Barry Callebaut changes CEO and cuts sales guidance

By Andrey Sychev and Paolo Laudani

(Reuters) -Switzerland’s Barry Callebaut, the world’s biggest chocolate maker, on Wednesday appointed Peter Feld as its new chief executive and cut its full-year sales guidance as inflation-hit customers reduced purchases.

Feld succeeds CEO Peter Boone, who is stepping down for personal reasons, with immediate effect, the company said. Feld previously held the top position at Jacobs Holding, Barry Callebaut’s biggest shareholder.

Barry Callebaut has suffered as consumers tightened their belts due to sky high inflation in some markets. As a result,the company has cut back the amount it is investing in the business and reduced its sales guidance for the fiscal year to end-August by more than analysts had been expecting.

“We chose a prudent approach in the current market environment, reflecting a slightly lower capex,” Chief Financial Officer Ben De Schryver said on a conference call with analysts.

The chocolate maker forecasts full-year volume growth to be “flat to modest”, De Schryver said, down from the 5% annual growth that was expected previously.

The 2023 guidance reset was not surprising but “the magnitude of the downward revision is significant”, according to Vontobel analyst Jean-Philippe Bertschy. 

The market expectation was for the sales forecast to be cut to 3%.

The Zurich-based firm, which supplies chocolate for Magnum ice creams made by Unilever and for Nestle’s KitKat bars, said sales volumes in the six months ended Feb. 28 fell 2.9% to 1.13 million tonnes.

However, the pace of decline has moderated, with sales dropping 0.5% in Q2 compared with a 5.1% plunge in the three months to end-November.

Apart from inflation, volumes were also hit by destocking in North America as the post-pandemic demand surge fades away.

Nevertheless, the firm expects improvement in the U.S. market, where “people are going out, travelling, buying desserts and bakery, so overall it is quite resilient over the longer term”, De Schryver said on the call .

Barry Callebaut shares opened down about 2%, but recovered to be flat at 10:00 GMT.

(Reporting by Andrey Sychev and Paolo Laudani; Editing by Jamie Freed and Sharon Singleton)