Swiss chocolate maker Lindt & Sprüngli expects to grow sales by 6-8% this year, mostly due to price increases, and will continue its small operation in Russia.
"We have eight stores and about 125 employees in Russia. We keep operating and supplying as far as that is possible just like other food companies," chief executive Dieter Weisskopf said on Tuesday at the company's headquarters in Kilchberg on Lake Zurich.
Asked whether Lindt's chocolate bars and Lindor chocolate balls were a luxury product rather than an essential food item, Weisskopf said, "We're not supplying arms or petrol, bear that in mind. But we're monitoring the situation closely."
Russia and Ukraine accounted for less than 1% of group sales, he said, and he did not expect a big impact on business from Russia's invasion of its neighbour.
Advertising And Innovation
The company, which managed to gain market share last year thanks to continued investment in advertising and innovation, raised it mid-term sales growth outlook to 6-8%, from 5-7% previously, and said growth should come in at the upper end of that range this year.
The company, whose gold foil-wrapped chocolate Easter bunnies are now on supermarket shelves, is also confident about its margin despite higher packaging and energy costs.
Chief financial officer Martin Hug said the company would raise prices by 2-3% this year in the current inflationary environment and was only expecting to see a slight overall increase in costs given the price of its main raw material, cocoa, was broadly stable.
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Net profit rose 53% to CHF490.5 million ($530 million), ahead of an estimate of CHF474.8 million in a Refinitiv poll, Lindt said. It proposed a 9% higher dividend of 1,200 francs per share, slightly below the poll estimate.
It grew its operating margin to 14.1% last year and wants to improve it further to 15% in 2022.
Lindt already released 2021 organic sales growth of 13.3% in January.
Supply chain bottlenecks at production sites of its Russell Stover brand in North America were being addressed and the brand's sales were expected to return to growth this year.
The operating margin in North America should improve this year to 9-10%, from 7.7% last year, Hug said.
Lindt's shares, called participation certificates, were 0.4% higher at 11:00 GMT, versus a 1.2% lower European food sector.
News by Reuters, edited by ESM – your source for the latest A-Brands news. Click subscribe to sign up to ESM: European Supermarket Magazine.
