We're delighted to welcome Barry Callebaut back to Boston, and welcome Hein Schumacher, Chief Executive Officer of Barry, the world's largest B2B chocolate and cocoa ingredients company. Since joining earlier this year, Hein launched the Focus for Growth strategy, and Q3 marked a return to volume growth, I think for the first time in two years, helped by obviously improving execution and a slightly more supportive demand environment. Clearly, at the same time, there are some challenges. Cocoa prices remain pretty volatile. There's some concern over El Niño, which perhaps we can touch on. I guess investors are debating the pace of recovery and the pathway back to historic profitability. Hein, you bring obviously a unique perspective, having led many of the world's largest food businesses. We're delighted to have you here today. Maybe we could start at the highest level. When you arrived in February, what did you diagnose as the key issues facing Barry Callebaut, and what are the two or three most important things that Focus for Growth is designed to fix? It's great to be here, Alex, and good to see you again. I think for me, the first one was, I would say, dilution of our resources, whether it was capital, whether it was operating expense and investment, or whether it was people. There were not really clear priorities in the group. A transformation had started, but it consisted of many different initiatives. I felt there was an absolute opportunity to prioritize, which I'll come to in what we did. The second thing was, I felt that our fundamentals were not in order. Customer service levels were too low. Our deliveries on time, in full, which we measure, of course, were not in order. Our customers, as a result, were not super happy. Then third, was all about quality. We'd had some quality scares in our major factories, the largest factory in Belgium, that was already a few years ago, but also at the end of 2025 in Canada, our largest site for North America, and a big site in Mexico. There was sort of a priority question, service and fundamentals to customers, and then something that you need to get right in food always, and that's quality. In Focus for Growth, we addressed indeed all of them, and it's all about prioritization. First, we focus our resources on 10 important countries. Not the whole world, 10 important countries. Within those countries, we focus on two important segments. One is what we call gourmet, which is the highest margin business, and that's particularly for chocolatiers, for hotels, for restaurants and so forth. We are focusing much more on what we call providing solutions. That's not just chocolate, but also specialties like nut specialties, fillings, caramel fillings, for example, inclusions like soft baked inclusions that you would find in ice cream and so forth. That will lead to margin accretion for us, and it focuses us much more on segments where we can really win. Priority was number one in Focus for Growth. Then restoring fundamentals. Instead of doing many different things, I had to make an intervention on quality investments, and making sure that that is a non-negotiable in the company. Absolutely not. Since then, the good news is you have seen quality incidents really coming down. That's good, and I think it's something, it was self-inflicted, and I wanted to have people really on two or three big fundamentals, restoring service, restoring on time, in full, restoring quality credentials. I think that's working. But if you would ask me, it's about priorities, fundamentals, and then, of course, the execution that the company had lost a little bit. But those are the big ones. Makes a lot of sense. As we think about that execution piece, I think a couple of weeks ago, you recently announced the appointment of Thomas Gaengler as COO of the company. He obviously comes from Mondelez. Yeah, our largest customer. Yeah. Maybe you could talk a little bit about what he's bringing and what his role is going to be. Yeah. Sure. I think the way to think about it is, we went from strategy, the action plan that I talked about. Priorities plus fundamentals. That was number one. Then second, we had to address structure. The structure of the company was quite hybrid. Some things were global, some things were very local, and some things were regional. But it lacked a clear accountability focus. We have put the accountability back to regional leadership, because ultimately food tends to be quite local. So reduced the number of global headcounts quite significantly and moved that to regional responsibility. The third lens, of course, after on strategy and structure, is the people lens. Yeah. T hat is what we are really in the middle of. I felt that we needed a change in our supply chain. That is the reason that customers come to us. If we do not have service on time, in full, and quality right, that is a problem. I felt that a change was probably appropriate for the next phase. Thomas is very experienced, coming indeed from our largest customer, so that was a good conversation with them to have. But they