Analyst insights

Lindt posts strong 2012 sales as Nestlé hovers, says analyst

By Oliver Nieburg

- Last updated on GMT

Lindt sales up as Nestlé hovers

Related tags Developed country Marketing Investment Lindt

Lindt & Sprüngli recorded strong sales growth in 2012 and could prove an attractive “end game” acquisition for fellow Swiss confectioner Nestlé, according to one analyst.

Lindt sales were up 7.3% to CHF 2.7 billion ($2.9 bn) in its full year results released today.

Strong in US

“With a continuing increase of investments in marketing and point-of-sale activities, together with innovative new product launches, the company’s seasonal and permanent business advanced strongly,”​ said Lindt in a statement.

John Cox, an analyst at Kepler Capital Markets, told that Lindt’s sales had accelerated during the second half of the year as the US market excelled and it benefitted from seasonal ranges and a recovery of the high chocolate segment, making it an attractive acquisition target to bigger players like Nestlé.

Consumers less price-conscious

Lindt was particularly strong in developed markets in Europe including Germany, France and the UK and also enjoyed growth in North America.

According to Cox, Lindt’s continuing strong performance in developed markets showed consumer attitudes had shifted.

“The consumer is changing somewhat and is not so cost-conscious,”​ he said.

Lindt also reported higher volumes and market share gains.

Lindt ‘the end game’ for Nestlé

Cox previously told this site that a larger company could come in for Lindt. Today he stood by his view.

He said, for Nestlé: “The most likely end game scenario would be Lindt.”

“Ultimately it will be another Swiss company and Nestlé fits the bill,”​ he said, adding that Ferrero had also been touted.

Emerging markets

Lindt reported progress in Australia and in emerging Asian markets.

The firm set up subsidiaries in Shanghai, China, and Moscow, Russia, during the year and plans to grow firstly in conventional urban sales channels and secondly through its global retail organization.

Cox said that Lindt would see growth in emerging markets in 2013, but it would take time for it to see strong results in Asia as consumers slowly developed an appetite for premium chocolate.

Lindt has forecast operating profit growth in 2013. It expects operating margins to reach the upper end of 20 to 40 basis points.

Related topics Manufacturers Chocolate Nestle Premium

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1 comment

Lindt, Nestle and Certified Sustainable Palm Oil

Posted by Diane West,

It is a shame that Lindt purchased NO certified sustainable palm oil in 2011 (reported to RSPO in June 2012). At least if Nestle buys Lindt, then progress would be made on this issue (Nestle intend to use 100% CSPO by end of 2013). Lindt will claim that they use a very small amount of palm oil (1025 tonnes) but if every small user fails to purchase CSPO, then deforestation and the loss of wildlife such as Orangs will continue.

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