Barry Callebaut AG/ADR (BYCBF) June 2, 2026 Conference Transcript

Hello and welcome to the Barry Callebaut Focus for Growth Action Plan Media Call, which will be hosted by CEO Hein Schumacher and CFO Peter Vanesti. My name is Nadia and I'll be coordinating the call today. If you would like to ask a question, please press star followed by one on your telephone keypad. I will now hand over to your host Hein Schumacher, CEO, to begin.

Please go ahead. thanks nadia and good morning to everyone i hope that you all had an opportunity to watch our on-demand presentation earlier this morning as you've seen with focus for growth we are making some clear choices in the company we are strengthening our fundamentals which is something that we've been on since the start of my tenor we're focusing our resources behind fewer priorities and we are stepping up our positioning as a solutions provider whilst making a clear shift to more premium segments. With all that and I can talk about it for a long time of course but we are very much looking forward to your questions and discussions so please handing it back to you Nadia to get us started on the questions that may be there.

Great thank you. Great thank you if you would like to ask a question please press star followed by one on your telephone keypad. If you would like to remove your question please press star followed by two. We ask you pleasing yourselves to two questions. We have a question from Paolo Lugiani of Rooters. Paolo, please go ahead.

Hi, good morning. Thanks for taking my question. Thanks for organising the call. I had two questions. The first one was regarding El Nino and I wanted to understand if you could give us at least a ballpark estimate on how you think this will affect the price of cocoa beans and more broadly global crops when when it actually eats and the second question is regarding products with a reduced cocoa content and i was curious to hear if you will keep producing this product even if the price of cocoa for the time being is getting it's getting down it's getting cheaper and again thanks a lot for for your time thanks uh that is um i mean first of all on el nino and um you know with

over the last couple of years and you know you're undoubtedly aware of the incredible spike that we've seen in cocoa prices a few years ago and that wasn't solely caused by el nino but it was certainly a an important part of that so clearly there is a yeah there is a high correlation there we're seeing for for this year we're seeing a strong el nino but it needs you know we need to await the impacts and usually by the end of june and july you sort of know what what that's going to what that's going to lead to um because you know what happens after a stronger linear we would see normal we would see much higher than normal rainfall in you know in areas where we source for example in ecuador and we would see much higher temperatures in for example west africa and that's still an area where you know roughly 60 percent of the of the beans are coming from so you know this is something that we are very cautiously uh observing we're very careful this call is being transcribed we're very careful um and uh you know when we uh talked for example about our volume predictions for next year we we you know we we're taking this one into account we don't expect uh prices to shoot up to the extent that we've seen over the last couple of years. That is not the prediction. But, you know, an LNEO could have an effect that could lead to, you know, a few thousands per ton. So, you know, we're just careful about it. And you can draw a straight line between LNEO and bean prices, but there is certainly a significant impact. I think your second question, but let me try to understand if I got it right, was around cocoa replacements and non-cocoa solutions, correct?

I was wondering if you will keep... Yeah, can you hear me?

Yeah, I can hear you well.

Okay, great. I was just wondering, the question was about whether you will keep producing products with a reduced cocoa content, even if the price of cocoa is going down, and what is the appetite for this type of product?

