Chocolate, fashion and drugs
Lindt & Sprüngli, BB Biotech AG, bioMérieux, Temenos, Brunello Cucinelli, Ekinops, Moderna, Fortum
Lindt & Sprüngli (LISN SW) Organic growth beats expectations; operating margins rise amidst headwinds
Lindt & Sprüngli closed 2024 with an impressive performance that reinforced its reputation as a luxury chocolatier navigating volatile markets with finesse. The Swiss company reported 7.8% organic growth for the year, exceeding market consensus of 7.12% and marking an acceleration in the second half to 8.3%. Total sales reached CHF 5.47 billion, driven by a strategic combination of pricing power and premium positioning. This result was even more remarkable given the challenging backdrop of record-high cocoa prices, which tested the resilience of the broader industry.
Geographically, the growth narrative unfolded across multiple fronts. Europe delivered a robust 9.5% growth rate, highlighting the enduring appeal of Lindt’s offerings in its core markets. North America grew by 5%, showing resilience despite inventory adjustments by certain retailers and an unfavorable calendar effect in the first half. Meanwhile, Lindt’s performance in emerging markets sparkled, with double-digit growth in Brazil, Japan, and China. Its retail stores also played a starring role, growing organically by 16.7% as the company expanded its footprint to 560 stores globally, up from 530 the previous year.
The cherry on top of this performance was the company’s decision to raise its operating margin target for 2024 to over 16%, signaling confidence in its pricing strategy despite escalating input costs. This new target marks an improvement of at least 40 basis points from earlier guidance. Looking ahead, Lindt projects organic growth of 7–9% in 2025, supported by further price adjustments to counter inflationary pressures. While questions remain about the sustainability of volume-driven growth in a premiumized strategy, Lindt’s ability to outperform expectations demonstrates the strength of its brand and management’s tactical agility in a demanding environment.
BB Biotech AG (BION SW) Strong newsflow and m&a momentum mark an energetic start to the year
BB Biotech AG kicked off 2025 with a surge of activity that showcased the dynamism of the biotechnology sector. The Swiss investment company, focused on high-growth biotechs, reported key updates from its portfolio and the broader industry. Argenx, which accounts for 11.5% of BB Biotech’s holdings, announced preliminary 2024 sales of $2.2 billion, an 84% year-over-year increase that outperformed market expectations. Moderna, another notable holding at 3.6% of the portfolio, posted more subdued results, with 2024 sales at the lower end of its guidance. Its projected 2025 revenue of $1.5–$2.5 billion fell short of consensus estimates, highlighting the contrasting fortunes within the biotech space.
The industry also saw a rekindling of M&A momentum. Johnson & Johnson made headlines with its $14.6 billion acquisition bid for Intra-Cellular Therapies, offering a 39% premium on the company’s share price. At the same time, Biogen announced plans to acquire the remaining 89.8% stake in Sage Therapeutics, offering a 30% premium. Both companies are part of BB Biotech’s portfolio, holding stakes of 6.1% in Intra-Cellular and 1.1% in Sage, underscoring the fund’s strategic positioning in high-potential assets. These deals highlight big pharma’s urgency to secure innovation amidst looming patent expirations.
BB Biotech’s performance reflects the importance of staying ahead in a rapidly evolving landscape. Declining valuations in the biotech sector, combined with a macroeconomic environment favoring acquisitions, create fertile ground for significant developments. The fund’s diversified portfolio and focus on companies at the forefront of innovation ensure its relevance and resilience. As the year unfolds, BB Biotech remains an active player in a sector poised for both disruption and opportunity.
bioMérieux (BIM FP) Strategic acquisitions and robust installations reinforce growth story
In a decisive move to strengthen its diagnostics portfolio, French healthcare company bioMérieux completed the acquisition of Spinchip Diagnostics for €138 million. The Norwegian firm specializes in immunoassay diagnostics targeting cardiac diseases, including myocardial infarction and pulmonary embolism. This acquisition builds on bioMérieux’s existing 20% stake, aligning with its strategy of first investing in promising technologies before fully integrating them. While Spinchip’s commercial impact is expected by 2028, the deal underscores bioMérieux’s commitment to innovation in areas of high unmet clinical need.
The company also reported impressive Q4 2024 growth in its installed base. It added 500 BioFire systems and 900 SpotFire units, bringing total SpotFire installations to 3,000 within a year of its launch. This performance marked a recovery from slower growth in Q3 and validated the company’s guidance. BioFire and SpotFire’s success, particularly in high-demand markets like Japan and the US, underscores bioMérieux’s ability to scale its operations efficiently.
Financially, the company remains well-equipped to sustain its growth. With net debt of €285 million and EBITDA of €1 billion, bioMérieux has the financial flexibility to pursue further expansion. The Spinchip acquisition is not expected to dilute margins significantly, as most related costs will support R&D. By strategically broadening its diagnostics portfolio and maintaining robust growth in key product lines, bioMérieux continues to solidify its leadership in the healthcare sector.
Temenos (TEMN SW) Resilient subscription growth offsets licensing declines, restructuring shows results
Temenos wrapped up 2024 with results that surpassed expectations, highlighting the effectiveness of its pivot toward subscription-based revenue. Q4 revenue reached $318.9 million, an 8% year-over-year increase, with subscription revenue surging 59% to $105.8 million. This growth helped counterbalance an 84% decline in license revenue. For the full year, Annual Recurring Revenue (ARR) climbed 12% to $804.2 million, meeting the upper range of guidance.
