Lindt & Sprüngli to benefit from tax effect in 2023
Published: Tuesday, Mar 5th 2024, 07:31
Updated At: Wednesday, Mar 6th 2024, 00:59
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Lindt & Sprüngli became more profitable last year and benefited from lower taxes on net profit. Shareholders will now receive a 100 franc higher dividend.
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.
Turnover, which the company had already reported in January, grew comparatively less strongly at 4.6% in Swiss francs. The EBIT margin rose accordingly to 15.6% after 15.0% in the previous year.
Higher distribution
The bottom line was a net profit of 671.4 million francs. This is 17.9 percent more than in the previous year. A tax reduction that Lindt had already announced had a noticeable effect here. As a result of the introduction of global minimum taxation and the Tax Reform and AHV Financing (STAF) bill, the tax rate in Switzerland was a one-off low of 15 percent. The company normally pays 23 to 25 percent of its turnover in taxes. However, according to the press release, net profit would have increased by 5.6 percent to CHF 601.7 million even without this one-off tax effect.
Shareholders are now to benefit from the higher profit in the form of a higher dividend. Holders of Lindt registered shares - one of the most expensive shares in the world with a market value of CHF 107,000 - will receive a CHF 100 higher dividend of CHF 1,400 per share. The dividend on the participation certificate (market value: CHF 10,880) 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.
Medium-term and annual targets confirmed
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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