Lindt & Sprüngli: Lindt: Hope and Luck

Research evidence excerpt

Lindt & Sprüngli: Lindt: Hope and Luck

ry is structurally broken as a result of the EDME (%) 9.7 1.0 6.5 19.5

pricing of recent years. But might it take a year or two for consumers to adjust? Certainly Relative (%) (27.6) (1.5) (22.6) (38.6)

not a crazy idea. Even in other areas of CPG, where pricing has been much less stark than Source: Bloomberg, Bernstein estimates and analysis.

in chocolate, the volume “hangover” has persisted beyond the point at which pricing was

annualized. In response to our question on the call around whether Lindt had any reason Price Performance, 1YR

CHF140000 1800to believe that the volume weakness in chocolate would be shorter in duration than we’ve

observed elsewhere in FMCG, the company’s reply was honest and straightforward: “The CHF130000 1700

answer is no, we don't have any reasons to believe that the chocolate category will see, let's CHF120000 1600

say, a faster recovery than other fast-moving consumer goods categories”. This doesn’t augur CHF110000 1500

well for growth in the near-term, in our view. Management ended the 1H conference call by CHF100000 1400

saying “wish us good luck”. They will need it. CHF90000 1300

07/25 10/25 01/26 04/26 07/26

Investment Implications LISN.SW EDME

We rate Lindt Market-Perform, and revise down our Target Price to CHF100,000 to reflect

lowered growth expectations in the near-term. We continue to believe that this is one of the

highest quality names in Global Consumer Staples, however, we see the outlook over the next

six months as exceptionally challenging, with growth likely to underwhelm vs. consensus and

management’s “hopes”/expectations.

Adjusted EPS F25A F26E F27E Financials F25A F26E F27E CAGR Valuation Metrics 25A 26E 27E