Lindt & Sprüngli with double-digit organic sales growth

 

Despite a slowdown in the global chocolate market, the Group is able to report a moderate volume/mix growth. Most of the growth is attributable to price increases as a result of higher raw material prices and inflationary pressure on other cost items.

Chocoladefabriken Lindt & Sprüngli AG achieved sales totaling CHF 5.20 bn (previous year: CHF 4.97 bn) in the fiscal year 2023, marking a robust organic growth of 10.3%. Currency effects, in particular the weakening of the US dollar and the Euro, led to a lower growth figure in Swiss Francs of 4.6%. Operating profit (EBIT) saw a significant rise of 9.2% year-on-year, reaching CHF 813.1 m (previous year: CHF 744.6 m). This results in an EBIT margin of 15.6%, (previous year: 15.0%).

Net income also showed a notable increase, climbing to CHF 671.4 m (previous year: CHF 569.7 m), resulting in a return on sales of 12.9% (previous year: 11.5%). This includes a one-time impact on taxes; excluding this one-time tax impact, the net income would have increased by 5.6% to CHF 601.7 m (11.6% of sales). Free cash flow stood at CHF 476.8 m, with a cash flow margin of 9.2%. The Group’s balance sheet remains solid. As of December 31, 2023, the equity ratio was 54.2% (previous year: 55.4%).

The European segment, the region with the highest sales, posted sales of CHF 2.41 bn (previous year: CHF 2.30 bn). The region grew organically by 9.1%, with double-digit growth in many European markets, including Switzerland, Italy, the UK, and Eastern Europe. The Group also generated solid growth in Germany and France. 

In 2023, the North American segment increased sales to CHF 2.11 bn (previous year: CHF 2.03 bn), with an organic growth of 11.0%. Lindt & Sprüngli is gradually expanding its presence in the USA, the world’s largest chocolate market. In the USA, the focus remains on the premium segment, which is served by the global brand Lindt and the local premium brands Ghirardelli and Russell Stover. Lindor remains the bestseller. The Lindt and Ghirardelli brands once again recorded double-digit growth rates during the reporting period. Russell Stover, which celebrated its 100th anniversary in 2023, posted mid-single-digit growth.

In the Rest of the World segment, sales increased to CHF 0.68 bn (previous year: CHF 0.65 bn). Organic growth was 12.9%. Business was particularly strong once again in Japan and Brazil, with Australia maintaining its position as the country with the largest sales revenue in this segment. Following the easing of Covid measures the Chinese economy recovered slowly, nevertheless, Lindt & Sprüngli`s business achieved a high single-digit growth, outperforming the stagnating Chinese chocolate market. The Group remains confident that the Chinese market will continue to develop in the years to come.

Global Retail, where Lindt & Sprüngli operates shops and e-shops under the Lindt, Ghirardelli, and Russell Stover brands, made significant gains in the reporting year. Sales in the shops posted double-digit organic growth in all market regions (overall 16.5%). On the one hand, this can be attributed to higher sales by the individual shops while on the other hand, the Group opened new shops in the course of the year. By the end of the year, the Lindt & Sprüngli Group had 523 shops worldwide. 
The Global Travel Retail business, where Lindt products are sold in duty-free shops, returned almost to pre-Covid levels; this distribution channel benefited from the return to high passenger numbers. Organic sales grew by 20.1%. This is partly explained by base effects, especially as the business was still suffering from Covid restrictions in the first quarter of 2022.