It looks like Lindt’s and Sprüngli’s decision to buy Russell Stover Candies back in September 2014 is working out for the chocolate maker.
That and it’s expanding brick-and-mortar store network, as well as the worldwide success of the Lindt brand has helped the company reach CHF (Swiss francs) 3.39 billion in sales — about 17.4 percent more than last year.
The company recently discussed the past year as part of it’s annual sales report. Lindt says the highlights of an eventful 2014 include:
- The announcement of a joint venture in the retail sector in Brazil
- The opening of the “Swiss Chocolate Adventure” theme world at the Swiss Museum of Transport in Lucerne by the LINDT Chocolate Competence Foundation
- The opening of the highest-situated chocolate shop on the Jungfraujoch glacier pass (3,454 meters)
- The acquisition of Russell Stover Candies in the United States.
Lindt was able to accomplish all of that despite what it calls, “a persistently sluggish European economic climate, coupled with slightly improved consumer behavior in North America.” The chocolate maker also faced, “rising rates for relevant raw materials and tough price competition.”
However, the company credits its uncompromising commitment to premium quality, efficient cost management, and numerous product innovations, enhancing its ability to grow much more quickly than the overall chocolate markets.
In fact, excluding the effects of the acquisition, Lindt’s organic growth in local currencies reached 9.8 percent, by far exceeding the strategic growth target of 6-8 percent.
Lindt sees worldwide growth
In the European market, Lindt had seen organic growth in local currencies of +6.5 percent, a positive performance that all the countries played a part in.
France and Germany, the major markets in the region, reported particularly impressive progress. And, in the UK, a wide variety of innovations in both the seasonal and permanent sectors and the ever increasing popularity of the Lindt brand with consumers, helped the company achieve double-digit growth in the country.
As for North America, Lindt saw 14.3 percent growth in the NAFTA region, excluding the sales of Russell Stover Candies.
All three US subsidiaries achieved double-digit sales growth thanks to the launch of numerous new products and the increasing interest of retailers and consumers in quality products from Lindt & Sprüngli.
The rest of the world segment grew by 13.9 percent. The company credits the growth to success in Australia, duty-free business and its worldwide distributor. Lindt also opened new subsidiaries in Japan, Russia, and China over the past few years, which also helped the company achieve high growth rates at lower absolute levels.
As part of its ongoing expansion into new markets, the “LINDT Global Retail” Division is playing an increasingly important role.
Last year, Lindt added 29 nine stores worldwide. Moreover, the sales generated by the Lindt & Sprüngli shop-network accounted for about 10 percent of overall Group sales, making a significant contribution to sustainably strengthening and further consolidating the Lindt brand image and recognition.
As for the future, it looks bright for Lindt.
Excluding the acquisition of Russell Stover Candies, the Lindt & Sprüngli Group expects to improve the EBIT margin in 2014 against the previous year within the range of the medium-term target of 20 to 40 basis points. Including Russell Stover Candies and the one-off transaction costs, the EBIT margin is expected to be about the same as the previous year.