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The half-year figures were boosted by increasing demand for premium chocolate. Lindor and Excellence continued to be major growth contributors. Photo by ©Lindt |
SWITZERLAND. Lindt & Sprungli turned in a strong performance in the duty free channel for the first six months of 2005 amid a fine group-wide performance.
“The duty free business performed very well,” said the company, “as did all European and overseas export markets.”
Despite rising prices for hazelnuts and other key raw materials such as cocoa butter the Swiss company reported a profit for the first time in its traditionally weak first half (it makes less than 40% of annual sales during the first half of each year but attracts a 50% allocation of fixed costs).
It said that sales had defied sluggish conditions in many big European markets to grow by +8.9% to CHF847.2 million (US$666 million), or by +10.4% in local currencies.
Net profits reached CHF4.7 million compared with a CHF1.7 million loss in the same period last year. The group predicted rising operating and net earnings for the full year.
“These results are excellent, as the market has come to expect,” James Amoroso of Helvea, the Swiss brokerage, told the Financial Times.
The half-year figures were boosted by increasing demand for premium chocolate. Lindor and Excellence continued to be major growth contributors. The group performed strongly in the key seasonal business, where it said “the premium brand name and the attractiveness of the products are much more significant factors in the purchase decision”.
The duty free performance was particularly noteworthy given tough domestic market conditions. The group commented: “The sluggish economy in Europe (particularly in Italy, Germany and France) made for little improvement in consumer sentiment. In most European countries, including Switzerland, retail sales were at best stable, if not slightly in decline, while the consumer mood in the United States, Canada and Australia largely remains positive.
“Under these prevailing conditions the European chocolate markets overall recorded only low growth; in some countries growth was actually negative.”
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