Barry Callebaut AG reported a return to quarterly volume growth in the third quarter of fiscal 2025-26, but the world’s largest chocolate producer cautioned that overall volumes for the year will still decline and that recurring operating profit is expected to fall by a mid-teens percentage.
For the nine months ended May 31, group sales volume amounted to 1,557,239 tonnes, a decline of 2.8% compared with the prior-year period. The company highlighted that the third quarter alone saw a 5.7% uptick in volumes, which it linked to several factors: elevated demand in its Global Cocoa business following an earlier market correction, continued momentum across Asia Pacific, Middle East and Africa (AMEA), and steady progress in restoring service levels in North America.
Sales revenue for the nine-month period fell to CHF 9.56 billion from CHF 10.95 billion a year earlier. Barry Callebaut attributed the revenue decline to lower volumes and a pronounced reduction in cocoa bean-linked pricing after terminal market prices for cocoa dropped by an average of 47% against the prior-year period, finishing the nine-month span at GBP 2,954 per tonne.
Chief executive Hein Schumacher said the group was "encouraged by the return to positive volume growth in the third quarter," and added the improvement "partly reflects early signs of stabilizing fundamentals and service levels in North America." He cautioned, however, that "the chocolate market remains challenging and our improvement will be gradual."
Breaking down volumes by segment, Global Chocolate volumes were down 2.3% across the nine months but recorded a 3.2% rise in the third quarter. Regionally, North America experienced a 7.6% decrease over the nine months as supply disruptions and weak market dynamics weighed on performance, although volumes in that region did turn positive in the third quarter. AMEA stood out as the strongest regional performer, with volumes up 10.3%.
The Global Cocoa business saw volumes decline 4.9% for the nine-month period, but momentum accelerated markedly in the third quarter where volumes grew 18.0%. Management pointed to demand for cocoa powder in Latin America and Asia and to one-off cocoa butter opportunities as drivers of the third-quarter strength in the cocoa division.
In June, Barry Callebaut completed a bond buyback covering €849 million of outstanding senior guaranteed euro-denominated notes. The company said the operation incurred an upfront cost of approximately CHF 15 million in the current fiscal year.
Barry Callebaut described the buyback as supporting its objective to reduce gross debt. The group reiterated a target of reducing net debt to below 3.0 times recurring EBITDA, a target set on a working cocoa bean price assumption of around GBP 3,000 per tonne.
Looking ahead to fiscal year 2025-26, the company expects overall volumes to decline by approximately 1% and reiterated guidance for a mid-teens percentage decrease in recurring EBIT measured in local currencies.
On market context, the company cited Nielsen data indicating the global chocolate confectionery market contracted by 4.4% in the third quarter, and said it expects recovery to be gradual.
Implications and context
The third-quarter rebound in volumes signals an easing of some of the operational and demand pressures that weighed on Barry Callebaut earlier in the fiscal year, particularly within its cocoa operations and in certain regional markets. Nonetheless, the company’s full-year outlook remains constrained by lower overall volumes, sharply lower cocoa-terminal pricing compared with the prior year, and a planned reduction in recurring operating profit.
Management actions such as the bond buyback indicate a focus on balance sheet repair and leverage reduction amid volatile commodity pricing.