For the first time in its history of almost 175 years, Lindt & Sprüngli achieved sales worth CHF 4 billion Swiss francs. Besides gaining significant shares in almost all markets, Lindt & Sprüngli once again grew faster than the overall chocolate market. Given the challenging conditions, such as largely saturated chocolate markets, a changing retail landscape and growing pressure on prices, this represents a good performance. The results achieved in Europe and the Rest of the World segment are particularly worth mentioning, as is the development of the Group’s own retail network, which continues apace and reached sales worth half a billion for the first time. Despite weaker results in the USA, Lindt & Sprüngli remains on track in the world’s largest chocolate market and during the last financial year set the foundation for further profitable growth.
Group sales in 2017 amounted to CHF 4.088 billion, equivalent to a +4.8% increase in Swiss francs. 2017 saw a degree of fluctuation in terms of currency trends. This resulted in a positive currency translation effect on the consolidated results – mainly due to a stronger euro. The organic sales growth of Lindt & Sprüngli was with +3.7% below the range of the long-term strategic growth target due to the modest growth of the US companies. Excluding Russell Stover, Lindt & Sprüngli achieved +5.9% organic sales growth and underlines that the business remains in a strong position.
Lindt & Sprüngli generated good results in EUROPE, where it achieved organic sales growth of +6.2%. This result is a great achievement, with Lindt & Sprüngli once again delivering above-average growth and gaining market share in already saturated markets. Lindt performed particularly well in the United Kingdom, Germany and Switzerland. France and Italy showed a positive sales growth development and almost all the smaller subsidiaries accomplished double-digit growth.
In the NAFTA region, Lindt & Sprüngli recorded a slight -1.6% organic decline in sales in the challenging US market. A highlight in the region was the outstanding result achieved by Lindt Canada which achieved double-digit growth. The US companies Lindt and Ghirardelli recorded a slight growth in a fast-changing retail environment. This is characterized by the repositioning of the drug store channel, which is an important distribution channel for chocolate and department stores facing less costumer frequency. Russell Stover faced a decline in sales, caused by a weaker market in general, difficulties experienced by individual retail partners and the adjustments of its product portfolio.
These adjustments included a successful re-launch of the sugar-free chocolate line based on stevia extract, while new packaging and additional attractive price points helped deliver good sales during the Christmas period. With the three brands Lindt, Ghirardelli, and Russell Stover, the Group remains #1 in the premium segment and #3 in the US chocolate market as a whole. With the progressing strategic realignment of Russell Stover and the scheduled activities of Lindt and Ghirardelli, Lindt & Sprüngli remains on track in the world’s largest chocolate market and during the last financial year, managed to create the foundation for further profitable growth.
The rest of the world segment is becoming increasingly important and making an ever greater contribution to the development of the Lindt & Sprüngli Group. Business in the countries of this region are reaching faster-than-average organic sales growth of +12.4%. The growth strategies in these markets are based on the local consumer preferences. The expansion strategy in Japan, for example, is mainly driven by the opening of new stores and cafés, whereas the business in China is focused on e-commerce and strengthening distribution partnerships. In Brazil, the emphasis is on collaboration with the joint venture partner for retail. The Duty Free business shows continued success. Lindt & Sprüngli develops special product lines and promotes exceptional collaborations with global retail partners targeting travelers.
Global Retail achieved an important milestone for the first time by recording sales worth half a billion. With double-digit growth achieved once more and over 50 new outlets opening at premium locations all around the world, the Group’s own stores made an important contribution to the overall result. In the last year alone, the more than 410 shops attracted around 60 million visitors worldwide and continued the dynamic successful story of the recent years.
In 2017, the Group’s operating margin is expected to increase within the long-term strategic target range. Moreover, Lindt & Sprüngli confirms its mid- to long-term strategic sales growth target of 6-8% and the improvement of its operating margin by 20-40 basis points.