were very happy, eventually, that he will lead our operations and service them really very well. He is very experienced. He knows the industry really well. So I was really glad to have him. Makes a lot of sense. On the people side, you brought it up there. Barry Callebaut has been through quite a lot of disruption over the past five years. We had COVID. Yeah. Cocoa crisis, quite a few changes in top leadership. How do you ensure, I guess, buy-in from the broader organization for Focus for Growth in that context? Yeah. I think it's absolutely critical, and we've seen indeed in the last couple of years there was quite a bit of attrition. I think first of all, we created the action plan or the Focus for Growth plan. It was a co-creation with people. There had been many consultants in the company. We've said, "Hey, we stop that." We made the plan with 30 people in the company, not my direct reports, but actually a layer below to make sure there was buy-in. We focused our priorities, as I said, and we converted those priorities into personal objectives for people. It was something that was new for them, and we started with that on the 1st of September, a couple of days ago into our new fiscal year, so that people are really clear about what needs to be done. As you said, we make a few changes, but I'm really looking for solutions inside the company. There's a lot of knowledge there, but we need to get people into that, "Hey, this is what you're accountable for. These are your priorities." I think that requires quite a bit of what I would call cultural change, but it's essentially it's about behaviors and it's about making sure that, not saying I can't tell you what you should not do, but I can tell you what's really important. It's starting to work, but it will be a multi-year journey to get everyone in that mode. Makes sense. You touched on it. Part of the strategy is evolving from being, not just a chocolate manufacturer, but becoming a solutions partner. Provider, yeah. What does that actually mean in practice? I guess, how different could that make Barry Callebaut look in five years' time? Yeah, no, I think this is a very fundamental choice. Let me explain it with ice cream. It is a sector that I know well, obviously from my own past. If you take a segment like ice cream, we are doing business with 10 out of the largest 10 ice cream producers in the world. So with all of them. It is not just about chocolate that performs under frozen temperatures, but actually if you could say, "Hey, here is your chocolate, but I also give you caramelized nuts. I also give you fillings in your ice cream." Think of a Magnum or think of a Ben & Jerry's because that is the brands that most people know. If you take a Ben & Jerry's, you have chunks in there, and many of them are chocolatey flavored. Some of them are not. But we give a total solution. We provide chocolate, whether it is nut solutions, filling solutions, inclusions in the ice cream, and then you say, "Hey, here is the total package." Actually, we start innovating with that and how these flavors can come together. I am super excited about that because it is not only stickiness of customers, but it also helps us to drive margin accretion over time. It is a value-added strategy, and yeah, it is growing well. We just need to choose wisely which segments we want to provide these total solutions to because you can do them all. Ice cream is an important one for us. The other one is bakery. It is exciting. If you look at bakery in retail, private label is gaining a lot of share, and if, for example, in the U.K. we are working with a chain like Marks & Spencer. We are selling a lot of the private label chocolate in the U.K., and we started from a normal biscuit. We added chocolate coating, and now there is layers and fillings and pistachios, and it enhances the value in the category, but it is also good for us in terms of what we can offer to the customer. I am very excited about this route. Nice to hear. It is not a one-year strategy, obviously, but if we are sitting here in one year's time, hopefully we are. What are maybe two or three things that investors should be looking at to decide whether Focus for Growth is working? Yeah, no, absolutely. Number one, we do need to grow our gourmet business faster than our average. So for sure. Because that's an absolute focus point because it has the highest margin in the company, and we want to make sure that we grow that faster. So that's one. Secondly, we need to grow our specialties, the ones that we choose to win in the segments that I talked about. They need to grow much faster than the average in the company. That's two. Third, I want to make sure that our top 10 countries, about 2/3 of our global business, grow faster than the average of the company as well. That's the growth part. The second one is, I want to make sure whether if you can see if it's working, our service levels have to go up, and we will report about that, what it was and where it is. That should result in a higher market share. Now, if you think about it, in last