Lindt sales rise, sees profit boost from lower tax rate (updated)

Chocoladefabriken Lindt & Spruengli AG

17/01/2017 07:20

(Adds quotes and background, share indication) 
    ZURICH, Jan 17 (Reuters) - Swiss chocolate maker Lindt & 
Spruengli  LISP.S  boosted its share of a stagnating market in 
2016 thanks to solid showings in Europe, Japan and Brazil, it 
said on Tuesday. 
    Overall sales grew 6.8 percent to 3.90 billion Swiss francs  
($3.87 billion), in line with the average estimate of 3.89 
billion francs in a Reuters poll of eight analysts.  urn:newsml:reuters.com:*:nL5N1F34DE 
    Organic sales - stripping out currency moves - grew 6.0 
percent, within its target range of 6 to 8 percent. The rate of 
organic sales growth increased from 4.4 percent in the first 
half to 7.0 percent in the second as customers snapped up 
Christmas season promotions. 
    "The group's operating margin is expected to increase within 
the strategic target range. There will be a disproportionate 
increase in net profit due to a lower tax rate," it said. 
    The group has said it aims to grow the margin on earnings 
before interest and taxes by 20 to 40 basis points. Full 
financial results for 2016 are due on March 7. 
    Its shares were indicated 2.5 percent higher in pre-market 
business. 
    Chocolate makers are grappling with stagnant markets and 
subdued consumer confidence, but Lindt managed to grow sales 
thanks to premium products such as Lindor chocolate balls and 
gold foil-wrapped Christmas chocolate bears. 
    But adjusting U.S. brand Russell Stover's product line and 
promotions strategy weighed on sales growth, it said. 
    Sales in Lindt's biggest region, Europe, were up 7.4 percent 
in local currencies, thanks to Germany, France and Britain. 
Growth in North America was 3.4 percent even as the overall 
chocolate market contracted for the first time in years. 
    Lindt is also building up its network of chocolate shops as 
it tries to become the world's leading premium chocolate 
retailer. Its global retail business posted double-digit sales 
growth as it added about 60 new shops and chocolate cafes, 
mainly in Europe, Canada, Brazil and Japan. 
 
 (Reporting by Michael Shields; Editing by John Revill and Mark 
Potter) 
 ((Michael.Shields@thomsonreuters.com; +41 58 306 7461; Reuters 
Messaging: michael.shields.thomsonreuters.com@reuters.net)) 
 
Keywords: LINDT & SPRUENGL RESULTS/