Thanks for I'm not sure if you've seen obviously the presentation of this morning. But, you know, we want to be actually very explicit about it. In our ambition, our overall ambition as a company, we are very keen to offer a full portfolio of what I would call chocolatey solutions. You know, and that means everything chocolatey, which is chocolate in itself and cocoa butter solutions, but also cocoa coatings, powder solutions, as well as non-cocoa solutions. And non-cocoa solutions have two components. it in the way i look at it one is more near term and to that extent we have a partnership with planet a foods that you know there were a number of partnerships that we have but we made a better and a clear choice for for this one which is that it replaces cocoa beans with sunflower seeds and we believe from a take we believe that from a taste perspective as well as from a manufacturing perspective um that is uh as good as it gets so to say um and we are already delivering the first volumes out of that i mean for that i mean it's not massive in terms of our total of the volume you know for those three places versus the total that we supply but we believe that it can be meaningful uh over time and we just need to be ready for it that we want to be that provider you know offering that full portfolio and in addition you know and i've talked about that in the presentation we want uh offer specialties um you know to offer full solutions to customers So, you know, it's very important that we play sort of the whole chocolatey piano here. Now, besides the short term plan on cocoa replaces sunflower, I believe that in the long term, like for many crops or, you know, food, food ingredients, there may be self-culture solutions. And to that extent, we are also working with a few startups by now scale-ups to see, you know, what does that self-culture look like? And I believe that is promising, but it's not something that is near in. You know, it will take a number of years to mature and, you know, there's all the development needed. But we are keeping our eyes very open to that. So we certainly don't want to be lagging this. We want to be leading here, but we're not doing it alone. We're working with others to give us the necessary expertise and experience that they've gained so far.

Great. Thank you very much.

The next question goes to Anthony Myers of Coqa Radar. Anthony, please go ahead.

Okay, thanks. Hi. Fine. Thank you. Thank you for taking the question. A couple of very short questions. One on the gourmet category. Results were down 3.4% in April, your last financial results. My question is, how are you going to redefine gourmet positioning beyond fixing the price? And can you confirm that you have a new VP of Gourmet? Is it Dhruv Bhatia? And then I have a second question. I was at Sweets & Snacks just last week, last month, and I saw the two new innovations, Kakao Max, Joe Viva, and I spoke to your team there. And I just wondered if you have plans, Barry Calvo has plans to attend ISM in Cologne in 2027.

Thanks a lot, Anthony, for your questions. I mean, first of all, on Gourmet, but just before I go, I want to add something. And I think this is important for those who are still listening on the previous question. So my apologies for doing that, but I want to take the opportunity. We talked about cocoa replacements and it was a question on, you know, whether we see that growing in terms of, you know, given the price dynamics of the beans. I just wanted to add, the reason why we're pursuing multiple solutions on cocoa offerings is not just the price matter. You know, price is one part of it, but it could be overtime sourcing opportunities, it could be sustainability opportunities, it could be cost opportunities, it could be, you know, I think there are multiple reasons for us to look at that whole portfolio. It's not just a matter of price per se. I just wanted to add to that. I think, Anthony, on your question on gourmet, yes so we have a new person leading that for us you know globally i mean he come came from japan was the recently managing director of that area has great experience and has helped us a lot to to shape you know the strategy under focus for growth for for gourmet so i'm really excited about about that but i do want to make sure that in you know going forward as a company we will steer the business through regions so yes we have someone uh you know looking after gourmet on a on a global basis and for example looking after uh you know innovation opportunities and and so forth but uh the business is conducted in the regions and that's where the accountability sits now on gourmet which is about uh 50 14 percent of the volume of the of the group uh we do have some some some clear uh you know some some new priorities so first of all how do we position as well i think what's really important for us is the brand architecture you know and i talked about this at the end of the second quarter as well um obviously we're not a branded company but we do have propositions so um within our gourmet offerings we have super more super premium type offerings think of cacao barry think of uh you know the signature range under callabout we have a more mainstream offering um think of the callabout range in itself the eight series as we call it and then of course there are the regional offerings such as van houten in asia to give you one example so we just want to be sure on how we position you know price points and what type of customers that we that we address so that's number one number two um we are actually prioritizing gourmet um you know and more intentionally so when when it comes to capital and expenditure for example and you know we're having those discussions with the region we want to make sure uh that we prioritize this part of the of the portfolio third um if we felt that uh our inventory levels over the last year they were a bit on the on the low side so we haven't always been able to provide the customer service that uh that i think we should and therefore we've decided to increase on this particular segment you know to allow for more safety stocks to drive a better service overall and then finally on gourmet and i think this is really important you know we want to be a thought leader globally so I want to be super explicit about that and being a thought leader means you know we need to provide that recipe and from inspiration both offline through the chocolate academies we have 20 as you know but it's a it's a good global network but also online you know so that means AI type driven things but also our chefs being very active online as well and and here we have an opportunity I think where I think the sector overall is a bit underdeveloped I think there's a lot of opportunity to drive conversion to e-commerce sales more directly to some of the customers that we have, as well as in cooperation with our main distributors. So I think the online part, that's something that we want to invest in. So I hope I've given you a bit of a flavor on that gourmet was important, will be important, but we're more intentional about it. And we're making clear choices behind our brands, our propositions, our channels, yeah, and our inventory levels to drive service. Then on Cologne, we haven't, you know, I don't think, I wasn't there, but I don't think we have been present in there for the last couple of years. We know this is an important event and we're currently looking at our attendance for next year. So more to come on that.

