Swiss chocolate maker Barry Callebaut expects its recurring operating profit to grow by a mid- to high-single-digit percentage in local currencies over the medium term, it said on Tuesday as part of the first strategy under CEO Hein Schumacher.
The market was expecting the former Unilever chief executive, appointed by Barry Callebaut in January to replace Peter Feld, to deliver clear financial targets for the company that last month cut its operating profit forecast and said it expected volumes to fall between 1% and 3% in the current financial year.
It confirmed those targets on Tuesday.
Outlook Might Weigh On Market Estimates
One of the world’s top cocoa processors, which supplies key food producers such as KitKat maker Nestlé, forecast medium-term sales volume to rise by 2% to 4%, without providing a more detailed time frame.
The company, which buys cocoa beans that it processes into cocoa butter and powder, added it expected volume growth to be between 1% and 3% over the next year to year-and-a-half.
In this period, Barry Callebaut will have some hurdles to clear as it faces customer insourcing, said Jon Cox, head of Swiss equities at Kepler Cheuvreux.
“Potentially investors were looking for a bit more and I assume estimates may come under pressure,” Cox added about the medium-term guidance, although he noted that Barry was focused on improving profitability faster than volume.
A company-provided consensus showed that analysts were expecting volumes to grow 4.1% in the upcoming fiscal year through August 2027.
Read More: Barry Callebaut Slashes Profit View On Cocoa Overcapacity, Supply Troubles