Swiss chocolate maker opts to continue operations in Russia as sales grow
08 March 2022 - 17:37
bySilke Koltrowitz
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Zurich — Swiss chocolate maker Lindt & Spruengli expects to grow sales 6%-8% in 2022, mostly due to price increases, and will continue its small operation in Russia.
“We have eight stores and about 125 employees in Russia. We keep operating and supplying as far as that is possible just like other food companies,” CEO Dieter Weisskopf said on Tuesday at the company’s headquarters in Kilchberg on Lake Zurich.
Asked whether Lindt’s chocolate bars and Lindor chocolate balls were a luxury product rather than an essential food item, Weisskopf said: “We’re not supplying arms or petrol, bear that in mind. But we’re monitoring the situation closely.”
Russia and Ukraine accounted for less than 1% of group sales, he said, and he did not expect a big effect on business from Russia’s invasion of its neighbour.
The company, which managed to gain market share in 2021 thanks to continued investment in advertising and innovation, raised its midterm sales growth outlook to 6%-8% from 5%-7% previously, and said growth should come in at the upper end of that range in 2022.
The company, whose gold foil-wrapped chocolate Easter bunnies are now on supermarket shelves, is also confident about its margin despite higher packaging and energy costs.
CFO Martin Hug said the company will raise prices 2%-3% this year in the current inflationary environment and only expects to see a slight overall increase in costs since the price of its main raw material, cocoa, is broadly stable.
Net profit rose 53% to Sf490.5m ($530m), ahead of an estimate of Sf474.8m in a Refinitiv poll, Lindt said. It proposed a 9% higher dividend of Sf1,200 per share, slightly below the poll estimate.
It grew its operating margin to 14.1% last year and wants to improve it further to 15% in 2022.
Lindt already released 2021 organic sales growth of 13.3% in January.
Supply chain bottlenecks at production sites of its Russell Stover brand in North America are being dealt with and the brand’s sales are expected to return to growth this year. The operating margin in North America should improve to 9%-10% from 7.7% last year, Hug said.
Lindt’s shares, called participation certificates, were 0.4% higher in midmorning trading versus a 1.2% lower European food sector.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Lindt’s Easter bunnies on the march to Moscow
Swiss chocolate maker opts to continue operations in Russia as sales grow
Zurich — Swiss chocolate maker Lindt & Spruengli expects to grow sales 6%-8% in 2022, mostly due to price increases, and will continue its small operation in Russia.
“We have eight stores and about 125 employees in Russia. We keep operating and supplying as far as that is possible just like other food companies,” CEO Dieter Weisskopf said on Tuesday at the company’s headquarters in Kilchberg on Lake Zurich.
Asked whether Lindt’s chocolate bars and Lindor chocolate balls were a luxury product rather than an essential food item, Weisskopf said: “We’re not supplying arms or petrol, bear that in mind. But we’re monitoring the situation closely.”
Russia and Ukraine accounted for less than 1% of group sales, he said, and he did not expect a big effect on business from Russia’s invasion of its neighbour.
The company, which managed to gain market share in 2021 thanks to continued investment in advertising and innovation, raised its midterm sales growth outlook to 6%-8% from 5%-7% previously, and said growth should come in at the upper end of that range in 2022.
The company, whose gold foil-wrapped chocolate Easter bunnies are now on supermarket shelves, is also confident about its margin despite higher packaging and energy costs.
CFO Martin Hug said the company will raise prices 2%-3% this year in the current inflationary environment and only expects to see a slight overall increase in costs since the price of its main raw material, cocoa, is broadly stable.
Net profit rose 53% to Sf490.5m ($530m), ahead of an estimate of Sf474.8m in a Refinitiv poll, Lindt said. It proposed a 9% higher dividend of Sf1,200 per share, slightly below the poll estimate.
It grew its operating margin to 14.1% last year and wants to improve it further to 15% in 2022.
Lindt already released 2021 organic sales growth of 13.3% in January.
Supply chain bottlenecks at production sites of its Russell Stover brand in North America are being dealt with and the brand’s sales are expected to return to growth this year. The operating margin in North America should improve to 9%-10% from 7.7% last year, Hug said.
Lindt’s shares, called participation certificates, were 0.4% higher in midmorning trading versus a 1.2% lower European food sector.
Reuters
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