Chocolate maker Barry Callebaut today (12 November) cut its mid-term outlook as the global chocolate market continued to suffer in the face of the global recession.

The setting of reduced targets came despite Barry Callebaut providing a robust set of figures for 2009. The group posted a 10% rise in full-year net profit to CHF227m (US$225.2m).

However, CEO Juergen Steinemann said the group was expecting the economic environment to "remain challenging and volatile" and, as a result, it was targeting annual average volume growth of 6-8% and operating profit growth at least in line with this for the three years until the end of August 2012.

Its previous volume growth target for the period 2007/08 to 2010/11 was 9-11% and EBIT growth of 11-14%.

Barry Callebaut's shares suffered accordingly earlier this morning, down 0.9% at around 11.30 GMT.

Although on the surface disappointing, the downgrade of expectations has caught few analysts by surprise. Most observers seem to feel that the new targets offer a more realistic prospect going forward. They may also reflect the recent change in CEO with Steinemann trying to manage expectations down a little.

However, Jon Cox, an analyst at Kepler Capital Markets in Zurich, sounded a downbeat note at the news.

"Cutting previous targets is disappointing, although there is probably an element of kitchen-sinking with the arrival of new CEO Juergen Steinemann," he said. "Our growth assumptions have to come down by some 25% and we expect stock weakness."

The truth is that Barry Callebaut remains in a relatively strong position and hopes the Swiss group will be an acquisitive force over coming years, as smaller players struggle in the economic downturn, are well justified.

The chocolate market has been under intense pressure in recent months as consumers have cut back on gifting and indulgent purchases. This, twinned with a hike in cocoa futures over the past year, has made life tough going.

Indeed, in the same period that Barry Callebaut reported its 8.5% rise in sales revenues, the global market for chocolate has fallen 2%.

As Steinemann reported after making his announcement today: "This means our outlook is actually very bullish."