Consumers still crave chocolate: Lindt & Sprüngli reports higher earnings
Lindt & Sprüngli reported chocolate sales of CHF2.16 billion ($2.43 billion) in the first half of the year, a slight increase from the previous year. The group's profitability also saw a modest rise during this period.
From January to June, Lindt & Sprüngli experienced organic growth of 7%, as detailed in a press release issued on Tuesday. The company reported growth across all regions.
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This growth is attributed to mid-single-digit price increases implemented to offset higher cocoa prices, along with increased sales volumes and mix effects. Volume/mix growth was recorded at 0.9%.
Operating profit (EBIT) rose by 14.6% to CHF292.3 million, outpacing sales growth. Consequently, the profitability margin increased to 13.5%, up from 12.2% in the first half of 2023.
The improvement in profitability was mainly driven by efficiency gains and price increases to counter higher raw material costs for cocoa. Additionally, a settled legal dispute in North America positively impacted other income.
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Net profit increased by 6% to CHF218 million. Lindt’s performance met analysts’ expectations for sales and exceeded them in all other key metrics.
Medium-term and annual targets confirmed
Lindt has reaffirmed its targets for the current year. The company aims for organic sales growth of 6% to 8% in 2024 and an improvement in the operating profit margin by 20 to 40 basis points, targeting 15.8% to 16.0%. This falls within the company’s medium to long-term target range, with the margin expected to be at the upper end of this spectrum.
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After completing a share buyback program of nearly CHF1 billion in March, which began in 2022, Lindt is now initiating another share buyback. The company plans to repurchase registered shares and participation certificates worth up to CHF500 million via a second line on the SIX Swiss Exchange starting August 2, according to a statement.
Adapted from German by DeepL/amva
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