Lindt & Sprüngli with “solid result” in difficult pandemic year

For the financial year 2020, the Lindt & Sprüngli Group reported sales of CHF 4.02 bn, equivalent to a decline of 6.1% in organic growth. Lindt & Sprüngli reported Group operating profit (EBIT) of CHF 420.3 m (- 29.1% compared to previous year). This represents an EBIT margin of 10.5% (previous year: 13.2%). Net income amounted to CHF 320.1 m (- 37.5% compared to previous year), providing a return on sales of 8.0%. Operating cash flow reached CHF 787.6 m (previous year: CHF 830.9 m). According to the company, the balance sheet is “still very solid” with a high equity ratio of 57.2%.

Despite the difficult market environment created by repeated local lockdowns, the region of Europe achieved a pleasing result, with only a modest decline of 2.9% in organic sales. Sales in the markets of Germany, the United Kingdom and Spain actually increased, with Eastern Europe and Scandinavia (Nordic) even reporting double-digit growth. The home market of Switzerland suffered especially from the sharp decrease in frequency at top tourist destinations and the temporary closures of the own shops. The subsidiaries in Italy and Austria also had to cope with the decline in tourism. In addition, traditional trade in Italy, an important retail channel for the business, was almost completely closed.

The North America region was severely affected by the pandemic and reported a decline of 6.8% in organic growth. Nevertheless, significant market share gains were achieved in the chocolate bar segment for Lindt and Ghirardelli, as well as in Russell Stover’s sugar-free product line. The losses were partly offset by rising self-consumption of chocolate bars and the great success of the baking products segment at the subsidiary Ghirardelli. The subsidiary Russell Stover, whose main activity is in the gifting segment, suffered particularly from the restrictions imposed during the pandemic at Easter and Christmas. 

The Rest of the World segment recorded a decrease of 16.1%, in particular due to the sharp decline in the Travel Retail business and the frequent temporary shop closures resulting from the lockdowns. Positive news included strong sales increase and market share gains in the important growth markets of China and Japan. Although the Duty Free business started the financial year 2020 with double-digit sales growth, the all-year travel restrictions triggered a steep decline in sales.

Online sales doubled to around 5% of Group sales. The plan is to proceed with this positive development in 2021 with the launch of new e-shops in different countries. From own shops through to e-shopping and corporate gifting, teleshopping, and subscription programs – all these channels are part of an overarching omni-channel strategy designed to ensure a seamless consumer experience across all platforms. 

For the year 2021, Lindt & Sprüngli expects to reach organic sales growth of 6-8% and confirms thereafter its unchanged medium to long term organic sales growth target of 5-7% p.a.