Price increases compensated for higher cocoa prices
Chocolate manufacturer Lindt & Sprüngli recently reported robust sales and profit growth in the first half of 2024.
Accordingly, the Group's turnover increased organically by 7 percent to 2.16 billion Swiss francs in the first half of this year. According to the company, price increases in the mid-single-digit range to compensate for higher cocoa prices as well as volume/mix growth of 0.9 percent contributed to the increase in turnover.
Higher EBIT margin
Operating profit in the form of EBIT increased to CHF 292.3 million in the reporting period. Lindt & Sprüngli thus achieved an EBIT margin of 13.5% in the first half of 2024. In the prior-year period, the EBIT margin was 12.2 percent.
The company writes that the improvement is mainly due to efficiency and price increases to compensate for higher raw material costs for cocoa. The chocolate manufacturer reported a net profit of 218.0 million Swiss francs for the first half of 2024. The equity ratio of the long-established company was 54.6 percent on June 30, 2024.
Cost management
As Lindt & Sprüngli emphasizes, the cocoa price at record highs continues to pose a challenge.
The effects of rising cocoa costs are to be partially offset by strict cost management. Nevertheless, the company believes that further price increases are necessary.
Outlook
According to its press release, the Group is optimistic about achieving its targets for the 2024 financial year, with organic sales growth of 6 to 8% expected to be achieved this year. Lindt & Sprüngli also anticipates an increase in the EBIT margin of 20 to 40 basis points.