quarter, we reported growth. The sector was quite a bit down, so we are taking share. Yep. The fourth quarter, which I cannot comment on because it's finished a couple of days ago, but we implied growth in the fourth quarter given our full year guidance. That also suggests we're taking share, and that's something that I would like to see in a year's time as well. Okay. Yeah. Our profit should grow faster than volume growth as a result of all of that. Makes a lot of sense. Maybe turning to the here and now, you touched on Q3. Right. Implied outlook for Q4. The business did return to nice volume growth in Q3, but I think you cautioned a little bit that the underlying chocolate demand. Environment was still quite weak and maybe there was an element of stock or comps from last year and maybe a stocking up. But what gives you sort of the confidence in the sustainability of the growth in obviously in Q4, but out into next year as well? I think it's really important, so let me take a step back first. Over the last three years, if you look at the numbers, prices have gone up in a little bit over three years by 50% g lobally. Volumes globally are mid-single digit, down by 5%. In a way, that's already pretty resilient. Yeah. At the cocoa price level that we are today, which is about $4,500. We believe that from what I can see is that prices, because of hedges that were taken, those levels are already priced in. We see now for the first time, the latest Nielsen reports, we see prices coming down a little bit in Western Europe. First of all, at the moment, I don't see that there will be more price increases coming. I think there will be moderation or even decrease. That's number one. Second, as a company, we are only, well, it's a lot, but we are only around 40%, 45% exposed to classic chocolate confectionery. The majority of our sales is actually where chocolate is an ingredient. So in bakery, in ice cream, in protein bars, in granola. Those segments are actually growing. We clearly see that in our sales numbers, where we're growing in those segments faster than, let's say, in the classic confectionery only. So that's an internal point. Yeah. F inally, as I said, we are focusing our efforts on higher value-added segments, so the gourmet segment as well as the specialties. But gourmet, when people tend to eat less chocolate, for example, in the U.S. because of GLP-1, we see people snacking less, but they tend to go to higher quality solutions, and that's where we are usually disproportionately, we have a higher share than our competitors. So I feel good about that. Makes sense. You touched upon service levels as a KPI that you're going to report on. Yeah. It's clearly a big opportunity. How much of the 2%-4% medium term volume growth algorithm that you're targeting could come through simply as a result of taking back market share that you maybe lost because of those services? Yeah. How much visibility does that give you? As I said, if you take the different category or the different chocolate confectionery categories plus the other ones that I talked about, that should take care of growth of around 2%, we believe, globally. Then, the taking market share is the next step, and that should come from restoring fundamentals. We're doing that now, and I feel that that will certainly be a source of growth, also in the 2%-4%. To be exact, is it 1%? Is it 1.5%? It's helping and customers want to work with us. So, yes, that is definitely part of it. We are assuming market share growth. Yeah. Is that primarily a North America phenomenon in terms of where the service levels have dropped and need to be improved? We had it pretty much in our main markets in Europe as well as North America. North America, it was stickier. We are investing in our largest site in Brantford, in Canada at the moment. It is a very new site. We are de-bottlenecking on compound production. I do not know, if you knew, but our customers, they are making a choice. Do you buy chocolate? Yeah. Buy cocoa butter solutions or compound solutions? Because of the cocoa crisis, many have shifted to compound solutions, but our capacity did not hold up for these evolving customer needs. Right. What we have done in the last couple of months is very quick de-bottlenecking in those areas where our customers were actually going. Therefore, I feel it has gotten a lot better. It is percentage points better than where I started. But in North America, I feel we still have steps to take and we can grow further. We are not perfect yet. In the other regions, it is a better picture. Good to hear. Historically, outsourcing was a big growth pillar and part of the strategy for Barry Callebaut. It didn't make as much a feature in your Focus for Growth strategy. That's right. Perhaps because of where we are with the service level side. Thinking long term, maybe beyond Focus for Growth, is outsourcing still a material opportunity for Barry Callebaut? Or has the industry maybe changed how it thinks about outsourcing? No, it's a very good point. If you Many of the companies that are here, I want to