High cocoa prices melt Barry Callebaut profit

The world’s largest chocolate producer, Barry Callebaut, saw its sales volume fall in the first half of its 2024/25 financial year, while turnover boomed and profits got slashed. The cause of all this is the explosion in the cocoa price, which almost doubled in one year.

Lower volume despite sales growth

Barry Callebaut sold 4.7 % less chocolate in the past half of the year. Volumes fell sharply, especially in Western Europe (- 7.6 %) and Central and Eastern Europe (- 6.6 %). Nevertheless, turnover went up by a whopping 63.1 % to 7.29 billion Swiss francs (7.7 billion euros) as the producer was able to pass on (most of) the price increase to customers.

However, this was not fully successful and certainly not immediately, which resulted in a major blow to profitability. Net profit more than halved to 30.5 million francs (32 million euros), a decrease of 60.2 %. As the value of the cocoa stocks also doubled, the interest charges alone rose from 72.1 to 196.7 million Swiss francs (210 million euros).

Cautious optimism despite chaos

Meanwhile, Barry Callebaut is continuing to cut costs, closing four factories. The target of 250 million Swiss francs in annual savings remains in place, although full effect of the measures may not be visible for another twelve to eighteen months.

At the same time, Barry Callebaut is planning capacity expansions in North America and Southeast Asia. A new site has been started in Brantford (Canada), as well as a factory in Neemrana (India). The cocoa market remains extremely volatile, which is why the company expects significantly higher EBIT for the full financial year, but around 5 % less volume.