Barry Callebaut (BARN) Investor update (Media) summary

Strategic priorities and growth focus

• Emphasizing a shift to premium segments, strengthening fundamentals, and positioning as a solutions provider, with resources focused on fewer, high-potential priorities.

• Pursuing a full portfolio of chocolatey solutions, including cocoa and non-cocoa alternatives, such as sunflower seed-based products and cell culture technologies.

• Premiumization and value accretion prioritized over pure volume growth, with focus on adjacencies like protein bars and ice cream.

• Launched Focus for Growth plan to restore fundamentals, expand value-added solutions, and diversify sourcing.

• Plans to enhance operational resilience and stabilize core operations.

Market outlook and volume guidance

• Expecting volume growth to resume in the second half of the year, with 1%-3% growth targeted for next year and 2%-4% medium-term growth.

• Chocolate confectionery market expected to grow 1%-2%, with adjacencies like ice cream and protein bars growing faster.

• Recovery in demand is anticipated, but consumer disposable income and high cocoa prices may temper volume growth.

• Expects 1-3% volume growth recovery over 12-18 months, with FY 2025/26 volume down -1% to -3% but returning to growth in H2.

• Targets 2-4% volume growth, mid-to-high single-digit EBIT growth, low-teens profit before tax growth, CHF 300-400 million free cash flow, and 11-13% ROIC.

Customer service and operational improvements

• Past execution challenges and quality incidents led to suboptimal customer service, with on-time and full deliveries sometimes below 80%.

• Investments in capacity, safety stocks, and core processes are underway to improve reliability and customer centricity.

• Strengthening sales and operations planning, simplifying customer processes, and enhancing digital capabilities.

• Maintaining quality, safety, and sustainability as core foundations.

• Gourmet segment inventory levels are being increased to enhance service.