Lindt & Spruengli aims for 6-8% sales growth, announces share buyback

By Silke Koltrowitz

ZURICH (Reuters) – Swiss chocolate maker Lindt & Spruengli said on Tuesday it aimed for 6-8% organic sales growth this year thanks to pent-up demand after the pandemic hit its business and made net profit slide last year.

Chocolate makers are grappling with subdued demand as consumers buy fewer chocolates as gifts or while traveling during the COVID-19 pandemic, and Lindt has also been hit by the temporary closure of its own stores.

Net profit fell 37.5% to 320.1 million Swiss francs ($349.53 million) in 2020, the maker of Lindor chocolate balls and gold foil-wrapped Easter bunnies said in a statement.

But the company said it was convinced that the chocolate market, and in particular the premium segment it operates in, would continue to grow in the future.

It said it expected organic sales to grow 6-8% this year and then, from 2022 onwards, 5-7% per year in line with its medium term guidance.

The Zurich-based company also announced a new share buyback programme of 750 million francs from June this year to the end of next year and will pay out a dividend of 1,100 francs per registered share and of 110 francs per participation certificate.

It had paid out an exceptionally high dividend for its anniversary last year.

“Overall, a solid print with cash flow and the announcement of a buyback the main positive surprises,” Kepler Cheuvreux analyst Jon Cox said, adding the outlook was also upbeat, but more or less in line with street expectations.

Lindt & Spruengli had already flagged a 6.1% drop in 2020 organic sales in January. The contraction in sales led its operating profit margin to fall to 10.5%, from 13.2% in 2019.

It said the margin should return to 13-14% this year and then to 15% in 2022.

($1 = 0.9158 Swiss francs)

(Reporting by Silke Koltrowitz; Editing by Riham Alkousaa and Brenna Hughes Neghaiwi)