be quite straight and direct. If you take our global top seven customers, okay? They are 25% of our chocolate volume. Okay? What we've said is, they have, because of the last couple, not just because of service levels, but because category was under pressure, they lost volume and the utilization in the factories came down, and therefore they have in-sourced. Yeah. That's happening, and I said, therefore, that is the group of companies who can actually in-source because of their scale. I said, look, that will bottom out in 2027 because once the capacities are filled and/or when the category is coming back, will they then invest in complete new factories for in-sourcing? I don't think so. We are better placed. We have those conversations, and therefore I think we assume, and I believe we will grow after 2027 with them. Right. That's comment number one. Then two, obviously, we're working a lot with the regional players. Regional companies, there's so many of them, and they are either taking share or retail, private label share. They are not outsourcing. They rely on us to do what we need to do. So I think outsourcing in a way is natural for them, and obviously we will grow with them going forward. I believe the large ones, if we innovate and come up with solutions that are outside of the basic products that they have, we're seeing that already now, they will also come to outsourcing with us. So, it's probably not the growth engine with the large accounts for the next 12-18 months, hence the lower volume projection, but for the company as a whole. But it will reignite behind innovation as well as production capacity after 2027 on the big ones. We will continue to grow with the regional players as well as through the gourmet and the specialty sections that I already talked about. Yeah, makes sense. I want to stick on gourmet, because clearly that's a big part of the strategy in terms of driving growth out performance there. It's historically been very nicely margin accretive for Barry Callebaut as well. Part of the reset on profit outlook for 2026, which came through earlier this year, was, if I understood it correctly, a mismatch between selling prices from some of your competitors and the decline in cocoa input costs. Yep. Maybe you could elaborate on that a little bit as to why you don't see that as a problem beyond this year. Yeah. Our gourmet business is critical. We've said it's a priority. I wanted to be very clear about it. What we've done in Q3 and what we've done in Q4 is, and I think we announced that with Focus for Growth, we said, "Hey, we're investing a bit in margin because we saw that we had longer hedges out there than others." I wanted to keep the customers with us, and that's what we've done, and that's what drove quite a bit of the growth in Q3. It will be an engine as well to some extent in Q4. Of course, our profitability is getting better when these hedges expire, and that's what we see happening. I think that was a good decision that we took. I think when you look at the next year, first of all, gourmet is all about availability. I felt that the service level on that was too low. I talked about that. By now, the service level has increased substantially, because we're treating it as a make-to-stock business and not a make-to-order business. In order to make it make-to-stock, we've really worked hard with the team to get to a core SKU list of around 200 SKUs of Callebaut brand and Cacao Barry brands, the brands that we have for the B2B market, and that's working very successfully. We've also made very clear tiering. We brought that back into the gourmet business. Our Cacao Barry is for chocolatiers and Michelin star restaurants, around 140 index, 145 price index. The same for the Signature Collection on Callebaut. The Callebaut selection made in Belgium claim is around 125 price tiering. Then we have our local regional brands like Van Houten. We have many of those, and I think we've been very clear on price tiering, very clear on the proposition and what they should bring. I'm super excited about the re-ignition of that business. It's also a bit closer to where I come from. That's working. I think that should be a great engine for us in 2027 as well as in 2028 and beyond. Besides all of that, we now need to get the innovation engine going behind it. Therefore, we've launched four big platforms, which I'm also excited about, and that is about taste. We're enhancing taste through fermentation and more to that to come in the course of the year. We're doing more on health and wellness with high flavanol solutions, which is working very well in Asia. We're working on cocoa replacement. That's a ChoViva concept that we launched so that customers can actually choose between a cocoa solution as well as a non-cocoa solution. I think pricing, tiering, availability, innovation and digital. Our gourmet segment is really from all cylinders, and that is where we are going to make a big difference. Very clear. We haven't talked about cocoa prices yet. Obviously, part of the Focus for Growth strategy, you have to