Lindt maintains global sales volumes but warns of more price rises
Last year, Lindt increased its prices by approximately 4% due to the rising cost of packaging and raw materials, including milk and sugar. "I would expect the price increases to be in the same area as they were last year," said Adalbert Lechner, who took over as Chief Executive from Dieter Weisskopf in October.
In terms of regions, the company confirmed that its European segment generated sales of CHF 2.30 billion (previous year: CHF 2.33 billion), which corresponds to organic growth of 5.3%. Lindt’s core markets in central Europe, are still Germany, France, the UK, Italy, and Switzerland posting positive growth margins, while its markets in Eastern and Northern Europe achieved double-digit growth rates. The company has shuttered its main business interests in Russia due to the war in Ukraine, otherwise, Europe would have achieved organic growth of 6.4%, the company revealed in its 2022 Full-Year Results.
Lindt’s growth rate in North America has also been encouraging, yielding sales of CHF 2.03 billion in the financial year under review (previous year: CHF 1.69 billion). This corresponds to an impressive organic growth of 15.7%, faster than the market as a whole in the world’s largest chocolate market.
In a conference call to analysts and media, Lechner described Lindt & Sprüngli’s exit from Russia last year as more of an “emotional impact”, although the withdrawal weighed on sales, he declined to reveal the effect on profits.
“We made sure, as we decided in March 2022, that we first of all close all our retail stores and secondly stopped all the exports from Switzerland. So we only sold off the inventories that we had physically in Russia. But we made a clear commitment to all the employees that we would employ them until the end of 2022, which we did. We also cooperated right from the beginning with the authorities in Russia. So we did not face any issues in winding down the business.”
Last year, Lindt & Sprüngli forged ahead with its sustainability efforts. Through the Lindt & Sprüngli Farming Programme, cocoa beans are already procured on a fully traceable and externally verified basis. In addition, other cocoa countries of origin have been included in the Farming Programme. The Group is working intensively to reduce its greenhouse gas emissions. Once the carbon footprint has been fully recorded, the Group's detailed science-based targets (SBTs) will be published in 2023. Using this as a basis, Lindt & Sprüngli will develop its roadmap for reducing greenhouse gas emissions and develop measures to reduce them, the Group revealed.
Lindt & Sprüngli is preparing for the fact that the current economic conditions - characterised by high inflation and volatility - will continue in most markets. Nevertheless, the Group said it remains committed to its long-term strategy. “For the medium to long-term targets, we expect organic growth of 6 to 8% per annum, as well as an improvement in the operating margin of 20 to 40 basis points per annum. Lindt & Sprüngli remains committed to these goals for 2023.”