Tue, Mar 5th 2024
Lindt & Sprüngli’s profitability soars with a 9.2% EBIT increase and a significant net profit jump, rewarding shareholders with an enhanced dividend.
Lindt & Sprüngli became more profitable last year and also benefited from lower taxes on its net profit. Shareholders will now receive a dividend that is CHF 100 higher.
Lindt posted an operating profit (EBIT) of 813.1 million Swiss francs in the 2023 financial year. This corresponds to an increase of 9.2 percent compared to the previous year, as the company announced on Tuesday.
Sales, which Lindt had already announced in January, grew comparatively less strongly at 4.6 percent in Swiss francs. The EBIT margin rose accordingly to 15.6 percent after 15.0 percent in the previous year.
The bottom line was a net profit of 671.4 million francs. This is 17.9 percent more than in the previous year. Due to a tax reduction that Lindt had already announced.
In Europe, Lindt’s strongest sales region, the company grew organically by 9.1 percent to CHF 2.4 billion. However, North America is increasingly catching up with Europe.
There, Lindt achieved organic growth of 11.0 percent to CHF 2.11 billion. The Rest of the World region even grew organically by 12.9 percent, albeit to a comparatively low 680 million.
The Global Travel Retail division, i.e. Lindt’s airport stores in the duty-free sector around the world, managed another recovery after the pandemic and grew organically by 20.1 percent. It is now almost back to pre-Covid levels, according to reports.
In addition, sales in Lindt’s own stores continued to grow in all regions, organically by 16.5 percent in total. According to the press release, this is due to increased sales as well as the fact that Lindt has opened a number of new stores. The number of company-owned stores amounted to 523 at the end of 2023.
Lindor chocolate balls were once again the Group’s most successful product. They achieved double-digit growth everywhere, including in the USA, the world’s largest chocolate market according to Lindt.
Shareholders are now to benefit from the higher profit in the form of a higher dividend. Holders of Lindt registered shares – one of which is currently one of the most expensive shares in the world with a market value of CHF 107,800 (closing price Monday) – will receive a dividend of CHF 1,400 per share, an increase of CHF 100. The dividend on the participation certificate (market value: CHF 10,950) will increase by CHF 10 to CHF 140.
With the results presented, Lindt & Sprüngli exceeded analysts’ estimates for EBIT, net profit and dividends according to the AWP consensus. In terms of margin, analysts had expected the 15.6 percent achieved.
Meanwhile, the company has confirmed its targets for the current year. As is well known, Lindt wants to achieve organic sales growth of 6 to 8 percent in the current year and improve the operating profit margin by 20 to 40 basis points, i.e. increase it to 15.8 to 16.0 percent. This is also within the company’s medium to long-term target corridor.
Management expects further price increases in 2024 and beyond. This is because the cocoa price in 2023 was 62% higher than in the previous year and will be more than 40% higher again in 2024. If cocoa prices remain at the current level, this will “result in further price increases in 2024 and 2025 despite the hedging strategy and higher inventories,” it says.
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