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Sales and Profits Continue to Rise at Lindt & Sprüngli Group

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Sales and Profits Continue to Rise at Lindt & Sprüngli Group

Sales and Profits Continue to Rise at Lindt & Sprüngli Group
March 13
10:09 2019

Despite the challenging market environment in 2018, the Lindt & Sprüngli Group once again continued its solid growth path and further extended its leading position in the premium chocolate market. Lindt & Sprüngli’s group sales increased by 5.5% in Swiss francs to reach SFr4.313 billion (€3.791 billion). Organic sales growth amounted to 5.1%, which is within the set target range. Lindt & Sprüngli expanded its market share in all countries.

Group operating profit (EBIT) rose by 6.9% to SFr636.7 million. The EBIT margin also improved again to 14.8%. Net income consequently increased by 7.6% to SFr487.1 million, providing a return on sales of 11.3%.

The Europe segment is still the most important for the Lindt & Sprüngli Group, contributing almost half of group sales. Overall organic growth in the European markets was a very solid 5.6%. The group also managed to increase its share of all the mostly saturated European markets, generating higher than average growth. Sales performance was particularly strong in the UK, Germany, Austria, and Spain, while growth in the European subsidiaries managed to climb into the double digits.

Work continued on the expansion and modernization of the Olten facility, the Lindt Cocoa Center, with the aim of strengthening Switzerland’s position within the group.

In the North America region, where markets are exposed to flat growth and price pressure, organic sales growth amounted to 2.8%. One highlight in the region was the outstanding double-digit growth realized by Lindt & Sprüngli in Canada. Lindt USA and Ghirardelli also achieved positive sales growth and outperformed the overall market. Russell Stover reported a slight decline.

Over the past financial year, the Lindt & Sprüngli Group has made substantial investments in the North American market in order to lay the foundation for profitable sales growth in future in this region. New logistics centres opened in California, Georgia, and Texas, creating the capacities and synergies in the supply chain for the group’s brands – Lindt, Ghirardelli, and Russell Stover. With these three brands, the Lindt & Sprüngli Group maintains its position as No. 1 in the premium segment and No. 3 in the US chocolate market.

All countries in the Rest of the World segment experienced strong growth and their development is extremely promising. Their contribution to group sales is steadily rising year after year. Overall growth in these countries amounted to 10.3%, and these chocolate markets hold substantial potential, especially Japan, South Africa, Brazil and China, where growth reached the double digits. A new distribution centre opened in Japan in November 2018. Its modern refrigeration plants and efficient warehousing systems will ensure that the own shop network is served as efficiently as possible.

Global Retail Business

Lindt & Sprüngli Group’s Global Retail business has been a success story since its inception in 2009. With double-digit growth and around 50 additional own shops spread across the world, Global Retail once again made a notable contribution to the overall group result. Lindt, Ghirardelli, Russell Stover and Caffarel Shops can now be found in 460 prime sites worldwide, attracting over 80 million visitors every year. Highlights during the reporting year included over 10 openings in Germany and Japan. There was a grand opening ceremony for three new Shops in the German theme park Europa-Park Rust.

An important element of the corporate strategy is a commitment to maintaining the highest quality in all areas of activity and to ensuring the business is managed according to sustainable principles. Significant progress has been made in the sourcing of sustainable cocoa beans since the Lindt & Sprüngli Farming Program was launched in 2008. Lindt & Sprüngli is well on track to meet the goal of achieving a fully traceable and verified supply chain for cocoa beans by 2020. Today, all the countries from which cocoa beans are sourced are covered by the sustainability program and more than 72,500 farmers can benefit from support tailored to their specific needs.

Outlook

Supported by stronger growth in the North America region, Lindt & Sprüngli anticipates sales growth of 5–7% in the mid- to long term and a steady improvement in the operating margin of 20–40 basis points. The group expects organic growth in sales and profits for the 2019 financial year to be within the mid- to long-term target range.


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