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Summary
- Lindt & Spruengli AG (SWX: LISN) released its sales report for the last year, disclosing a 6.1 per cent drop to CHF 4.02 billion in the organic sales.
- The online business of the Zurich-based company doubled, accounting for 5 per cent of the total sales.
Lindt & Spruengli AG (SWX: LISN) released its sales report on Monday and stated that it was successful in achieving a solid result in for January – December 2020 period despite the challenges and threats to the business due to the pandemic.
The company disclosed gains in the market share across all the countries it operates. In a statement released on Tuesday, the Swiss chocolatier company said that the foundation for further market share gains has been laid by undertaking strategies such as product innovations and focus on consumers, and others.
(Image source: ©Kalkine Group 2021)
There was a 6.1 per cent drop to CHF 4.02 billion (-10.9 per cent in Swiss francs) in the organic sales as compared to the previous year. The decline in the organic sales was in line with company’s expectation, a 5-7 per cent fall as disclosed in the half-year report. The company had reported an 8.1 per cent drop in organic sales during H1 2020.
The online business of the Zurich-based company doubled, accounting for 5 per cent of the total sales as Lindt & Sprüngli responded to the changing shopping behaviour by taking up several entrepreneurial initiatives, like the expansion of the e-commerce business, home deliveries, and pick-up services.
Lindor and Excellence, which is considered as the main product lines of the company,
contributed to the positive development in retail trade in particular. A double-digit increase was recorded by the Excellence chocolate bar range.
Global restrictions imposed due to the spread of the coronavirus infection, store closures and reduced consumer traffic caused roadblocks for the company’s store network. The company reported a 6.8 per cent decrease in the sales on year-on-year basis mainly due to the restrictions that were imposed on the food service segment in North America.
Though Europe, Lindt's biggest operation region, recorded a decline in organic sales of 2.9 per cent for the period, it was offset by growth in sales in key markets like Germany, the UK, Spain, the Netherlands, Scandinavia region and Eastern Europe as compared to 2019.
However, the company remains optimistic of its outlook for the coming year and has said that it will achieve its target of an operating profit margin (EBIT) of around 10 per cent. In addition, the premium chocolate manufacturer said that it is convinced that it will emerge even stronger this year.
Lindt & Sprüngli revealed that it was expecting a 5-7 per cent organic sales growth per annum in the medium to long term. It also expects the operating profit margin to return to a level of around 15 per cent in 2022 assuming a significant improvement.
