* Full-year net profit falls to 240 mln Swiss francs
* Sales up 6.4 pct to 6.24 bln Swiss francs
* Lowers mid-term target for volume growth
* Shares slide (Adds CEO, CFO, analyst comment, shares)
By Silke Koltrowitz
ZURICH, Nov 4 (Reuters) - Swiss chocolate maker Barry Callebaut scaled back its sales growth targets on Wednesday to try and maintain profit margins after reporting a worse than expected drop in full-year net profit.
The Zurich-based company cut its mid-term sales volume growth target to 4-6 percent a year from 6-8 percent as higher cocoa bean prices and a foreign exchange loss left net profit down 6 percent at 240 million Swiss francs ($242.1 million).
“When we grow volumes 7-8 percent, we struggle to come up with similarly high profitability growth. So it’s probably clever to adjust our volume growth ambitions so profitability can follow,” said Chief Financial Officer Victor Balli.
Barry Callebaut proposed a dividend of 14.50 francs per share for 2014/15, below an average analyst forecast of 15.8, though Balli said the company was likely to stick to its current payout ratio of 30-35 percent.
Shares in the company fell as much as 7.9 percent and were trading 7 percent lower at 0911 GMT.
Barry Callebaut said it expected a challenging 2015/16 due to the current cocoa products market, which will temporarily affect its profitability.
Chocolate makers are grappling with declining chocolate sales worldwide though Barry Callebaut is benefiting from a trend at big food firms to outsource chocolate production as well as robust demand for its premium and ready-to-use products for professionals.
Antoine de Saint-Affrique, a former Unilever executive who took over as chief executive in October, said he expected the global chocolate confectionery market to grow 1.8 percent over the next five years, following a decline of 2.7 percent over the last fiscal year.
Balli said demand accelerated in the last quarter and it could pick up in western Europe and the United States as the negative impact on chocolate consumption from recent price increases by big companies ebbs off.
For the year, sales volumes rose 4.5 percent to 1.795 million tonnes, in line with the new lower target. The company also said it would now target EBIT (earnings before interest and taxes) growth ahead of volume growth in local currencies.
Its net profit for the year to the end of August was down from 255 million last year and below a 254 million forecast in a Reuters poll.
Balli said there was no fundamental reason for cocoa bean prices to still be at such high levels, but one should probably expect sideward movements rather than strong jumps or falls.
Vontobel analyst Jean-Philippe Bertschy said in spite of higher than expected volume growth, EBIT per tonne had decreased significantly in the second half and he noted the “ongoing weak free cash flow”, confirming his “Hold” recommendation. ($1 = 0.9913 Swiss francs) (Editing by Gopakumar Warrier and David Clarke)