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Lindt: growing faster than the overall chocolate market

Kilchberg / CH. (ls) In the financial year 2018, Lindt + Sprüngli Group achieved solid sales growth, gained substantial market shares and once again grew faster than the overall chocolate market. The regions «Europe» and «Rest of the World» achieved particularly impressive results. Other highlights were the consistently dynamic expansion of the Group’s own retail network, with around 50 additional shops and cafés worldwide, and double-digit growth reported for the top-selling Lindor brand.

The market environment remained very challenging. Chocolate markets are saturated in Europe and the USA, while mounting price pressure is transforming the retail landscape. Despite this, the premium chocolate market as a whole continues to grow and support the Group’s positioning as a global premium manufacturer – a trend that Lindt + Sprüngli can certainly benefit from.

Lindt + Sprüngli’s Group sales amounted to CHF 4.313 billion, equivalent to a +5.5 percent increase in Swiss francs. The currency environment in 2018 was again volatile. Thus, consolidated results in Swiss Francs show a slightly positive currency effect, mainly due to a stronger Euro. The organic sales growth of the Lindt + Sprüngli Group was +5.1 percent and therefore within the target range set for the financial year.

Lindt + Sprüngli achieved solid organic growth of +5.6 percent in Europe. European chocolate markets are mainly characterized by flat or even negative growth rates. It is therefore even more impressive that Lindt + Sprüngli managed to expand its market shares in all countries and to grow faster than the market average. Sales growth was particularly strong in the United Kingdom, Germany, Austria and Spain, while all the Eastern European subsidiaries even reported double-digit growth.

In the Nafta region, where markets are exposed to flat growth and price pressure, organic sales growth amounted to +2.8 percent. One highlight in the region was the outstanding double-digit growth achieved by Lindt + Sprüngli in Canada. Lindt USA and Ghirardelli also reported sales growth and outperformed the overall market. There was a slight decline in Russell Stover’s business. Christmas sales were satisfying and the Valentine’s Day range has been well accepted by trade partners. The sugar-free chocolate line with stevia extract also performed well and extended its market share. Moreover, a re-launch of the top-selling assorted pralines for 2019 received a positive feedback from retailers.

In addition, substantial investments were made in the expansion of the logistics network across the entire North American market, laying the foundation for profitable sales growth in the future in this region. With the three brands Lindt, Ghirardelli and Russell Stover, the Group remains No1 in the premium segment and No3 in the US chocolate market.

The Rest of the World once again boosted sales by +10.3 percent in the 2018 financial year and is becoming increasingly important for the Group. The markets of Japan, South Africa, Brazil and China all managed to achieve double-digit growth and hold substantial growth potential for the future. Another highlight in this segment was the double-digit growth in the global distributors business. Lindt + Sprüngli is represented by distributors in over 100 countries.

Global Retail once again made a notable contribution to the overall Group result with double-digit growth and around 50 additional shops at prime sites across the world. The number of shops worldwide grew to 460 and they attracted more than 80 million visitors in 2018. The biggest drivers for the retail business were mainly Germany and Japan, with over 10 openings each.

Outlook

The Group’s operating margin in the financial year 2018 is expected to increase within the medium to long-term strategic target range. Supported by stronger growth in the NAFTA region, Lindt + Sprüngli anticipates sales growth of 5 to 7 percent in the mid- to long term and a steady improvement in the operating margin of 20 to 40 basis points. This should allow Lindt + Sprüngli to continue to grow faster than average in all the markets.