Barry Callebaut, EU Luxury (BC on Pos CW), L’Oréal, EU Food Retail, ...

Research evidence excerpt

Barry Callebaut, EU Luxury (BC on Pos CW), L’Oréal, EU Food Retail, ...

line with cons). ND/EBITDA <3.0x

Conf Call: 8h00 UK / 9h00 CET. Webcast here

Research: Ed rates BARN as UW

Chiara summarizes views on EU Luxury ahead of Q2 reporting and places Brunello on Pos Cat Watch. She thinks the

environment for luxury goods remains mixed: on the one hand, the growing wealth effect in key markets, improving tourist trends

in EU and the ME stabilising should be helpful. On the other hand, Chinese remain volatile and may have taken a step down vs

Q1; and the longer duration of the ME impact in Q2 vs Q1 should limit acceleration in Q2. Add to that luxury consumers

increasingly selective and demanding and Chiara sees a still sharp polarisation of performance, led by category (jewellery and

high end RTW to stand out, leather goods still bumpy) and specific brand momentum dynamics. She anticipates solid prints at

some of the winners, notably Richemont, Zegna and Brunello Cucinelli. While Richemont and Zegna stocks have outperformed

YTD, Brunello has lagged (-20% YTD) and H1 results should be a good reminder of its healthy developments for both the top

and bottom lines and placed on Pos CW into H1 (on 30th July). Chiara does not expect Q2 reporting to be a major catalyst for the

main leather goods stories: the already light positioning at LVMH, Kering and Hermes should provide a floor to share prices, but

at the same time muted Q2 trends should cap the upside for the time being. The noterecaps all previews, updated brand heatmap

and precious numbers. See all details here and let me know if a catch up wit Chiara would be helpful.

Celine’s takes on L’Oréal announcement regarding Gucci Beauty agreement. The company shall assume responsibility for