
"We are pleased to see mid-term targets ... though the near-term goal of volume growth of 1%-3% looks quite ambitious given ongoing supply chain pressures and cautious consumer sentiment," Morningstar analyst Svetlana Menshchikova said.
(Reporting by Paolo Laudani in Gdansk, editing by Milla Nissi-Prussak)