make a planning assumption. Yep. On cocoa prices, I think we talked about GBP 3,000 per ton. Obviously, we are now above that level. Yep. Obviously, there are some concerns around supply again with El Niño. So, has your view changed at all on what constitutes a sustainable cocoa price? In that environment, or is CHF 3,000 still the right level to plan for? First of all, where are we now? Yeah. If you look short term, the cocoa price is around CHF 4,500 today. Yeah. That is indeed based on quite a bit of news about El Niño and that the crop will not be as good and so forth. I think the important thing to call out is, globally, there is more than 500,000 tons surplus in the market. So even if the crop will not be that great, there is much more buffer than there was a couple of years ago when the cocoa crisis started. This is the second consecutive year of surplus, because last year there was also some. That is still carried on by many players in the industry. So I believe there is quite a bit of buffer. I think that is number one. I think secondly, the reaction that we have seen to the cocoa price market is a bit more extreme than what you have seen in the past. There is obviously El Niño, if it is there, and if that really impacts the crop that will come in October, November, there could be something. But the reality is we are not seeing that yet. So we are seeing quite extreme reactions in the market. I think it will tend to that price corridor that what we talked about, which is about CHF 3,000-CHF 5,000 in the medium term. That is what we believe, and that is what we are still backing. Okay. Maybe last word about cocoa price, and that is interesting. Many of our customers, they have taken positions at around CHF 4,500-CHF 5,000, and that has already been priced in the retail price, what I talked about earlier. Yeah. At the current levels, even while they are a little higher than what they were a couple of months ago, it will not translate into even higher retail prices. In fact, I see a little bit of a downward of price decreases coming. That is super interesting and perhaps a sort of a slight mismatch between all of the noise around El Niño and what we are actually seeing in the data. Yeah. We need to see what El Niño, what it does. I think for us, what we have done is we wanted to build a lot of resilience, right? Because it is not one size fits all. I mean, a couple of years ago, we were super dependent, of course, on Ghana and Ivory Coast only. If you look now, whether it is West Africa, but we are expanding with larger scale farming in Brazil and Ecuador, so we have more resilience in global sourcing. That is super important that we do that. The crop that we saw in June was equal to what it was last year. So, hey, there might be movements, and I am not trying to underestimate it, absolutely not, but I want to put a bit of nuance to the sometimes quite extreme reactions that we are seeing in cocoa price volatility. That is fair. I mean, somewhat related, obviously, profitability per ton in terms of PBT per ton. Yes. Barry has come under some pressure in recent years and the guidance for 2026, you took it down a bit further in part because of the gourmet challenges that we talked about. You have been quite clear that long term, you think profitability per ton, PBT per ton can go back to pre-COVID levels. Maybe you could speak to what are the key drivers from getting to, from where you will end 2026 to that rebuild level. Yeah, I need to be a little careful. I am not asking you for a time frame. Because, I mean, of course, our year has ended a couple of days ago, so I am in a silent period. A few building blocks. It is very important though, for everyone that EBIT, you should always look at our EBIT in conjunction with profit before tax. Because in our EBIT, we have what we call finance charges, that are related to the price of the cocoa that we pass on to customers. If the prices of cocoa come down or if interest rates come down, we do not pass on so much. But of course, at the same time, we would have less interest costs, so that neutralizes on PBT. So we need to look at both. Okay? Next year, we will definitely have much lower finance cost pass on, so our EBIT will be down from that. But it is compensated in our profit before tax. So that is number one. Yep. The second lever, obviously for next year, if I talk the big building blocks, is I do expect a better margin from gourmet. Yeah. Growth. I think those are probably the two big levers down and up. Makes sense. In terms of that sort of movement in cocoa price, I mean, one of the other knock-on impacts was clearly a quite big strain on Barry Callebaut's balance sheet if we rewind 18 months ago. Yeah. I think it peaked at net debt to EBITDA 6.5 x, I think, in April last year. You've done a great job actually proactively de-leveraging, and then the lower cocoa price has also helped. But how are you thinking as leverage does normalize between the balance of investing in the business and maybe pursuing any sort of bolt-on M&A or returning cash to shareholders? Yeah. So