All right. Okay. Thank you, Heinz. Thank you for that. It's really brilliant. Thank you. Have a good day.

The next question goes to Henning Holder of the Market and ZZ. Henning, please go ahead.

Yes. Hello. Thank you very much. I have two questions, if I may. First one, in the media release, you're speaking of a relentless focus to deliver a step change in customer service. And in the transcript, you say that you as a group faced execution challenges, which led to some volume shift in-house by certain large customers. That sounds like many things went wrong in the past. So can you a little bit elaborate what went wrong in terms of customer proximity and customer relationships in the past? and second question is um according your media release your assumptions are based on a oh sorry no this question was already asked the question is in the past barry kalabau has guided a medium term ebit margin of 10 i did not see a reaffirmation of this target in your presentation does this target still stand thank you thanks for the question so you know i you know as you say i I mean, as we said on customer service, and I think if I look back on the announcement

that we've made by the end of the second quarter, you know, I feel that our customer service was simply not at the right level. You know, in many cases, it was around or even below 80 percent on time in full deliveries. And, you know, I'm not looking back to the past on what went wrong or whatsoever. But, you know, there was a I would say there were a lot of initiatives going on in the company related to next level with all the right intention but i think it was a bit much in combination with um you know some quality issues that we had in our main factory so for example in reason a couple of years ago but also in st high since in canada and if you have some quality incidents and in you know at the same time pursuing a giant transformation and then of course we have the volatility in demand given the the high cocoa of the high copper price volatility yeah the combination of that is pretty tough to manage. And, you know, that I think overall has led to a lower customer service than our customers should expect from us. This is something that I feel customer centricity has to be priority number one, two and three for us. And therefore, I already hinted, you know, to slightly higher safety stocks in Gourmet. We're also investing in capacity and in the right capacity here, as well as we're investing in our core processes that I talked about you know we cannot we can only do so many things but our corporate processes around planning and around service deserve the highest attention and this is not something that will improve uh you know to you know the the highest level overnight uh but absolutely determined to get this right in the years to come and that we can be that reliable partner that everyone will be looking for so that that's it i think about relentless focus and then you know secondly on the EBIT margin, I am tempted to give that question to Peter, because he's the right person to answer.

We have indeed, thanks for the question, we have indeed expressed this 10% ambition in terms of EBIT. The main thing to remember behind that is that we are very convinced, and we still are, that there's an important step change that we can make with this company, building on volume growth, building on premiumization, building on cost leadership. um we've been you might have noticed we've been a bit less explicit about the percentage as such mainly because our of our cost plus model you know we we used to have you used because it's percentage of a net sales we used to be an 8 billion net sales company and then we became a 15 billion net sales company simply by pricing through all these commodities and you can imagine that 700 million profit out of 8 billion is a very different number percentage than 7 700 million out of 15 billion. So the percentage has gone down over the last few years, percentage EBIT over net sales. It will go back up significantly as the B-press are normalizing, as our pricing is normalizing. So we'll be, you know, we went back to 66% of the last year and we will climb back up.

