Barry Callebaut Earnings: Gourmet Growth and Resilient Margins Due to Cost Plus Pricing Reassuring

Barry Callebaut reported half-year fiscal 2024 results. Volumes were up 0.7% in the first half (up 1% in the second quarter) for the group and up 1% for the global chocolate business ahead of a challenging and, overall, declining chocolate confectionery market (down 2%, according to Nielsen). Volume growth was positive across most regions, with Western Europe (up 2.2%) compensating for lackluster performance in North America (down 1.9%) thanks to business coming from the consumer shift to private-label products and strong gourmet demand (volumes up single digits). Revenue was up 11.1% (up 19.6% in local currencies), driven by a significant increase in cocoa prices. Gross profit was flat, a testament to the group's resilience in inflationary environments due to its cost-plus pricing model. Operating profit was up 7.9% in local currencies (down 2.6% in CHF), well ahead of volume growth, but this was the result of a pass-through of higher financing costs that are offset below the EBIT line. Net profit for the period was up 0.8%, in line with volume growth, and reflects the group's ability to protect margins through its cost-plus model in times of inflationary pressures.