our leverage has come down, and well, we guided for the end of this year, and we haven't changed guidance. So again, without saying too much, I think we can say around three is where we expect to end the year. I think it's important to point out, we said that at the time that the cocoa price was around CHF 3,000, now it's trending around CHF 4,500. So we're sticking to that guidance, and it means we have become more resilient as a company in terms of leverage. So we've optimized working capital. We have shortened some of the hedging that we did, so that we're closer to the market. Obviously, we've changed our financing structure to cope with potential volatility. So I've been really focused in the last couple of months to make the company more resilient for that. Now, back to your question. We will generate obviously quite some cash this year. What does that mean going forward? Well, first, I want to make sure that we invest in our own network behind the priorities. Ten countries, gourmet specialties. That's it. I'd be very hard pressed to do anything else. That's it. But we need to do that really well. Second, in the capital expenditure, the choice is ensuring absolutely strong fundamentals, no more quality problems. So that's number two. So investments in our own network go first. Second, de-leveraging, yes, but I would expect to end up between 2.5 and 3. That should be an ideal level. Depending on the cocoa price. If it goes up further, it will be slightly north of that. I have no intention to deleverage further, but that should be a good level for where we are. That is 2. 3, the dividend. It is now 30%. If we could do more, we can do more, but I would say for now, that is it. If there will be more cash generated, then that is where that will go. Finally, it is opportunistic M&A. Yep. As you know, in our sector, we cannot do something transformative because we are an N is one. There is no company that is exactly like us. If we were to do it will be built on, and we have a couple of opportunities that we are looking at, but I am careful. Yeah. Because I really want to create that replicable model first and then make an acquisition and do it really well. Makes sense. In terms of those investments in the network that you described, focused on the 10 key markets, does the scope of that change with Thomas coming on board, or is kind of that- No, he buys into the plan. He buys into it. Yeah. Also in previous companies where I worked, you've got to be very clear and repeat. It's 10 markets. Yeah. It's those segments. That is going to lead us to the profitable growth equation. It doesn't mean, I say it very often. Many people ask me in the company, "What should I stop?" I always say, "I can't tell you what you need to stop, but I can tell you what's really important, and that's really what we're going to do." I think that's a good and exciting journey. I think the company in one or 2 years' time will be a different one than what it was a while ago, and I think it will strengthen. I feel very positive about the direction that we're taking. But it's not overnight. Yeah. No, that makes sense. I'm conscious of time, and I think one final question before we go to the breakout, if there are more questions. As you've met investors, customers, employees over the last 9 months that you've been in the Chief Executive Officer role at Barry, what do you think is the biggest misconception about Barry Callebaut that you come across and that you maybe like to change? I'm not sure if it's a misconception, but I think it's important. We are in what I call an N is one. There is no company that is the same as we are because that integrated chain. We've essentially resource about a quarter of the world's cocoa, but it allows us to provide, A, availability, B, traceability, C, segregated streams, for big concerns that are out there, whether it's child labor, whether it's deforestation, and rightly so. We are, I would say, spearheading things like diversifying sourcing. We are working with large farming solutions in Brazil, as I talked about. We have nurseries for cocoa seedlings in Ecuador. So we're really developing that, and I think, the future of the industry, I think we are playing a very important role in that. But by doing that extraordinarily well, I feel that the deep expertise that I detected in the company, if you go deeper on processing those beans from different locations, understanding what exactly that means and turning that into a final chocolate solution is pretty unparalleled. Yeah, that makes us an N is one. That's always harder because, then you could ask, what are your peers? What are your benchmarks? What is the comparable? I'll leave that very wisely to you. But what my job is to create the maximum value out of this uniqueness. When you're unique, you're hard to replicate. When you're hard to replicate, that gives you a huge strategic benefit. That's what I like. Excellent. We have hit the buzzer there, Hein. Good. Thank you very much for your time and insights today and coming to Boston. Pleasure. Thank you.