SWITZERLAND: Lindt sees share gains in "strategic" markets
By Katy Askew | 20 August 2013
Lindt sales driven by market share growth
Swiss chocolate group Lindt & Sprüngli today (20 August) booked an increase in first-half sales and earnings, boosted by share growth across its "strategically important" markets.
The company said sales in the half to the end of June rose 9.6% to CHF1.13bn. Organic sales, stripping out the impact of currency exchange, were up 8.7%, above consensus expectations of 7.4%. Lindt said revenues were driven by market-beating 12.7% growth in the US, while sales in Europe rose 5.8%.
"Lindt & Sprüngli is developing significantly faster than the overall chocolate market and makes a substantial contribution to its growth," the company said.
It revealed improved margins meant operating profit gained 42.1% to CHF65.5m in the half, while net profit rose 40.2% to CHF48.8m.
Looking to the full year, Lindt reiterated its sales growth target of 6-8% but added its operating margin improvement would be at the higher end of its 20-40bp target range.
Shares in the firm were up over 2.5% in morning trade today.
Click here for just-food's two-part interview with Lindt & Sprungli CEO Ernst Tanner, which looks at the company's performance in developed markets and its patient strategy in emerging economies.
SEMI-ANNUAL REPORT January - June 2013
Lindt & Sprüngli continues to report impressive growth
Sales in Swiss francs up 9.6% to CHF 1.132 billion, organic growth 8.7%
Operating profit (EBIT) plus 42.1% at CHF 65.5 million
Higher net liquidity at CHF 628.0 million
Market share gains in all strategically important markets
Strategic growth and profit targets of 6 to 8% and 20 to 40 basis points confirmed
Kilchberg, August 20, 2013 - Lindt & Sprüngli reports once again sales and profit growth well above the market average in the first half 2013 and succeeds in extending the leading position in all the main markets.
The global economy reported a slight improvement which had a positive impact on consumer sentiment in many countries. In parallel, the pressure of several foreign currencies on the Swiss franc decreased somewhat. For the first time in several years the euro gained some strength again. Other important currencies such as the US dollar also reported a positive trend. The cool and rainy weather experienced in many places in the first half also had a favorable impact on chocolate consumption.
In the raw material sector, cocoa bean prices remained relatively stable while those of cocoa butter, milk and nuts increased.
In North America, the world's biggest chocolate market, Lindt & Sprüngli reported an organic sales growth of 12.7%. Thus, Lindt & Sprüngli is developing significantly faster than the overall chocolate market and makes a substantial contribution to its growth. Both LINDT USA and LINDT Canada together with GHIRARDELLI added to this very impressive development. The main European markets Germany, France, and UK, as well as Switzerland, also performed very well. In the declining Italian overall market, LINDT was able to maintain its previous year's sales figures, so gaining market shares.
The Group's expansion continues to progress. The recently opened subsidiaries in Russia, China, and South Africa have successfully started with accelerated development in their respective markets.
The LINDT "Global Retail" concept is best suited to presenting the high quality and diversity of the product assortment to consumers around the world, while creating a lasting shopping experience and generating sustainable customer ties. With organic growth compared to the same period last year reaching an excellent 23.8% at CHF 97.5 million, the activities of the LINDT "Global Retail" division show an impressive development in every respect. This important sector now contributes more than 8% to total Group sales. The number of newly opened boutiques with a consistent premium design is showing particularly dynamic growth. A very important success factor is the excellent relationship with shopping mall operators built up over many years. Lindt & Sprüngli is now being offered the finest locations as LINDT not only represents an important sales factor per square meter, but also contributes to the strong image of the shopping malls.
The newest lifestyle product line "HELLO - Nice to sweet you!" which appeals primarily to young chocolate lovers and those who have remained young at heart has got off to an impressive start. On that basis LINDT is planning to launch HELLO progressively worldwide in the next 15 months. Market tests are currently being run in all key markets.
Because of the above-average volume growth, major investments are currently being made to expand capacity at all main production sites.
When preparing the semi-annual financial statements, IAS 19 (revised) "Employee benefits" has been applied for the first time. The previous years' comparatives have been recalculated and restated accordingly.
As of June 30, 2013, Group sales achieved CHF 1.132 billion. This represents a gain of 9.6% in Swiss francs and organic growth of 8.7% compared to the first half of 2012, which goes hand in hand with a further gain of important market shares.
The operating profit (EBIT) as of June 30, 2013, amounts to CHF 65.5 million, representing an i ncrease of CHF 19.4 million or 42.1% compared to the adjusted figure for the same period in 2012. After deducting income tax at the rate of 25%, the Group's net income for the first half of 2013 achieved CHF 48.8 million. This represents an increase of CHF 14.0 million or 40.2% compared to the a djusted figures of the previous year (CHF 34.8 million).
As of end of June 2013, operating cash flow reached CHF 210.5 million (June 30, 2012: CHF 158.8 million). Net liquidity amounts to CHF 628.0 million (December 31, 2012: CHF 543.0 million).
The share buyback program which began in 2011 was successfully completed at the end of 2012. On April 18, 2013, the ordinary shareholders' meeting agreed to the destruction of the corresponding shares and participation certificates.
For the year as a whole, Lindt & Sprüngli is confirming its medium to long-term strategic targets and forecasts organic sales growth of 6 to 8%. The increase in the operating profit margin compared to the figure of the previous year (i.e. before the IAS restatement) will be at the upper end of th e target range of 20 to 40 basis points.
Original source: Lindt & Sprüngli
Companies: Lindt & Sprüngli
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