Swiss chocolate group Lindt & Sprüngli revealed today (17 January) its sales accelerated in the second half of 2016, enabling it to deliver a 6.8% increase in revenue.
The company said sales rose to CHF3.9bn (US$3.88bn). Organic growth stood at 6% with currency contributing 0.8 points as the weakened pound offset a stronger dollar against the Swiss franc. The company noted the rise in sales was within its target range of growth of 6-8%.
Lindt & Sprüngli said its growth rate rose to 7% in the second half of the year, compared to 4.4% in the first six months.
In Europe, the company booked a sales increase of 7.4% at constant currencies. “The main contributors to this growth were our subsidiaries in Germany, France and the UK, all of which recorded higher than average growth and gained important market share,” the company noted. Excluding the group’s US business, Russell Stover, group full-year organic sales increased 7.4%.
The company’s brands in the rest of the world booked a revenue increase of 10.2% in the year. “The national markets belonging to this region are enjoying dynamic and higher-than-average growth rates. The results posted by Japan and Brazil were particularly impressive,” Lindt noted.
The company is due to deliver its full-year results in full on 7 March. The group predicted its operating margin will “increase within the strategical target range”. Lindt & Sprüngli added: “There will be a disproportionate increase in net profit due to a lower tax rate.”
MainFirst analyst Alain Oberhuber upgraded his model based on the group’s sales update. “We now expect that organic growth will increase to +7% (old +6%) for the next two consecutive years and expect EBIT margin improvement by 30 basis points (old +20 bps),” he wrote in a note to investors. “We now expect that the worst is over as Lindt’s adjustment in the US portfolio is done, distribution is optimised and Lindt & Sprüngli grew above average in high-margin markets like Germany, France and continues to gain market share in the vital UK market.”