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1. Company Snapshot

1.a. Company Description

Chocoladefabriken Lindt & Sprüngli AG, together with its subsidiaries, engages in the manufacture and sale of chocolate products worldwide.The company sells its products under the Lindt, Ghirardelli, Russell Stover, Whitman's, Caffarel, Hofbauer, Küfferle, and Pangburn's brands.It serves customers through a network of distributors, as well as through approximately 500 own shops.


Chocoladefabriken Lindt & Sprüngli AG was founded in 1845 and is headquartered in Kilchberg, Switzerland.

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1.b. Last Insights on LISP

Lindt & Sprüngli AG's recent performance was negatively impacted by historically high cocoa prices, which weighed on its profitability. The company's cautious outlook on full-year profitability, as stated in its recent update, reflects the challenges posed by escalating cocoa costs. Furthermore, the divergent performance of Swiss chocolatiers, with Lindt & Sprüngli AG's peers experiencing less strain from cocoa prices, adds to the company's difficulties.

1.c. Company Highlights

2. Lindt & Sprüngli's Organic Growth Surpasses Guidance

Lindt & Sprüngli reported organic sales growth of 11.2% in the first half of 2025, surpassing guidance, with total sales reaching CHF 2.35 billion, up 9% in Swiss francs. The growth was driven by price increases of 15.8% and a volume/mix decline of -4.6%, better than expected. EBIT came in at CHF 259 million, with an EBIT margin of 11.0%, in line with guidance. Net income was CHF 189 million, with a net income margin of 8.0%. Earnings per share (EPS) came in at CHF 80.65, slightly below estimates of CHF 81.3. Free cash flow was negatively impacted by increased inventory values due to higher cocoa bean prices, resulting in a negative free cash flow of CHF 80 million.

Publication Date: Aug -01

📋 Highlights
  • Organic Sales Growth Exceeds Guidance: 11.2% growth in H1 2025, surpassing expectations.
  • Europe Leads Regional Performance: 17.7% organic growth, outpacing North America and Rest of the World.
  • EBIT Margin Stability: 11.0% margin achieved, aligning with guidance.
  • Free Cash Flow Challenges: Negative CHF80 million due to higher inventory costs from cocoa prices.
  • Raised Full-Year Guidance: Organic sales growth guidance increased to 9-11% for 2025.

Segment Performance

Europe posted an excellent result with 17.7% organic growth, while North America grew 3.6%, and the Rest of the World segment grew 7.8%. The company gained market share in North America in the first half, with significant growth in offtakes, but sell-in growth was slower due to retailer inventory management. Pricing in North America was slightly lower than in Europe. The company expects accelerated growth in North America and the Rest of the World segment in the second half.

Guidance and Outlook

The company raised its organic sales growth guidance for 2025 to 9-11% and confirmed an EBIT margin increase of 20-40 basis points. For the full year, Lindt & Sprüngli expects to deliver a positive operating profit development, driven by price increases and cost savings projects. The company expects low single-digit incremental price increases in the second half versus the first half. According to the company's management, "we expect a strong second half due to the rollout in the U.S. and other regions" (Source: Lindt & Sprüngli's earnings call transcript).

Valuation

At current prices, Lindt & Sprüngli trades at a P/E ratio of 41.04, a P/B ratio of 5.7, and a P/S ratio of 4.92. The EV/EBITDA multiple is 23.47, and the dividend yield is 1.25%. The free cash flow yield is 3.36%, and ROIC is 9.64%, while ROE is 14.66%. The net debt to EBITDA ratio is 0.62. These valuation metrics suggest that the stock may be trading at a premium, but the company's strong brand equity and growth prospects may justify this valuation.

Growth Prospects

The company aims for organic sales growth of 6-8% in the medium to long term and an average annual EBIT margin increase of 20-40 basis points. The company has plans to extend the success of Dubai Style Chocolate with new innovations, recipes, and seasonal assortments, which could lead to higher price points and brand equity benefits. The own retail business now accounts for around 15% of total sales and is a strong contributor to brand equity and profitability.

