Following a strong year in 2011, Lindt maintained its momentum in 2012 in spite of a more challenging environment in Europe. It delivered a fine performance, with organic sales growth accelerating and operating profit up sharply. Unusually, management says it is confident for 2013 in terms of both demand (in US, Europe and emerging markets) and margins (up 20-40 bps), with currency effects more positive and cocoa prices very low! These various factors boost the visibility offered by the group. We reiterate our PLUS rating for the share.
Following a strong 2011, Lindt maintained its momentum in H1 2012 in spite of a more challenging environment in Europe. Although the company’s performance must be seen in its proper perspective (low seasonality in H1), organic sales growth is solid and operating performance is better than expected and promising for H2 (due to the effect of cheaper cocoa prices). Management has confidently confirmed its full-year targets (6-8% organic sales growth and 20-40 bps margin growth), strengthening the visibility offered by the group. We reiterate our PLUS rating for the share.
After starting to progress again in 2010, Lindt reported very strong performance in 2011 despite the challenging economic environment (economic slowdown/strong CHF/high cocoa price). The market therefore appreciated the better than expected margin improvement (+60 bps vs +35 bps). The management’s confidence is reflected in the return to historic medium-term targets in 2012 (+6/8% organic sales growth, margin +20/40 bps). The raw material situation has greatly improved (cocoa price -35%). In addition, at the current parity level, the exchange rate effect would become almost neutral in 2012 (vs very negative in 2011). What is more, the group is prioritising development in the emerging countries! Lindt’s targets are China (presence in Hong Kong), followed by Russia and finally Brazil. Under these conditions, the prospects for double-digit EPS growth in 2012 are favourable. The visibility offered by the group, together with the share buyback program inaugurated last year (5% of the market capital) will be catalysts for the share.
After starting to progress again in 2010, Lindt reported robust performance in 2011 despite the challenging economic environment (economy/strong CHF/high cocoa prices). The market should appreciate the better than expected margin improvement (+60 bps vs +35 bps) and the return to historic medium-term targets for 2012 (+6/8% organic sales growth, margin +20/40 bps). This good visibility, together with the share buyback programme inaugurated last year, will be catalysts for the share. PLUS code confirmed for Lindt.
Despite the strength of the CHF, H1 results are robust. The market may have been uncertain about Lindt’s capacity to generate an organic growth rate above 6% because of the consumer environment, a geographical mix exposed to Europe and a critical size effect restricting commercial visibility, but it has now been reassured by H1 results and by the confirmation of 2011 targets. The visibility (pricing power) and new share buyback program should be catalysts for the share. Plus code maintained.
Lindt made progress again in 2010 despite subdued consumer spending and the cocoa price spike. The market should also appreciate the return to long-term historic objectives (+6/8% organic sales growth, +8/10% Ebit at constant exchange rates). The good visibility, a strong pricing power and announcement of a share buyback program are real catalysts for the share. Plus code confirmed.
Lindt is making progress again in 2010 (organic sales growth +7.3%, Ebit +22.8% at CHF 325.3 million and net profit at CHF 242 million), despite a difficult environment (consumer spending and cocoa price spike). The market should also appreciate the return to long-term historic objectives (+6/8% organic sales growth, EBIT +8/10%). Such visibility and the announcement of a share buyback program should be short-term catalysts for this share. PLUS code confirmed.
2010 sales figures are robust: +2.2% at CHF 2.58 billion. Despite a difficult environment (subdued consumer spending, strong CHF, higher cocoa price): 1/ organic growth proved better than expected and higher than the group target (+7.2% vs +5/7%); 2/ Lindt gained market shares and maintained its competitive pricing; 3/ 2010 EBIT targets are confirmed. The productivity measures put in place since 2009 are yielding benefits and the medium-term organic growth dynamic (+6-8%) seems to be under way again! Plus code confirmed.
Lindt is a safe investment in the Food sector. The group has proved its ability to adjust its cost structure without damaging the quality/price ratio of its premium products in a difficult environment (deflation, low demand, rising cocoa prices). The return to historical growth levels and confirmation of its pricing power provide reassurance over its medium-term profit outlook.