I'm not going to quote a specific percentage for the plan because again, that really depends on the actual B-press and the net sales number. um i hope that's clear fast all right thank you very much the next question goes to isabel demetz of bloomberg isabel please go ahead hi good morning uh two questions from me as well um the first one is um when do you expect a rebound in consumption in chocolate demand and how does that play into your revised guidance also taking into account uh potential Middle East disruptions. And the second one is you've mentioned that you're planning capacity expansion. You've given an example of your plans in North America. I was curious to hear more about your plans in emerging markets where that is happening. If that's also like if your capacity expansions there are also focused on expanding your premium businesses. And yeah, that's it.

Thanks, Isabel. Look, I think on the market and on the rebound, you know, a few points to that. I mean, first of all, we've guided for this year on our volume development that in the second half, you know, sort of starting in March, that we will actually be growing. And, you know, so far, obviously, I can't comment on the third quarter, even though it ended for us on Friday. But, you know, we are on track on, certainly on track on that. So we do expect some recovery already in the market. It's somewhat in the market this year. But, you know, I think we can grow, you know, we can grow ahead of that to some extent. For next year, we expect 1% to 3% growth overall. So, you know, we've said that in our, I think, the press release as well. And we believe there is a 2% to 4% growth for us in the medium term. Now, that's not the market. So then to, you know, to exactly your question, we expect chocolate confectionery to grow, you know, 1% to 2%, but initially more around the 1%. And there's some uncertainty around that. So, for example, you know, prices have gone up by 50% over the last three years. To what extent will Nova Bean prices, you know, will that translate into lower prices to the consumer? To what extent does the consumer have disposable income? I mean, think about all the fuel increases right now and, you know, how are they going to spend their money? And, you know, and we see overall, we see a trend towards, you know, strong premiumization globally. And, you know, in some markets that's, for example, driven by GOP-1 in the U.S. and some other markets is just a disposable income matter. And when people premiumize, that's a great revenue opportunity, but it can subdue volumes a bit. And that's OK for us. You know, I think, you know, it's not just the volume play. I think we need to be as a company, we need to look at both. Obviously, volume is helpful, but at the same time, we want to make sure that we drive value accretion as well. um um yeah then a second point i mean to the overall volume uh development as i said you know um one to three percent for us but the overall chocolate confectionery market one to two percent we believe though that you know chocolate is used not just in chocolate confectionery but also in adjacency so think of protein bars or think of um um you know ice cream think of other snacking opportunities and we see those adjacencies where chocolate is used as a meaningful ingredient we see that we see those areas growing faster I mean think of ice cream it's usually around two to five percent sorry two to four percent we see energy bars and proteins even above four percent so we just need to make sure that we get the right solutions for those type of market segments as a company and that's really what we're focusing on I think on the Middle East wanted to add a few words um you know look the middle east is a is a partially it's a it's a market for us so you know we're seeing lower demand in the last couple of uh yeah the last couple of weeks but that's not having material impact on the group um that's just because of tourism you know coming down and so forth although we're seeing activities in the in the uae for example getting back to some extent but not to the level that we've seen before but i think the main impact from the middle east without the same adapt to the fuel impact and that has a direct impact on our operations and an indirect impact you know as i said on demand and and so forth and that i think that's probably the main worry for us when we look into 20 fr 27 when it comes to the cost level overall and that's something that we need to look at to what extent we can offset that and want to offset that then of course on your question on on on capacity and emerging markets um no here we just need to be very choiceful you know i love um the opportunity and some of the emerging markets having great experiences with it but you can't uh you can't boil the ocean here so we need to be very choiceful and in our what what we've said earlier this morning that in the mix of our 10 key countries in which we want to invest globally and have the first call on resources um and that's around two-thirds of our volume those 10 countries and more than two-thirds of our profit um you know So Brazil, Indonesia, China, India, you know, they are, I would say, the four emerging markets and they are very big ones that we want to call out and where you can expect us to make investments in the near term. We will be mindful, therefore, and be, you know, very judicious on that. You know, it's those four countries that I'm really keen and beyond that, we want to be Thank you.

We have no further questions. I'll hand back to Hein, CEO, for any closing comments.

Thanks, everyone, for joining today. And we look forward to more exchanges in the weeks, two and months to come. Really appreciate your interest in our company.