Lindt + Sprüngli: beats sales forecasts

Kilchberg / CH. (ls) Despite a difficult market environment, Lindt + Sprüngli Group managed to increase its sales once again and meets the long-term strategic sales target. The Group continues to significantly outperform the chocolate markets as a whole, which still lack major growth drivers. Market share gains were achieved in all strategically important markets. The integration of Russell Stover/Whitman’s, the largest acquisition in the history of the Lindt + Sprüngli Group, is well on track. Overview:

• Strengthened market position in all strategically important markets
• Group sales increase in local currencies +13.5 percent
• Negative currency translation effect of -5.6 percentage points
• Group sales in Swiss francs rise to 3.65 billion CHF (+7.9 percent)
• Organic growth of the Lindt + Sprüngli Group: +7.1 percent
• Integration of Russell Stover/Whitman’s on track

2015 was a year of major uncertainties. A strong Swiss Franc, high raw material prices for chocolate manufacturers, weaker currencies in oil-exporting countries, extensive restructuring at major customers, the unsettling effects of terrorist threats and concerns about deflation and unemployment all had an adverse effect on consumer sentiment. A hot summer and the late onset of winter deepened this somber mood. Despite this extremely challenging market environment, Lindt + Sprüngli once again managed to achieve significantly higher sales growth than the chocolate market as a whole and was able to expand its market shares in all strategically important markets.

Group sales amounted to 3.65 billion CHF, equivalent to 13.5 percent growth in local currencies. As in previous years, the Swiss Franc strengthened against the major currencies, which had a negative impact of 5.6 percentage points on consolidated sales figures. With this element factored in, sales increased by 7.9 percent in Swiss Francs. Lindt + Sprüngli Group organic sales growth was 7.1 percent – well within the strategic target range of six to eight percent.

Organic growth in the Europe segment amounted to 5.4 percent in local currencies, with every country making a solid contribution to this positive development. Lindt + Sprüngli UK achieved double-digit growth; great performances were also reported by Germany and France, the Group’s biggest European subsidiaries.

The NAFTA region, which now also includes the newly acquired US chocolate manufacturer Russell Stover/Whitman‘s, achieved organic growth of 7.9 percent. Although the integration of Russell Stover is a challenging task, it is progressing very well and according to plan. In 2015, Russell Stover eliminated promotions and activities that were unprofitable or incompatible with the overall business strategy. With the brands Lindt, Ghirardelli and Russell Stover/Whitman’s the group takes now third place in the world’s biggest chocolate market and is the clear leader in the premium segment worldwide. This strong overall market position and the No. 1 position in the premium segment will make Lindt + Sprüngli an ever increasing important and influential partner with the retail trade. Based on quality products, strong marketing actives and constant innovation, Lindt + Sprüngli will act as strong growth driver for the premium segment which will continue to outperform the overall chocolate market.

The Rest of the World segment reported organic growth of 11.4 percent. Subsidiaries in Australia, Japan, Russia and Brazil made particularly good progress, recording double-digit growth.

The Global Retail Division is making an increasingly important contribution to the Group’s sales and growth. Another 52 own retail stores were added to the global network in 2015. In Brazil alone, 16 Lindt boutiques opened in prime locations during the year. The sales generated by Lindt + Sprüngli’s network of retail outlets now account for more than ten percent of overall Group sales. Global Retail thus makes not only a significant contribution to the Group’s financial success, but continues to strengthen the global image and recognition of the Lindt + Sprüngli brands.

Outlook: Operating profit (Ebit)

With the first-time consolidation of Russell Stover for the full twelve months of the financial year – despite the resulting burden of writing down goodwill and one-off costs of integrating the business into the Lindt + Sprüngli Group structure, the operating profit margin for 2015 is expected to be at least at last year`s level.