Swiss premium chocolate maker, Lindt & Sprüngli, saw net profit climb by more than 20 per cent in 2003, buoyed by new product launches.
Net income of SFr122.4 million ($96.5 million) outstripped analysts’ forecasts as the firm posted record sales.
New products, including Lindt’s successful global launch of the Gold Bunny, helped outweigh a drop in tourism, which reduced sales of luxury goods worldwide, the company said.
Lindt, based in Kilchberg near Zurich, said on Tuesday that sales of its brands such as Truffles and Lindor rose by 7.1 per cent to a record SFr1.8 billion last year.
“Measured against the overall development of the chocolate market, this represents a substantially above-average growth, and is all the more pleasing because it was achieved in a particularly challenging environment,” said the company in a statement.
Chief executive and chairman Ernst Tanner explained to swissinfo the recipe behind the group's continuing financial success.
"The main reason for achieving these record results is the consistency of translating our strategy into the marketplace," he said.
"We concentrate on the premium chocolate market. We do nothing else but chocolate, and there we offer the consumer the best quality we know."
"We understand the consumer better than anybody else and can respond to changes in consumer demand," he added.
Operating earnings before interest and taxes increased by 10.5 per cent to SFr188.7 million. The figure was in line with expectations of SFr189 million.
Lindt said it would increase its 2003 dividend to SFr140 per registered share – an increase of SFr30 on the previous year.
Lindt said the continuing improvements year on year in both sales and earnings testified to the increasing popularity of its products.
This was achieved despite the downturn in tourism linked to the war in Iraq and the deadly Sars pneumonia virus.
Net debt fell by a further SFr81 million to SFr59.2 million – it has fallen by 75 per cent over the past two years.
Tanner commented that in virtually all the group’s important markets, Lindt & Sprüngli was continuing to grow significantly faster than the average of the overall chocolate market.
Lindt was, as a result, constantly expanding its market share and securing a foundation for future prosperity for the brand and the whole business, he said.
He commented that the trend of people turning increasingly to premium chocolate was set to continue over the long term.
“People are discovering a major difference between mass and quality products,” he told swissinfo.
“Furthermore, people are more aware of fitness, health and other issues and therefore they turn away from mass products to high quality products."
"It’s a trend from which we benefit the most and a trend which we encourage with our quality products, with new products and innovation,” he added.
As for the future, Tanner said that the aim was to strengthen the group’s positions “significantly” and to continue to establish new subsidiaries in countries with the right potential.
“We are working on the assumption that we will be able to prepare one market each year for the incorporation of a new Lindt & Sprüngli subsidiary,” he said.
The year 2004 is off to a good start, with Easter business looking “very promising”.
“The first three months have started very strongly and I am convinced that we will achieve at least our long-term strategic goal of growth between five and seven per cent in sales and between eight and ten per cent in profitability," commented Tanner.
swissinfo, Robert Brookes in Kilchberg
Net debt fell last year from SFr140 million to SFr59.2 million.
The board is proposing a dividend of SFr140 per registered share, up by 27.3 per cent from the previous year (SFr110).
The 2003 dividend per participation certificate is set to be SFr14 - up from SFr11 in 2002.
Shareholders' equity was up to SFr728.7 million.
Lindt employs more than 6,000 people worldwide.
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