Lindt claims partial immunity from economic downturn as profits surge
Lindt & Sprüngli’s operating profit rose 10.3% in 2012 and the company has declared itself “partially unaffected” by the continuing economic downturn as consumers still seek quality chocolate in tough times.
The company released its full-year 2012 results today and declared sales of CHF 2.67bn ($2.83bn), up 7.3% on last year, and a 10.3% rise in operating profit (EBIT) to CHF 362.5m ($382.9).
Lindt: High quality choc excels even in hard times
“Our experience as a premium chocolate manufacturer confirms that Lindt quality chocolate is relatively unaffected by prevailing economic sentiment and that consumers are reluctant to abstain from high product quality and an excellent taste experience, even in tough times,” said Lindt in a statement.
The company reported market share gains in every country except Italy and Spain, which have been hard hit by the economic crisis. The company warned that rising unemployment might undermine consumer mood in Southern Europe.
Market performance
Ernst Tanner, Lindt chairman and CEO, said: “The global market for chocolate is scarcely growing today. Despite this environment, our key European sales markets, led by Germany, France and England, reported a particularly favorable trend.”
The firm’s sales grew 2.3% in its Swiss domestic market, and it is expecting the weakening of the Swiss franc to have a favorable impact on Swiss exports.
North America reported double digit growth through the Lindt and Ghirardelli brands. Lindt said in its annual report that the US was now its “biggest single market”. In 1992, over 80% of sales were generated in Switzerland, Germany and France.
Emerging markets: Russia and China
For 2013, the company has forecast organic growth of 6 to 8% and an increase in its operating profit margin by 20 to 40 basis points.
“Here, not only the key markets in Europe and North America but also the new emerging markets in Russia, Asia and South America will play a role,” said the firm.
The company hopes to establish Lindt as a premium chocolate brand in emerging markets after establishing subsidiaries in Moscow and Shanghai last year.
Lindt said in its annual report that its global retail organization set up in 2009 was helping it build brand awareness in emerging markets.
$265m on charitable projects
Lindt also announced that CHF 250m ($265m) would be spent on two charitable foundations. The Lindt & Sprüngli Cocoa Foundation will concentrate on sustainable cocoa and Lindt & Sprüngli Chocolate Center will focus on research and training. Lindt sources cocoa from Ghana, Ecuador and Madagascar.
