Lindt & Sprüngli today (16 March) revealed that its full-year profits dropped by over one-third as the economic downturn hit demand for its premium chocolate products.
According to the Swiss chocolate maker, the global economic crisis saw the chocolate market go into decline for the first time in ten years. Price conscious consumers also increasingly looked to own label products, the company said.
In January, the company had revealed that annual sales in Swiss francs decreased by 1.9%.
Lindt & Sprüngli, which said earnings fell 35.4% during fiscal 2009, said that currency fluctuations and higher cocoa prices also dented profitability.
During the 12 months, Lindt & Sprüngli said profits dropped to CHF193.1m, down from CHF261.5m last year.
Looking to the coming year, the Swiss chocolatier warned that uncertainties in the commodity markets were likely to continue, with swings in cocoa prices expected to impact results.
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Consumer sentiment is expected to remain subdued due to rising unemployment, the company continued. Currency fluctuations were likely to be another factor affecting the group’s performance in the coming 12 months.
Nevertheless, Lindt & Sprüngli did suggest that its operating performance would improve – albeit “slowly” – in the second half of the year.
Lindt & Sprüngli said that it would look to expand in Asia as well as its identified growth markets – the UK, China, Russia and Scandinavia.