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.20%)

6. Segments

Europe

Expected Growth: 5.8%

The European market, being mature, is expected to grow slightly below the global average due to saturation. However, Lindt & Sprüngli's strong brand presence and loyal customer base will help maintain a relatively stable growth rate, slightly below the global average.

North America

Expected Growth: 7.0%

North America, particularly the U.S., is expected to grow above the global average due to increasing demand for premium and artisanal chocolates. Lindt & Sprüngli's established brand and distribution network position it well to capitalize on this trend.

Rest of The World

Expected Growth: 8.0%

Emerging markets in Asia, Latin America, and other regions are expected to drive growth above the global average. Rising incomes, urbanization, and a growing appetite for premium brands are key factors. Lindt & Sprüngli's expanding presence in these regions will likely result in higher-than-average growth.

Sales between Segments

Expected Growth: 6.2%

As this segment involves internal transactions and eliminations, its growth is assumed to align with the global growth hypothesis, maintaining a steady and consistent rate.

7. Detailed Products

Lindt Excellence Chocolate

Premium dark, milk, and white chocolate bars with high-quality ingredients and unique flavor profiles

Lindor Truffles

Smooth, creamy chocolate truffles with a delicate shell and a variety of flavors

Gold Bunny

Milk chocolate bunnies filled with smooth, creamy chocolate and wrapped in gold foil

Lindt HELLO

Colorful, creamy, and crunchy chocolate bars with unique flavor combinations

Lindt Nuxor

Rich, smooth chocolate bars with crunchy hazelnut and almond pieces

Lindt Creation

Artisanal, handcrafted chocolates with unique flavor profiles and textures

Lindt Seasonal Products

Limited-edition chocolates and treats for holidays and special occasions

8. Chocoladefabriken Lindt & Sprüngli AG's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Chocoladefabriken Lindt & Sprüngli AG is medium due to the presence of alternative confectionery products and the increasing popularity of healthier snack options.

Bargaining Power Of Customers

The bargaining power of customers is low due to the premium nature of Lindt's products and the strong brand loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the dependence on high-quality cocoa beans and the presence of a few large suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including the need for significant investment in manufacturing and distribution infrastructure.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of established competitors such as Godiva and Ghirardelli, and the increasing competition from newer players in the premium chocolate market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 24.82%
Debt Cost 3.95%
Equity Weight 75.18%
Equity Cost 5.53%
WACC 5.13%
Leverage 33.02%

11. Quality Control: Chocoladefabriken Lindt & Sprüngli AG passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Danone

A-Score: 5.8/10

Value: 3.3

Growth: 4.0

Quality: 5.2

Yield: 5.0

Momentum: 7.5

Volatility: 9.7

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Lindt & Sprüngli

A-Score: 5.6/10

Value: 4.2

Growth: 5.6

Quality: 6.5

Yield: 1.9

Momentum: 6.5

Volatility: 9.0

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Essity

A-Score: 5.5/10

Value: 5.1

Growth: 5.4

Quality: 5.7

Yield: 6.2

Momentum: 0.5

Volatility: 10.0

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Mondelez

A-Score: 5.4/10

Value: 3.5

Growth: 5.3

Quality: 5.1

Yield: 6.0

Momentum: 2.5

Volatility: 9.7

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L'Oréal

A-Score: 5.0/10

Value: 2.0

Growth: 5.9

Quality: 7.8

Yield: 3.1

Momentum: 3.0

Volatility: 8.0

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Beiersdorf

A-Score: 4.1/10

Value: 2.1

Growth: 5.4

Quality: 6.4

Yield: 1.2

Momentum: 0.5

Volatility: 9.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11640.0$

Current Price

11640$

Potential

-0.00%

Expected Cash-Flows