Lindt & Sprüngli gains further market shares in a challenging environment

Lindt & Sprüngli reported sales worth CHF 2.52 billion in 2009 (previous year: CHF 2.57 billion). This is equivalent to an organic growth of 2.3% in local currency terms. As already implemented in the first half of 2009, payments to trade partners for services rendered are now deducted from sales and no longer booked as operating expenses. The turnover of the previous year was restated accordingly. Due to adverse exchange-rate factors, annual sales in Swiss francs decreased by 1.9% In view of the challenging situation on the markets for premium and luxury products, this sales growth in local currency terms is a satisfactory result.
According to the company sales in the USA, together with Canada and Australia, showed above average development especially in the second half of the year. In the USA, Lindt and Ghirardelli were once again the fastest growing chocolate brands in 2009, and reported further substantial market share gains. On the other hand, in most European countries negative consumer sentiment, combined with very cautious ordering by the trade, brought only modest growth. Further proliferation of the hard discounters in which Lindt products are not available because of the selective distribution strategy, and demand for private labels which increases particularly strongly in times of crisis, had a corresponding impact on the premium business. Due to a very weak overall trend on the market as a whole, rising market shares were nevertheless gained.
In Italy, the ongoing shift from the traditional trade – in which Lindt has an above average and Caffarel an exclusive presence – towards modern distribution channels had a noticeable influence. Sales via modern trade channels on the other hand proceeded dynamically. The distribution business was affected by the difficult position of the importers, who were additionally confronted with financial problems on their home markets and unpredictable exchange-rate movements. Duty-free sales declined because of the strong fall in airline passenger numbers. The operating profit (EBIT) expected at the end of 2009 will be at the lower end of the range announced last spring of CHF 260 - 280 million.
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