Lindt & Sprüngli beat expectations in 2016
Swiss chocolatier Lindt & Sprungli posted great full year results for 2016, exceeding analysts’ expectations and painting a positive picture of the brand’s strength in Europe. The luxury confectioner reported a 6.8% increase in annual sales to CHF 3.9 billion. That represents a full 6% organic growth throughout the year! Even better – all its geographic regions looked strong!
The market responded positively to Lindt’s full year results!
SOURCE: Yahoo Finance
The stand out performer for Lindt in 2016 was Europe, which saw an incredibly positive organic growth of 7.4%. The company referred to this as “gratifying”, and declared that it was the fastest growing chocolate brand in Britain over the year.
According to Jean-Philippe Bertschy, an analyst at Bank Vontobel, Lindt’s performance in Europe was “a stunning result, considering the deflationary environment, tough trade conditions (hard discounters), as well as relative high market shares.” Bertschy added that it was Germany, France and the UK that pushed Lindt’s growth up in the region.
If Europe was the star this year, America was the laggard. Growth in the region slowed to (a still positive) 3.4%. This is hardly the end of the world, but it is lower than Bertschy predicted (4% organic growth). The offending unit here was the company’s Russell Stover unit, which recorded negative performance. Without that draw down, Lindt would have returned about 6.4%.
According to Lindt, the company added 60 new stores over the year, including new outlets in Brazil and Japan, which contributed an impressive 10.3% to its Rest of the World segment for 2016.
Dominion holds Lindt & Sprüngli in its Global Trends Luxury Fund.
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