Barry Callebaut (AO) | Reduce | Q3 volume growth seen amid market recovery

Research evidence excerpt

Barry Callebaut (AO) | Reduce | Q3 volume growth seen amid market recovery

Barry Callebaut Reduce | Target Price: CHF1000.00

Company description Management

Barry Callebaut is the world's biggest maker of cocoa and chocolate products. It Hein Schumacher, CEO

aims to grow its volumes by low- to mid-single-digit and EBIT by a mid- to high- Peter Vanneste, CFO

single-digit rate after a cost-cutting programme, supported by outsourcing,

Key shareholders

market share gains, and gourmet/specialities expansion. The company has taken Free float 64.90%

a leadership role in the development of sustainable cocoa, which we expect to be Jacobs Holding 30.10%

a key strategic advantage in the future. Renata Jacobs 5.00%

Investment case Valuation methodology

The profit warning is going to weigh on confidence. We use a mix of absolute and relative multiples compared to

The market has become more competitive, particularly in the peers in food and ingredients as well as a DCF to reach our

high margin gourmet business, amid the decline in cocoa prices. target price.

Branded chocolate players are not yet restocking despite the Our DCF assumes 3% medium-term growth, 2% terminal

cocoa price decline. growth, and an 8% WACC.

Catalysts Risks to our rating

Recurring operating profit remains weak. Quick rebound in profitability.

Decline in cocoa prices does not lead to volume recovery at Cocoa prices rise again, knocking volumes and stressing the

chocolate makers. balance sheet.

Cocoa grindings data and results from FMCGs with high Long-term structural decline in chocolate consumption.

exposure to chocolate.

Key data charts

Price performance Sales split by region Sales split by division

SWOT analysis

Strengths Weaknesses

Biggest player in chocolate and cocoa products industry.