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Record-high cocoa prices forced many chocolate
makers to raise prices last year, but Lindt has fared better
than rivals thanks to its expansion in North America and its
focus on the coveted premium segment that companies like Nestle
also want to enter.
With underlying full-year sales up 10 percent, far ahead of low
single-digit growth in the overall chocolate confectionery
market, Lindt also confirmed its operating profit margin target
for 2014. Full results are due on March 10.
"I'm confident sales will continue to grow 6 to 8 percent in the
future. Russell Stover should also be able to generate similar
growth rates, but we first have to fully integrate them," Chief
Executive and Chairman Ernst Tanner told Reuters in a telephone
interview on Tuesday.
Lindt paid around $1.3-1.5 billion for Russell Stover last year,
Tanner said, securing third place in the United States, the
world's biggest chocolate market.
Including the Russell Stover brand, consolidated from
mid-September, the company's sales rose 17.4 percent to 3.39
billion Swiss francs ($3.34 billion), ahead of market estimates.
Excluding the acquired activities, Lindt's operating margin
should rise by 20 to 40 basis points in 2014, in line with the
company's mid-term targets.
The maker of Lindor chocolate balls and gold foil-wrapped Easter
bunnies said it made "impressive progress" in France and Germany
last year and reported double-digit sales growth in the United
Kingdom, taking sales growth in Europe to 6.5 percent.
Stand-alone sales in North America were up 14.3 percent.
Tanner said he expected cocoa bean prices to ease further as a
good outlook for crops and only a moderate increase in demand
did not justify higher prices. Cocoa prices hit record highs
last autumn, but have tumbled since.
Lindt shares, which already gained 23 percent last year and
trade at a premium to peers, rose 5 percent by 1045 GMT.
"All elements for our Buy case on the green light," Vontobel
analyst Jean-Philippe Bertschy said.
However, Kepler Cheuvreux's Jon Cox kept his "reduce" rating on
valuation concerns.
(This story has been corrected to change to excluding from
including in paragraph 7)
(Editing by Richard Pullin and Keith Weir)
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