Lotus Bakeries On track to become the third largest cookie brand in the world

We updated our Lotus Bakeries' numbers after the very good 1H22 results. The increase in 1H22 REBIT(DA) was achieved against a comparison of record profitability both in terms of percentage as in absolute value. 1H22 REBITDA and REBIT margins of 19.8% and 16.5% respectively were in line with profitability seen in FY21. So notwithstanding the challenges, Lotus Bakeries showed strong resilience in 1H22.
Price increases towards customers were implemented. However, Lotus Bakeries indicated it is also absorbing part of the current inflationary shock but they will continue to support margins and profitability through savings, improving efficiencies, product mix and pricing.
We also incorporated in our model Lotus' expanding and accelerating investment program (first in the US and also in Asia as of FY26 as they recently revealed plans in Asia for a third Biscoff plant). Lotus Bakeries highlighted that it is urgently needed that the capacity extensions for Biscoff in Belgium and the US will be operational by the end of FY22 in spite of global supply chain disruptions and cost inflation.
We reiterate our € 6100 TP (which was increased immediately after the 1H results) and our Accumulate rating as Lotus Bakeries is aiming for continued growth in FY23.