Lindt & Sprüngli with double-digit sales growth and market share gains
Chocoladefabriken Lindt & Sprüngli AG / Key word(s): Half Year Results
Press Release Half-Year 2021 | Ad Hoc announcement pursuant to article 53 LR | July 27, 2021
Kilchberg, July 27, 2021 - After a challenging previous financial year, Lindt & Sprüngli is reporting again positive results. In the first half of 2021, the chocolate manufacturer responded with speed, innovative strength, and flexibility to the unchanged demanding environment during the Covid-19 pandemic. Thanks to the great commitment of the employees, continuously high advertising investments in 2020 and 2021, new product launches, and continued customer focus, Lindt & Sprüngli was able to report a positive organic sales increase of +17.4% to CHF 1.8 billion (previous year: CHF 1.5 billion) in the first six months of the financial year 2021. Due to the renewed appreciation of the Swiss franc against the major currencies, growth in Swiss franc amounts to +17.2%.
Since the beginning of the year, the global chocolate markets have recorded growth compared to the weak previous year. Furthermore, Lindt & Sprüngli benefited from an above-average development of the premium segment in which the company holds a global leading position in. However, the worldwide measures to fight against the pandemic continued to adversely affect business performance in various markets and business segments in the first half of the year. At Lindt & Sprüngli, this primarily impacted the business segments of the own shop network Global Retail as well as Duty Free. Global Retail recovered with double-digit growth compared to a very weak previous year. However, due to the ongoing temporary local lockdowns and thus lower consumer frequency, sales were lower compared to 2019. The Duty Free business was still unable to match the results of the pre-pandemic years due to the ongoing restrictions in global air travel.
Lindt & Sprüngli was able to meet the increased global demand for high-quality chocolate products with the key franchises Lindor and Excellence. Both product lines were again main sales drivers in the first half of the year and recorded solid growth. It is also particularly pleasing that the important Easter business recovered significantly and even exceeded expectations. In addition, the online business doubled its sales. The reasons for this are the unbroken trend in consumer shopping behavior from brick-to-mortar to online retail and the strategic focus on further developing the omni-channel approach. This comprises and coordinates sales activities via own e-shops, the online channels of the retail partners, and the own shop network. Lindt & Sprüngli is thus well positioned and was able to further expand its market share in the online business in the first half of 2021. Despite the still difficult market environment, the company gained market shares in all strategically important markets and recorded double-digit sales growth in all three regions: 'Europe', 'North America', and 'Rest of World'.
Double-digit sales growth in all three regions
The 'North America' region achieved a very good organic sales development of +18.8% to CHF 620.9 million (previous year: CHF 551.5 million). Once again, market shares were gained in the USA, the world's largest chocolate market, in the first half of the year. All three brands, Lindt, Ghirardelli, and Russell Stover, thus strengthened Lindt & Sprüngli's leading position in the premium chocolate segment and as no. 3 in the overall market. In particular, Lindt in the US, made a significant double-digit contribution to sales growth in the region, benefiting from high demand for the permanent product range in the retail trade and from good sales in the important seasonal business. Ghirardelli performed again positively across all sales channels and the food service business also recovered. In addition, the growth trend in the booming baking segment continued. The Russell Stover subsidiary benefited from good demand for its sugar-free product line and stabilization in the important seasonal Valentine's Day and Easter business.
The 'Rest of the World' segment increased sales organically by +18.0% to CHF 237.0 million (previous year: CHF 197.8 million), with the Japanese, Russian, and Chinese markets performing particularly well. The strong growth of the online business of the previous year continued in the first half of 2021, especially in China. In Brazil, Lindt & Sprüngli was able to take over the shares of the joint venture partner in the local retail business at the beginning of the year and will continue to expand the shop network according to an unchanged plan. The Duty Free segment is still significantly below the sales level of 2019.
The regulatory measures to protect the population since the beginning of 2020 have had a major impact on global supply chains and the economy in particular. During this period, Lindt & Sprüngli has succeeded in securing supplies to production sites as well as to trade partners at all times. Thanks to a forward-looking purchasing strategy, costs for cocoa products were kept stable despite continued high price volatility in the first half of the year. In contrast, prices for the raw materials sugar and milk powder as well as for packaging materials recorded demand-related price increases.
Sustainability: new goals in the areas of packaging and environment
Having achieved the targets set five years ago for the reduction of greenhouse gases in production, the company is making new commitments. Lindt & Sprüngli is setting itself new, clearly measurable, and ambitious climate targets based on the 'science-based targets' approach. In addition to the short-term reduction targets for a zero-emission production, Lindt & Sprüngli is defining 'net-zero emission' of its comprehensive activities in the medium-term. Detailed information on the sustainability strategy and new commitments can be found in the Sustainability Report 2020 at: https://www.lindt-spruengli.com/sustainability/reports
Link to Semi-Annual Report 2021
Next publication: Full-year results 2021, on Tuesday, March 8, 2022, 7.00 a.m.
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