Lindt Beats Expectations on 2024 Operating Profit

Chocolatier Lindt & Sprüngli has reported a slightly better than expected full-year operating profit for 2024, as it navigates through historically high cocoa prices. The Swiss chocolatier's earnings before interest and taxes (EBIT) were 884 million Swiss francs ($987 million) in 2024, beating analysts' consensus of 880 million francs compiled by LSEG. This strong performance is a testament to Lindt's ability to create value for shareholders despite challenging market conditions.



Lindt's success can be attributed to several key factors:

1. Price Increases and Cost Control: Lindt successfully implemented mid-single-digit price increases in the first half of 2024 to offset higher cocoa prices. This, along with strict cost management, helped the company maintain its profitability despite the challenging market conditions.
2. Volume/Mix Growth: Lindt achieved solid volume/mix growth of +0.9% in the first half of 2024, demonstrating the resilience of its brands in the face of inflationary price effects and stagnant or slightly declining sales volumes in the global chocolate market.
3. Market Share Growth: Lindt & Sprüngli's brands grew market share in all key markets, contributing to the company's overall sales growth.
4. Strong Direct-to-Consumer Business: The Group's direct-to-consumer channels, including retail and online stores, showed strong development with double-digit growth, driven mainly by demand for gifting. This growth was supported by the success of personalized products like the Gold Bunny and the continued growth of key franchises Lindor and Excellence.

These factors are sustainable in the long term as they are part of Lindt's overall strategy to maintain its market leadership in the premium chocolate segment. The company's focus on cost control, brand strength, and direct-to-consumer channels will continue to drive growth and profitability, even in the face of challenges such as fluctuating cocoa prices and market conditions. Additionally, Lindt's commitment to sustainability and innovation will help the company stay competitive and relevant in the long run.

Lindt & Sprüngli's ability to maintain its market leadership in the premium chocolate segment despite challenges such as inflation, cocoa price volatility, and currency fluctuations can be attributed to its ability to create value for shareholders through tight cost control, continuous optimization, investment in capacity expansion, dividend increases, dynamic development in the retail business, growth in all regions, and a successful buyback program. The company's strong performance is also reflected in its dividend, which has been increased for the 28th consecutive year, with a proposal for a distribution of CHF 1,400 per registered share and CHF 140 per participation certificate to the 126th Annual General Meeting on April 18, 2024.

In conclusion, Lindt & Sprüngli's ability to beat analysts' expectations for its 2024 operating profit is a testament to the company's strategic initiatives and commitment to creating value for shareholders. The company's focus on cost control, brand strength, and direct-to-consumer channels, along with its commitment to sustainability and innovation, will continue to drive growth and profitability in the long run.