Shares of Lindt & Sprüngli (SIX:LISN) gained traction in early European trading on Tuesday after the premium chocolate maker raised its 2024 operating profit margin forecast to at least 16%, the top end of its previous guidance and an improvement from 15.6% in 2023.

Key Financial Highlights

1. Revenue Growth

   • 2024 organic sales increased by 7.8%, reaching CHF 5.47 billion, supported by strong performance in key European markets.
   • Lindt forecasts 7%-9% organic growth in 2025, maintaining robust momentum.

2. Operating Margins

   • Operating profit margin is expected to improve by 20-40 basis points annually beyond 2025, reflecting disciplined cost management.
   • Rising cocoa prices—up 180% in 2024—remain a key headwind, with additional price hikes anticipated in 2025.

3. Currency Impacts

   • Currency headwinds, particularly from a weaker USD and EUR, trimmed 2024 organic sales growth by 2.7%, highlighting exchange rate sensitivities.

4. Cocoa Price Surge

   • Cocoa prices, which have nearly tripled in recent years, continue to challenge profitability.
   • Lindt acknowledged that 2024 was a "challenging" year, with cocoa prices at historic highs, requiring price adjustments to sustain margins.

Strategic Focus

• Resilient Demand: Despite price hikes, Lindt's premium brands, including Lindor and Ghirardelli, showed strong consumer demand.
• Medium-Term Goals: Lindt reaffirmed its medium- to long-term targets of 6%-8% organic sales growth annually, alongside steady margin improvements.

Sector Outlook

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