Lindt is a safe investment in the Food sector (Minus code). Its premium position and robust fundamentals enabled the group to weather the recession. The trend towards high quality in the chocolate sector, increased visibility of economic recovery (USA and emerging markets) and a new year which is likely to bring higher volumes are all factors which should weigh in favour of the share.
Lindt is a sound investment in the food sector (code minus) with multiple strengths. The company’s upscale market position and solid fundamentals helped it weather the recession. Ongoing productivity increases and consumer trends favouring upscale producers in the chocolate sector (Europe/USA) give Lindt an attractive outlook in a climate of economic recovery.
Because of the seasonal effect (just 35% of sales and 10% of EBIT), the 1st half is not representative and the result announcements are not very significant. Factors to be noted: exceptional costs (CHF 22 million) linked to actions undertaken in Italy and the USA to dynamize the group’s industrial and commercial efficiency and the reassuring confirmation of 2009 targets: organic growth between 2% and 5% and EBIT between CHF 260 million and CHF 280 million after exceptional costs. PLUS code confirmed.
Alongside Danone and Nestlé, shares recommended by Bordier & Cie in the Food sector (neutral code), we regard Lindt as a safe investment with many qualities. Its defensive characteristics (premium position) and robust fundamentals enable the group to perform well in a challenging environment. The 2008 results confirm this fact, while the efforts implemented in 2009 pave the way for the future.
Publication of 2008 sales figures showed organic growth slowing to +5.8%, below expectations (8%). Not completely immune, Lindt was adversely affected by the sharp deterioration of consumer spending on all continents in Q4. Reassuringly, the levers at its disposal (price, productivity, marketing) enable the group to confirm the improvement of its margin (+20pb) in 2008. The tough economic environment for 2009 will be offset by currency effects and greatly reduced raw material costs. Plus code confirmed.
Alongside Danone and Nestlé, which are also shares recommended by Bordier & Cie in the Food & Beverages sector (Plus code), Lindt is a safe investment with many qualities. A growth stock with solid fundamentals, Lindt also has defensive virtues (premium position) which enable it to perform well in a difficult environment (raw materials/economic slowdown).
Half-yearly results for 2008 are better than expected albeit not very meaningful, with the first half-year representing only 38% of annual turnover and 10% of Ebit. Lindt had prepared the market for a slowdown in its organic growth (+7.9% compared to 13.5% in the first half of 2007), which nonetheless remains in line with the medium-term target (+6-8%). The improvement in EBIT (+11.6% to CHF1.18 billion) is a pleasant surprise in a difficult context (European volumes, soaring price of milk and cocoa). Confidence is reiterated in management, which forecasts organic growth of between 8% and 10% in 2008 (second quarter price rises achieving full effect in the second half-year) and an improvement in the margin (+20pb).
Results for 2007 are good (EBIT +18% to 351 million CHF, net profit +20% to 251 million CHF). The margin improvement (+40pb to 11.9%) falls within the upper target range (+20-40 bp) despite the rising price of cocoa. New products, upmarket strategy and gain of US market shares have contributed to this performance. The dividend is to be increased from 20% to 330 CHF. We are confident over the prospects for 2008: higher raw material costs will be rolled over to the selling prices. PLUS code confirmed.
The sales growth announced by Lindt for 2007 (+14% to 2.95 billion CHF) was perfectly in line with the consensus. The double digit organic growth (+11.9%) for the 4th year in a row deserves a special mention. Demand for luxury chocolate in the USA remains high. Reassuring facts: Lindt confirmed the improvement of its EBIT margin (+20-40bp) in 2007, together with its long-term organic growth objective (6%-8%). The rise in material costs has now been rolled over to selling prices. We are therefore confident of the prospects in 2008.
In line with the new sectoral allocation adopted by Bordier & Cie (Plus code for Food & Beverages), we regard Lindt as a safe investment with many qualities. A choice target in this segment and a high growth share with excellent prospects, Lindt has defensive virtues (Beta: 0.8) against financial market/economic risks.