MEDIA RELEASE
Financial year 2013
- Lindt & Sprüngli Group continues to grow faster than the chocolate markets as a whole and wins new market shares
- Sales growth of 8.0% in CHF terms to CHF 2.883 billion, organic growth of 8.6%
- Operating profit up 22.4%(*) at CHF 404.1 million (EBIT margin: 14.0%(**))
- Net profit 23.7%(*) higher at CHF 303.0 million (return on sales: 10.5%(**))
- Proposal for a dividend increase of 13%
- Confirmation of long-term growth and earnings targets
(*) Previous year’s figures restated according to IAS 19 (revised) “Employee Benefits”
(**) Before restatement: increase of EBIT margin: +40 basis points / increase of net income margin: +30 basis points
Kilchberg, March 11, 2014, – With an above market average increase of sales and earnings, Lindt & Sprüngli reported a successful financial year 2013 in every respect in what continues to be a challenging market environment, and won additional market shares. The good annual financial statement once again highlights the reliability of the Group’s long-term strategic goals. The Group’s above average growth is based mainly on higher volumes in key markets and on progressive geographical expansion; here, the Global Retail division is an increasingly important sales factor with its own sales network. All the subsidiary companies contributed to the good results.
The prevailing economic conditions differed from one country to another. While a few countries reported a slight recovery, the economy in Southern Europe remained depressed with an adverse impact on consumer sentiment. Against this challenging background, Lindt & Sprüngli achieved Group sales of CHF 2.883 billion in the past financial year. In local currency terms, this is equivalent to organic growth of 8.6%, well above the market average. The long-term strategic growth target of 6 to 8% was therefore slightly exceeded. Although the value of the EUR rose somewhat in 2013, sales growth in CHF terms was slightly lower with a gain of 8.0% because of the weaker exchange rates of a number of other currencies such as the USD, CAD, AUD and GBP.
As a consequence of the good sales performance which was supported by all the subsidiaries and is based mainly on higher volumes, additional market shares were gained in all the key markets and also in the new emerging regions where LINDT is continuing to pursue its geographical expansion. A large number of innovative new launches and increased marketing activities further accelerated the sales dynamics in the year-round business and also in the seasonal range. The share of Group sales accounted for by the Global Retail Division with some 200 own outlets, boutiques and LINDT Chocolate Cafés is growing steadily and reached around 9% in 2013. Own distribution concepts are vitally important, especially in gaining access to new markets with no strong chocolate tradition, in order to establish the premium brand values of LINDT and enhance familiarity with the brand.
IAS 19 (revised) “Employee Benefits” was applied for the first time when preparing the 2013 financial statements. The previous year’s comparatives of the balance sheet and the income statement have been restated accordingly. The operating profit (EBIT) was 22.4% higher at CHF 404.1 million (previous year: 330.1 million). The EBIT margin improved to 14.0% in the year 2013. With a return on sales of 10.5%, the net profit stood at CHF 303.0 (previous year: 244.9 million), in other words 23.7% above the previous year’s figure. The operating cash flow rose to CHF 419.1 million (previous year: CHF 381.2 million).
The rapid growth in Europe and North America and the access to new markets call for clear strategic objectives and a structured action plan which also makes includes the expansion and optimization of production performance. Investments made in 2013 accordingly stood at CHF 191.4 million (previous year: CHF 144.6 million) and concentrated mainly on the constant extension of production capacities and quality optimization through new technologies and processes.
The balance sheet and capital structure are extremely sound. The equity ratio and net liquidity stood at 67.9% (previous year: 64.2%) at the end of 2013 and CHF 723 million (previous year: CHF 543 million). The new share buyback program initiated in fall 2013 for a maximum of 5% of the registered share and participation capital will be completed by the end of 2014. As of December 31, 2013, no registered shares and 1,682 participation certificates had been bought back. The total volume of these purchases stood at CHF 6.5 million.
