Lindt looks to emerging markets for further growth
Select language to see a machine translation of this article. The original language of the Article is English and the translation is provided for your convenience.

Lindt looks to emerging markets for further growth

Lindt & Sprüngli (Lindt), the iconic Swiss chocolatier, reported earnings this week. The company’s figures were, speaking broadly, “solid” according to Dominion Investment Manager Christian Cole – although a weak North American market stood out as a drag on performance.

Lindt’s share price has edged up slightly throughout the week

graph 0803 lindt

SOURCE: Yahoo Finance

Lindt is the world-leader in luxury chocolate, and it saw “an above average result” in Japan, China, South Africa, Brazil, and Russia in 2017. The company has vowed to increase its focus on these regions, where is said it has “enormous potential” to outperform. Lindt thinks that its success in these coutnries is largely down to quality. The company released a statement saying: “This positive trend is being fuelled by consumers' growing demand for quality, greater purchasing power and also a growing desire for chocolate with a high cocoa content."

Lindt was more modestly successful in other parts of the world too, seeing its global net profits rise by 7.8% from 2016. These profits were driven by record sales of more than 4 billion Swiss francs. More good news came from the production line: Lindt’s raw materials (cocoa beans, cocoa butter, and sugar) all saw better harvests in 2016/17, meaning that the cost of creating all those gold foil wrapped bunnies has dropped.

The one weak area for Lindt is North America, where sales of its Russell Stovier brand declined. This black spot on an otherwise positive set of figures is responsible for muted guidance: the company expects “6% to 8% long term growth” but is pegging expectations lower (5%) for 2018.


Dominion holds Lindt in its Global Trends Luxury Fund.

If you would you like to receive the Newsfeeds daily, please click here to sign up now!

Help us make this Newsfeed better by rating this article. 1 star = Poor and 5 stars = Excellent
0.0/5 rating (0 votes)

The views expressed in this article are those of the author at the date of publication and not necessarily those of Dominion Fund Management Limited. The content of this article is not intended as investment advice and will not be updated after publication. Images, video, quotations from literature and any such material which may be subject to copyright is reproduced in whole or in part in this article on the basis of Fair use as applied to news reporting and journalistic comment on events.