Operationally, the company’s restructuring efforts paid dividends, with non-IFRS EBIT for Q4 rising 21% year-over-year to $120 million, significantly exceeding forecasts. For the year, non-IFRS EBIT grew 14% to $354.6 million, while operating margins improved to 34%. Free cash flow also grew by 17% to $285 million, bolstered by cost efficiencies and a favorable forex environment.
While Temenos’ subscription strategy and operational improvements signal positive momentum, sustaining these gains remains a key challenge. The company’s guidance for a 7.8% CAGR through 2028 is slightly above market growth rates but requires consistent execution. As Temenos prepares to unveil its 2025 outlook, investors remain cautiously optimistic about its ability to deliver long-term value.
Brunello Cucinelli (BC IM) Luxury fashion powerhouse thrives on global demand
Brunello Cucinelli closed 2024 with another year of double-digit growth, solidifying its place in the luxury market. Annual sales reached €1.28 billion, up 12.2% year-over-year, surpassing December guidance. Q4 growth accelerated to 11.6%, driven by strong retail sales, which rose 15.4%. The Americas led the charge with 18.4% growth, followed by Asia at 13.6%. Europe, while slower at 2.7% growth, remained stable, with the rest of the continent offsetting a slight decline in Italy.
The company’s focus on exclusivity and high-quality offerings has paid off, even as it increases capital expenditures and inventory levels to support growth. Net debt rose to €105 million, reflecting investments in infrastructure and higher stock levels. Despite these financial pressures, Brunello Cucinelli’s margins remain robust, with the EBIT margin expected to improve by 30 basis points to 16.7% in 2024.
Looking ahead, management reiterated its goal of 10% annual sales growth through 2025, maintaining a strong position in the competitive luxury landscape. With its elevated brand positioning and targeted global expansion, Brunello Cucinelli continues to demonstrate resilience and adaptability, securing its status as a leader in high-end fashion.
Ekinops (EKI FP) Facing challenges, Ekinops bets on a brighter 2025
Ekinops closed 2024 under a cloud, with annual revenue declining 9% year-over-year to €117.1 million. Q4 revenue was €29.8 million, down 2% from the previous year and falling short of expectations by 7%. The decline was driven by underperformance in the transport segment, which plummeted 30%, overshadowing an 11% growth in the access segment. This drop reflects a broader industry slowdown caused by post-pandemic overcapacity, reduced operator investments, and rising borrowing costs. International business also suffered, with revenues from the US, EMEA, and APAC shrinking significantly, while France emerged as a bright spot, growing 18%.
Despite the tough year, Ekinops is cautiously optimistic about 2025. Management anticipates growth in the access business as it forges relationships with Tier 1 operators in Germany and Belgium. The transport segment, critical for managing AI-driven data expansion, is also expected to rebound, with the company betting on its competitive 800G product line to drive growth. However, management has tempered expectations, revising its 2025 growth forecast from 8% to 5% due to lingering uncertainties.
Ekinops is trading at 4.8x ebitda, well below its historical average of over 7x. While the company faces near-term challenges, its solid fundamentals and strategic focus on infrastructure investments position it well for a potential recovery in the telecom sector.
Moderna (MRNA US) Moderna stumbles as 2025 guidance disappoints
Moderna has encountered significant turbulence as it downgraded its 2025 revenue guidance to $1–2.5 billion, sharply below the previous forecast of $2.5–3.5 billion. This reduction stems from weaker-than-expected performance of its RSV vaccine (mRESVIA) and a slowdown in COVID-19-related sales. Unaudited 2024 revenue is expected at $3–3.1 billion, also falling short of the $3.2 billion consensus. The lowered expectations come despite tight cost controls, which reduced operating expenses by 25% compared to the previous year.
The company continues to invest in its extensive pipeline, with three major approvals anticipated in 2025, including a next-generation COVID-19 vaccine, an RSV indication extension, and a flu/COVID combination vaccine (mRNA 1083). However, delays in clinical milestones and challenges in commercial execution have raised concerns about the company’s ability to capitalize on its portfolio. Revenue growth forecasts for 2024–2028 were also revised downward to 11%, reflecting more modest expectations for mRESVIA and Spikevax sales.
Moderna’s cash reserves remain robust, projected at $9.5 billion for 2024, which offers some buffer amid the market’s skepticism. Moderna is interesting from a LT persective, given the long-term potential of its mRNA platform. But for now, Moderna’s narrative is one of potential held hostage by execution risks and a challenging commercial landscape.
Fortum (FORTUM FH) Navigating headwinds as fortum charts a strategic course
Fortum is preparing for a challenging Q4 2024, with earnings due on February 11. The Finnish energy company faced a double blow of reduced production and falling prices. Maintenance at its Olkiluoto 2 nuclear plant resulted in a 14% drop in nuclear output, while less favorable hydroelectric conditions caused production to decline by 12.5%. Spot electricity prices dropped 14% year-over-year, further pressuring the company’s margins. As a result, Fortum revised its 2024 EPS estimate downward by 7%.
Despite these challenges, Fortum remains focused on its long-term strategy. It finalized the sale of its recycling and waste business for €800 million, reflecting a €180 million capital gain, and reduced its coal capacity by 100 MW through biomass renovation. The company also acquired a 2.6 GW renewable energy portfolio in early development stages, signaling its commitment to decarbonization and future growth.
Fortrum remains interesting due to its strong positioning in nuclear energy, which provides long-term production visibility. While near-term performance may remain sluggish, Fortum’s strategic efforts to optimize its portfolio and adapt to shifting energy markets underscore its resilience and potential for sustained value creation.
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