Petras Concilia's questions to Barry Callebaut AG/ADR (BRRLY) leadership • Q2 2016
Question
Petras Concilia of ATF asked for an explanation of the challenging cocoa market situation and the company's outlook for its cocoa business.
Answer
CEO Antoine de Saint-Affrique explained that the "combined ratio," the relative price of cocoa powder and butter, has been at a historically low level, impacting industry-wide profitability. He noted the company is implementing measures to become less dependent on this ratio. CFO Victor Balli added that overcapacity, particularly in Asia, combined with slowing demand, drove down prices. He stated the market is gradually improving as capacity is reduced and some smaller players struggle.