Barry Callebaut fiscal half-year results – summary
- Net profit jumped sixty six percent from lower tax interest costs
- Operating profit declined four percent reflecting volume drops supply disruption overcapacity
- Sales volumes still fell but decline eased sequentially during second quarter
- Growth returned in AMEA and Latin America outperforming mature Western markets
- Strong free cash flow strengthened balance sheet enabling rapid deleveraging focus
Barry Callebaut Group has released its fiscal half-year results for 2025/26 and, well, the results are decidedly mixed.
At first glance profits look strong, but closer inspection tells a very different story.
Profits up
The world’s biggest chocolate supplier saw an impressive 66.1% jump in net profits, though this was helped by lower interest and tax costs.
Profits before tax also went up (+1.3%), as savings on financing costs outweighed weaker operating performance.
All this helped towards the generation of CHF 801.8m (€869.8m) in free cash flow for the business to plough back into operations for the future. Although falling cocoa prices and Barry Callebaut’s increased focus on operational and financial efficiency, known as BC Next Level, also played a major role.
Having said that, operating profits (EBIT) slid by 4.2% in the first half of the year, with the company blaming “volume decreases, supply disruption, and a competitive overcapacity market”.
Sales down
While profits are mostly up, its the consistent sales decline that’ll likely be sounding alarm bells at the company’s Zurich headquarters. Even so, there have been admirable efforts made to put a positive spin on the situation.
“Group sales volume improved sequentially in Q2 to -3.6%,” the company said in a statement. This is in comparison to -6.9% in H1. In other words, yes sales are down, but they’re less down than before.
Interestingly recovery, says Barry Callebaut, has been driven by a return to growth in AMEA (Asia Pacific, Middle East, and Africa) and Latin America. This reflects stronger demand in less mature chocolate markets, where consumption growth and foodservice recovery have helped offset weakness in Europe and North America. For the industry, it underlines that volume recovery is likely to be led by emerging regions rather than Western markets.
Outlook changed
The Swiss-Belgian cocoa processor and chocolate manufacturer has adjusted its full‑year outlook down, now expecting sales volumes to fall by 1–3% over the year. But, it does anticipate a return to growth in the second half of the year.
Added to this, operating profit is forecast to decline by a “mid‑teens percentage”, although most of this drop is expected to be offset before tax.
The company’s also keeping a close eye on events in the Middle East, as any further disruption could impact supply chains and operations, and could result in a further downgrading.
Despite the inevitable spin, new CEO Hein Schumacher was refreshingly honest in his statement on the earnings report.
“We have significant work to do to reinvigorate the company after a turbulent period of industry disruption and transformation. We need to restore fundamentals, step-up service levels and empower our regional businesses,” he told company employees and investors.
He went on to say that the drop in cocoa bean prices are “encouraging” for the industry, and to reinforce Barry Callebaut’s commitment to BC Next Level. “By focusing our people on impactful initiatives and reinvesting in a customer-centric winning culture, we will stabilise fundamentals, deliver on distinct growth opportunities and ultimately unlock strong financial performance.”
Looking ahead
Looking ahead, Barry Callebaut’s performance will increasingly be judged on execution rather than balance‑sheet repair.
While easing cocoa markets and improving financial conditions offer some support, turning tentative signs of stabilisation into lasting growth remains the central challenge, particularly in Europe and North America where demand is still under strain.
More broadly, the results highlight a sector adjusting to uneven global dynamics. Growth momentum is shifting towards emerging markets, while mature regions grapple with pricing pressure, excess capacity and cautious consumers.
Lower cocoa prices may ease near‑term cost pressures, but they’re unlikely to address the structural forces reshaping the chocolate market.
Against that backdrop, the next phase for Barry Callebaut, and the industry at large, will hinge on adapting business models to where sustainable growth can realistically be found.