Lindt & Sprüngli delivers continued growth trend with latest half-year figures
Lindt & Sprüngli held its annual press conference to discuss its results. Pic: Lindt
Swiss-based Lindt & Sprüngli premium confectionery brand has recorded strong half-year results, with sales up 7% to CHF 2.16 billion, with Europe providing its core area of growth, registering a 9.3% upturn, reports Neill Barston.
According to the luxury chocolate business, its improved position came as it moved to place a mid single-digit price increase across its portfolio of products to counter the sharp rise in prices for cocoa, which saw prices reach $12,000 a tonne in May, which have now dipped slightly to around $8000 on Futures markets in New York.
Notably, the company cited the successful resolution of a legal dispute in the US, which had contributed to its improved position. According to local reports, this related to a $33 million court victory over what has been described as a failed implementation of a warehouse distribution software system relating to a new distribution centre in Western America.
In its results filing, Lindt & Sprüngli recorded net income of CHF 218 million, though it noted that its cash flow had been impacted by capital expenditure for capacity expansion projects designed to bolster its future growth.
As previously reported by Confectionery Production, the group invested €100 in facilities at its Olten cocoa processing site, which represented a three-year project for the business, as its global activities continue to expand.
Significantly, growth was recorded in all regions over 9.3% to CHF 1.07 billion in the first half for Europe, with gains most pronounced in France, the United Kingdom, and Central and Eastern Europe, with double-digit growth. Italy, Germany, and Switzerland continued to show solid growth.
Furthermore, it noted that North America showed organic sales growth of 3.0% to CHF 794.6 million. Lindt & Sprüngli USA, Ghirardelli, and Lindt & Sprüngli Canada outperformed the market, gaining market share. The business said that moves including destocking by major retailers, and an earlier Easter date had impacted growth there, which had been projected to have otherwise been around 6%.
Meanwhile, the “Rest of the World” segment achieved strong organic sales growth of +10.0% to CHF 293.2 million. Notably, the subsidiaries in Japan and Brazil achieved double-digit growth rates in the first half of the year.
The group noted that energy prices had now stabilised, it noted that it would require mitigation measures to tackle the impact of rising cocoa prices through strict cost management, though further price increases.
Notably, it said that demand continued to shoe resilience with positive value sales development. However, with inflationary price effects, sales volumes in the global chocolate market have either stagnated or slightly declined depending on the product category and market. In these market conditions, Lindt & Sprüngli’s brands show strength and resilience, growing market share in all key markets, and we have been able to grow volume/mix by a solid +0.9% in this challenging market environment.
It also noted that its direct to consumer channels in retail and online had shown buoyancy during the year (up 15% year-on-year, driven by a demand for gifting. With around 530 stores around the world, it has continued its momentum with the addition of new locations. It observed that personalised options, such as with its Gold Bunny remained popular with consumers, led by strong interest in its Lindor brand.
In terms of its outlook, the company confirmed it remained confident it would hits growth target of around 6-8%, bolstered by its continued investment in stores, as well as cocoa processing facilities in Switzerland.
