Lindt & Spruengli Reports In-Line 2016 Results; FVE Reduced by 3% to CHF 57,000

Narrow-moat premium chocolate manufacturer Lindt & Spruengli, or L&S, reported in-line 2016 results with organic sales growth of 6.0% and a 20-basis-point EBIT margin increase, at the bottom end of its long-term guidance. Sales, EBITDA, and EBIT were all within 1% of our estimates. While our estimates are broadly unchanged, we are cutting our fair value estimate by 3% to CHF 57,000, reflecting a drop in the pension surplus. Our narrow moat rating is unchanged.