Swiss chocolate group Lindt & Sprüngli has revealed it was able to grow its profits in 2011 and insisted that it expects to meet its growth targets in 2012, despite dampening consumer sentiment and the Eurozone debt crisis.
In its annual report, released this morning (1 March), the chocolate maker said its operating profit (EBIT) increased 1% to CHF328.7m in 2011. Profits as a percentage of sales also rose from 12.6% to 13.2%, the company added.
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As previously announced, the company confirmed that sales in the year fell to CHF2.49bn, down from CHF2.58bn in 2010. Lindt said that this decrease was the consequence of the strong Swiss franc, with currency exchanging trimming 9.5% off value sales.
Organic sales were up 6%, the company said. However, organic gains trailed 2010 levels, when organic sales increased 7.3%.
Lindt chairman and CEO Ernst Tanner revealed that the company had been able to grow its market share in all major global markets, excluding Australia. In Switzerland, the group reached a milestone this year when it recorded its highest share of its domestic market.
However, Tanner emphasised that the debt crisis and rising unemployment had hit demand for Lindt’s upmarket chocolate products in Europe, particularly in the second half of 2011.
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By GlobalData“The debt crisis gradually spread to more and more eurozone countries, creating massive uncertainty, not just for the financial sector but also for large parts of the population. As a result, unemployment rates in some countries rose significantly and consumer sentiment was correspondingly depressed,” he said in his report to shareholders.
Tanner predicted that these pressures would continue to have an impact on sales in 2012, creating a high degree of uncertainty.
“The debt crisis is spreading more and more widely and increasingly influencing the global, financial and economic scene,” he said. “This situation is compounded by volatility on the commodity markets and the uncertainty felt by consumers because of the worsening employment market.”
Nevertheless, Lindt said it is “well-placed” to face these challenges and confirmed its guidance of sales growth of 6% to 8% and an increase in operating profit margin of 20 to 40 basis points.
