Wif he travels often and has to do this by plane, he will certainly have been to one of the many Lindt shops at airports at one time or another. Especially during the big chocolate festivals of Christmas and Easter, it’s fun to stop by the Lindt & Sprüngli branches.
This was not possible during the pandemic. But the gradual lifting of the corona restrictions last year made everyday life more worth living in many areas. The so-called “Chocolate Advisors” in the Lindt shops were once again able to personally greet customers. This effect was particularly noticeable at the airports, since travel also returned to normal and the number of passengers rose again, as did the sales of the Swiss chocolate manufacturer in the duty-free channel. At the same time, relaxation in the supply chains could be observed.
Strong financial year 2022
This gave Lindt & Sprüngli a significant increase in sales and profitability in the 2022 financial year. With sales of 4.97 billion francs, Lindt & Sprüngli just barely scratched the 5 billion franc mark. Compared to the previous year, an organic increase of 10.8 percent was recorded. Currency effects – in particular the weakening of the euro and the pound sterling – meant that growth in Swiss francs was 8.4 percent.
Lindt & Sprüngli continued to generate its main business in Europe, followed by North America. However, Lindt products are also becoming increasingly popular in the rest of the world. Here, organic sales growth was particularly high at 16.6 percent. Double-digit growth rates were recorded in Brazil, Japan and China in particular, while Australia remained the top-selling market in this segment. The Group boosted sales with the help of new products, higher advertising spending and the continuous expansion of online and offline sales channels, among other things. The most important product line remained the international bestseller “Lindor”.
The cult rabbit does its part
Now we are just before Easter and it is “his” time: that of the chocolate bunny. The cult bunny made of “smoothly melting whole milk chocolate”, wrapped in golden foil and provided with the characteristic red ribbon with little bells, is already celebrating its 71st birthday this year.
FAZ.NET columnist Christoph Scherbaum is a stock exchange specialist and works as a financial journalist from Ludwigsburg.
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Image: Christoph Scherbaum
And it should also bring the company torrential chocolate sales at Easter 2023. It is one of the company’s best-known and most important products. The balance sheets of the past decades show that Lindt & Sprüngli earns well with its bestsellers – the publication of figures for the year 2022 also proves it. Operating profit (EBIT) improved by 15.5 percent year-on-year to CHF 744.6 million, which corresponds to a margin of 15.0 percent after 14.1 percent in the previous year. Net profit increased by 16.1 percent to CHF 569.7 million.
For the current fiscal year 2023 and beyond, management remains optimistic and confirmed the medium- to long-term objective of organic sales growth of 6 to 8 percent per year and a continuous, annual operating margin improvement of 20 to 40 basis points. At the same time, they want to grow faster than the market and thus gain market share. Although Lindt is not immune to challenges such as higher raw material costs, the popularity of the products makes it easier to push through price increases.
Solid dividend payer with a long history
Against this background, Lindt & Sprüngli should remain attractive for its shareholders and be able to continue its series of 27 dividend increases in a row. In the case of registered shares, 1,300 francs are paid out per share, after 1,200 francs in the previous year. For the participation certificates, the distribution increases from 120 to 130 francs.
The dividends seem high – but not when compared to the share prices. The Lindt registered share is one of the few papers worldwide that can boast six-digit quotations. The participation certificates are significantly “cheaper”. These are currently available for around 10,800 francs.
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For detailed view
In the long term, the course development of the Swiss is convincing. Although there have been sharp corrections and sideways movement from time to time, the participation certificates have recorded an average price gain of more than 13 percent annually over a ten-year period.
Investment alternative for the small investor
But there is a small catch for German small investors: Not only the currently expensive price of almost 11,000 francs should deter many from investing. The disputes between the EU and Switzerland also make it almost impossible for private investors to invest directly in Swiss stocks. An alternative could therefore be an exchange-traded index fund that includes shares in Lindt & Sprüngli.
Since Lindt & Sprüngli is not listed in the Swiss share index SMI, it is advisable to look at a suitable industry index. The sector ETFs in which Lindt & Sprüngli is represented include the Lyxor Stoxx Europe 600 Food & Beverage UCITS ETF (Dist) (WKN: LYX04H / ISIN: LU2082997359). It doesn’t matter how you personally feel about chocolate: Lindt & Sprüngli is and remains the first choice when it comes to long-term investments in chocolate.