Barry Callebaut (BARN) Q3 25/26 TU earnings summary

Executive summary

• Group volume returned to positive growth in Q3 after more than two years of declines, driven by strong demand in global cocoa and improved chocolate performance, especially in EMEA and North America, despite a challenging market.

• The Focus for Growth Action Plan was launched, emphasizing solutions-oriented business, premiumization, and strengthening core volumes, with five key growth priorities and a focus on value-added solutions.

• Organizational changes empowered regional teams, enhanced customer-centricity, and refined regional structures to improve responsiveness.

• Early operational improvements included enhanced customer service, supply chain, and quality management.

• Sales revenue decreased by 9.5% in local currencies (12.7% in CHF) to CHF 9.6 billion, reflecting lower cocoa bean-related pricing.

Financial highlights

• Group volume decreased by 2.8% for the first nine months, but Q3 saw a 5.7% increase, marking a turnaround.

• Global chocolate volumes declined 2.3% over nine months, outperforming the market's 5.6% drop; EMEA/AMEA grew over 10% in Q3, North America improved sequentially.

• Global cocoa volumes fell 4.9% in nine months, but surged 18% in Q3 due to market correction and restocking.

• Completed EUR 849 million bond buyback, reducing gross debt and future financing costs, with an upfront cost of CHF 15-16 million.

• Sales revenue: CHF 9,557.1 million, down 9.5% in local currencies and 12.7% in CHF year-over-year.

Outlook and guidance

• FY 2025/26 volume expected to decrease by around 1%, at the upper end of previous guidance, with profitability and leverage guidance maintained.

• Expect mid-teens decrease in EBIT on a recurring basis in local currencies; net finance cost for the year projected at CHF 313-330 million.

• Volume growth of 1%-3% anticipated over the next 12-18 months; EBIT guidance for 2027 not yet provided.

• Plan to reach less than 3.0x Net Debt/EBITDA recurring, with ongoing deleveraging.

• Upfront cost of CHF 15 million from bond buyback expected, with partial EBIT recovery at profit before tax level.