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Barry Callebaut has forecast operating-profit growth below market expectations after increasing the cocoa-price assumption underpinning its new financial-year outlook.
Higher cocoa assumption weighs on outlook
The Zurich-based chocolate and cocoa supplier said recurring operating profit, or EBIT, is expected to rise by 3% to 5% in constant currency in its 2026/27 financial year. That falls short of the 5.5% growth analysts had expected in the company’s consensus forecast.
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The group is now assuming an average cocoa-bean price of £4,000 per tonne, compared with roughly £3,000 per tonne assumed in July. Cocoa futures had fallen from historic highs, but remain elevated amid concern that El Niño weather conditions could damage West African output.
For Africa, this matters well beyond the balance sheet of one Swiss company. Côte d’Ivoire and Ghana sit at the centre of global cocoa supply, and prolonged price volatility shapes export earnings, government revenues, farmer incomes and the costs faced throughout the chocolate supply chain.
Volumes recover after difficult year
Barry Callebaut’s sales volumes slipped 0.7% in the year to August, to about 2.1 million tonnes. However, volumes rose 5.7% in the fourth quarter, matching third-quarter growth and signalling a recovery after a prolonged downturn.
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The company reported that revenue fell 15.2% in constant currency to CHF12.2 billion, largely because cocoa-linked selling prices were lower than a year earlier. Recurring EBIT declined 14.1% to CHF604.5 million in constant currency.
Management said the fall reflected, among other factors, a temporary long position in its Gourmet business during declining cocoa prices, lower pass-through of financing costs and supply disruption costs. The company said that Gourmet volumes grew 13.6% in the fourth quarter as customers responded to a new pricing cycle.
Debt reduction offers resilience
Despite weaker profits, Barry Callebaut generated CHF2.01 billion in free cash flow, compared with an outflow a year earlier. Net debt fell 42.5% to CHF2.47 billion, reducing its net debt-to-recurring EBITDA ratio to 2.9 times from 4.5 times.
The group expects 1% to 3% volume growth in 2026/27 and says recurring profit before tax should rise by around 30%, aided by lower finance costs and productivity measures.
Its outlook also includes an estimated 1% hit to group volume from the transition ahead of the expiry of its current commercial agreement with Hershey at the end of 2027. Barry Callebaut said the expected profitability impact would be neutral.
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The figures show a company restoring volumes and strengthening its finances, but still exposed to cocoa-market uncertainty. For producing countries in West Africa, the outlook is another reminder that high bean prices do not automatically translate into stable, widely shared gains across the cocoa value chain.