Barry Callebaut (BARN) Trading Update summary

Market environment and trading update

• Q1 sales volume declined 2.7%, in line with the market, due to retail price negotiations, delayed orders, and SKU rationalization.

• Sales revenue surged 63.1% in constant currency, driven by a >70% rise in cocoa bean prices, with cost-plus pricing passing costs to customers.

• Premium brands gained share while mainstream players faced more volume pressure; Latin America (+13.2%) and AMEA (+6.4%) showed strong growth, offsetting declines in Europe and North America.

• Global Cocoa segment grew 0.3% in Q1, with robust powder demand but constrained cocoa liquor supply.

• Chocolate market volumes faced short-term pressure as manufacturers raised prices ~10% year-on-year.

Financial position and liquidity

• Additional liquidity secured through a CHF 300 million Swiss bond, €1 billion bridge loan, and €620 million revolving credit facility.

• Working capital requirements have increased industry-wide due to higher bean prices, impacting free cash flow outlook negatively.

• Interest costs are expected to rise above the previously communicated CHF 50 million increase, depending on bean price evolution.

• Liquidity policy remains prudent and proactive, with further financing possible if bean prices remain elevated.

• Liquidity measures support ongoing strategic investments and operational flexibility.

Operational and strategic initiatives

• Progress made on the Next Level investment program, including social plan completions, site negotiations, and R&D expansion.

• SKU rationalization and supply chain improvements are ongoing, with further opportunities identified for inventory health and digitization.

• Outsourcing discussions continue, with some limited insourcing by large customers, but overall strategy remains balanced.

• BC Next Level targets CHF 250 million in cost savings, with 75% expected to benefit the bottom line.

• Planning further actions to increase returns and access to sustainable beans.