Outlook for 2014
The Group Management is assuming that the economic situation will continue to recover somewhat, if only slowly, in the year 2014. However, high raw material prices and the volatile trend of the exchange rates of important foreign currencies will continue to present major challenges. What is more, sustained competition in the retail trade is placing ever-increasing pressure on prices to which the weaker brands in particular are increasingly exposed. Thanks to continuous investments in the brand and in the markets, Lindt & Sprüngli is perfectly equipped to master these challenges and to attain its long-term strategic goals again in the financial year 2014.
Key figures for the Group | ||||
2013 | 20121) | Change | ||
Sales in CHF | CHF million | 2,882.5 | 2,669.5 | 8.0% |
Organic growth (in local currencies) | % | 8.6% | ||
Operating profit (EBIT) | CHF million | 404.1 | 330.1 | 22.4% |
- as % of sales (EBIT margin) | % | 14.0 | 12.4 | |
Net income | CHF million | 303.0 | 244.9 | 23.7 % |
- as % of sales (return on sales) | % | 10.5 | 9.2 | |
Operating Cash Flow | CHF million | 419.1 | 381.2 | 9.9% |
- as % of sales | % | 14.5 | 14.3 | |
Shareholders’ equity as of 31 December | CHF million | 2,634.7 | 1,694.4 | 55.5% |
- as % of total assets | % | 67.9 | 64.2 | |
Average number of employees | 8,949 | 8,157 | 9.7% | |
- sales per employee | TCHF | 322.1 | 327.3 | -1.6% |
1) Previous year’s figure restated according to IAS 19 (revised) “Employee Benefits”
DIVIDEND:
Annual Shareholders’ Meeting on April 24, 2014
In view of the achieved increase in sales and profit, the Board of Directors proposes at the upcoming annual shareholders’ meeting a dividend of CHF 650.- for registered shares (CHF 555.– from a withholding-tax-free distribution from the approved capital contribution (agio) reserve and CHF 95.– from available retained earnings), and of CHF 65.- for participation certificates (CHF 55.50 from a withholding-tax-free distribution from the premium reserve and CHF 9.50 from available retained earnings). This is equivalent to an increase of 13% compared to the previous year.
BOARD OF DIRECTORS:
The Board of Directors will recommend the election of Ms. Petra Schadeberg-Herrmann as a member of the Board to succeed Dr. Kurt Widmer who will retire from his mandate. As a business management graduate and managing partner of Krombacher Finance GmbH in Kreuztal-Krombach (Germany), Ms. Schadeberg-Herrmann is a proven expert in the consumer goods industry and in the retail business. She is also a member of the Supervisory Board of Krones AG, Neutraubling (world leader in the manufacture of beverage and liquid food packaging and bottling machinery) and of Commerzbank AG, Frankfurt. Her long-standing experience and profound knowledge will make a valuable contribution to the work of the Board of Directors.
Joint venture with Brazilian chocolate retail specialist CRM Group
As part of its ongoing expansion into new and emerging markets, Lindt & Sprüngli is establishing the subsidiary Lindt & Sprüngli (Brazil) Holding Ltd. in Brazil. This subsidiary will enter into a joint venture with the Brazilian chocolate retail specialist CRM Group under the name Lindt & Sprüngli (Brazil) SA. As a well-known Brazilian chocolate and retail specialist, the CRM Group with its brand “Kopenhagen” and an extensive net of retail shops is leading in the Brazilian Premium chocolate market. With 51%, Lindt & Sprüngli will hold the majority in this newly founded joint venture company. Thanks to the partnership with CRM Group, the development of the Brazilian market is accelerated especially with the targeted establishment of the own retail business with LINDT Chocolate Boutiques in prime locations. This is to be understood as a clear sign that Lindt & Sprüngli puts a strong focus on the fifth biggest chocolate market of the world. Lindt & Sprüngli will continue to invest in the brand as well as in the distribution of its products, to foster growth in this dynamic market and to sustainably support the awareness of LINDT as a Swiss premium chocolate brand rich in tradition.
The 2013 annual report will be available online from 11 March 2014 (07.00 A.M.) at http://www.lindt.com/ch/swf/eng/investors/