Kilchberg / CH. (ls) With an above market average increase of sales and earnings, Swiss Lindt + Sprüngli AG reported a successful financial year 2013 in every respect in what continues to be a challenging market environment, and won additional market shares. The good annual financial statement once again highlights the reliability of the Group´s long-term strategic goals. The Group´s above average growth is based mainly on higher volumes in key markets and on progressive geographical expansion; here, the Global Retail division is an increasingly important sales factor with its own sales network. All the subsidiary companies contributed to the good results.
The prevailing economic conditions differed from one country to another. While a few countries reported a slight recovery, the economy in Southern Europe remained depressed with an adverse impact on consumer sentiment. Against this challenging background, Lindt + Sprüngli achieved Group sales of 2’883 million CHF in the past financial year. In local currency terms, this is equivalent to organic growth of 8,6 percent, well above the market average. The long-term strategic growth target of six to eight percent was therefore slightly exceeded. Although the value of the Euro rose somewhat in 2013, sales growth in Swiss Francs terms was slightly lower with a gain of 8,0 percent because of the weaker exchange rates of a number of other currencies such as the USD, CAD, AUD and GBP.
As a consequence of the good sales performance which was supported by all the subsidiaries and is based mainly on higher volumes, additional market shares were gained in all the key markets and also in the new emerging regions where «Lindt» is continuing to pursue its geographical expansion. A large number of innovative new launches and increased marketing activities further accelerated the sales dynamics in the year-round business and also in the seasonal range. The share of Group sales accounted for by the Global Retail Division with some 200 own outlets, boutiques and «Lindt» Chocolate Cafés is growing steadily and reached around nine percent in 2013. Own distribution concepts are vitally important, especially in gaining access to new markets with no strong chocolate tradition, in order to establish the premium brand values of «Lindt» and enhance familiarity with the brand.
IAS 19 (revised) «Employee Benefits» was applied for the first time when preparing the 2013 financial statements. The previous year´s comparatives of the balance sheet and the income statement have been restated accordingly. The operating profit (Ebit) was 22,4 percent higher at 404,1 million CHF (previous year: 330,1 million CHF). The Ebit margin improved to 14,0 percent in the year 2013. With a return on sales of 10,5 percent, the net profit stood at 303,0 million CHF (previous year: 244,9 million CHF), in other words 23,7 percent above the previous year´s figure. The operating cash flow rose to 419,1 million CHF (previous year: 381,2 million CHF).
The rapid growth in Europe and North America and the access to new markets call for clear strategic objectives and a structured action plan which also makes includes the expansion and optimization of production performance. Investments made in 2013 accordingly stood at 191,4 million CHF (previous year: 144,6 million CHF) and concentrated mainly on the constant extension of production capacities and quality optimization through new technologies and processes.
The balance sheet and capital structure are extremely sound. The equity ratio and net liquidity stood at 67,9 percent (previous year: 64,2 percent) at the end of 2013 and 723 million CHF (previous year: 543 million CHF). The new share buyback program initiated in fall 2013 for a maximum of five percent of the registered share and participation capital will be completed by the end of 2014. As of December 31, 2013, no registered shares and 1’682 participation certificates had been bought back. The total volume of these purchases stood at 6,5 million CHF.
Outlook for 2014
The Group Management is assuming that the economic situation will continue to recover somewhat, if only slowly, in the year 2014. However, high raw material prices and the volatile trend of the exchange rates of important foreign currencies will continue to present major challenges. What is more, sustained competition in the retail trade is placing ever-increasing pressure on prices to which the weaker brands in particular are increasingly exposed. Thanks to continuous investments in the brand and in the markets, Lindt + Sprüngli is perfectly equipped to master these challenges and to attain its long-term strategic goals again in the financial year 2014.
