Solid results in North America for Lindt & Sprüngli and positive sales growth in the United Kingdom (despite political disruptions such as Brexit), Germany and Austria allowed the Swiss chocolate maker to award its shareholders a proposed sweeter payout to mark its 175th anniversary, increasing its dividend by 75%.
Net profit increased by 5.1% to 511.9 million Swiss francs ($534.57 million) last year and profitability also improved, the company said, proposing to pay out a dividend of 1,750 francs per registered share for 2019.
North America region
The North America region achieved strong organic sales growth of 5.4%. All three brands – Lindt, Ghirardelli and Russell Stover – contributed equally to this solid result, the company said in a statement.
During the past year, a number of important strategic decisions were taken to improve efficiency on the sales, production and logistics side of the three US subsidiaries. In January (2020) merchandising for the three brands Lindt, Ghirardelli and Russell Stover was outsourced to a specialized third-party provider.
This will allow Lindt greater flexibility in the deployment of resources during its busiest seasons. Another important decision was taken affecting the Russell Stover production - its oldest manufacturing facility in Montrose, Colorado will close in 2021 and production moved to sites in Kansas and Texas, which will be expanded.
“This measure allows production efficiency to be optimized and capacities to be increased, while at the same time creating additional jobs at the remaining production sites,” said Lindt.
The third measure involves the closure of existing warehouses as part of the consolidation of the US logistics network already initiated two years ago.
“The cost savings created by the measures will improve the result of the US business in future, while at the same time providing greater support for the brands in achieving additional sustainable and profitable sales growth.”
“For the coming years, Lindt confirmed its existing mid- to long-term organic sales growth target of 5-7% p.a., combined with a steady improvement in the operating margin of 20-40 basis points p.a. In achieving these targets, Lindt will continue to grow faster than average in all its markets. Lindt & Sprüngli continues to pursue with the global expansion plans in 2020,” it said.
Lindt will be celebrating its 175th anniversary at the company’s headquarters in Kilchberg, Switzerland. It will open its doors to the public on May 10, 2020, on Swiss Mother’s Day for an interactive multimedia exhibition, a pilot plant with show production, and the largest Lindt Chocolate Shop in the world offering chocolate-making courses to visitors.
Lindt & Sprüngli Group – Key figures at a glance
• Group sales up 6.1% organic growth to CHF 4.51 billion (+4.5% in CHF)
• Operating profit (EBIT) up 6.0% to CHF 675 million; EBIT margin 15.0% (+20 BP) (before one-off effects)
• Net income CHF 512 million (5.1%); return on sales 11.4% (2018: 11.3%)
• Anniversary dividend of CHF 1,750 per registered share, CHF 175 per PC
• Free Cash Flow CHF 529 million; CHF +135 million