Lindt chocolate maker says no effect yet from weight-loss drugs on business

Company posted rise in annual profit with higher ingredients costs passed on to customers

Lindt, which makes Lindor balls and gold foil-wrapped Easter bunnies, reported a near 18% rise in net income.

Lindt and Spruengli posted a rise in annual profit as the Swiss chocolate maker managed to pass on higher ingredients costs to customers while maintaining volumes amid a broader slowdown in the global chocolate market.

Cocoa prices have risen to record highs as adverse weather in major growing regions, tree illness and capacity shortages lead to expectations of an ever wider supply deficit this season.

As the surge in prices filters down to retail shelves, the likes of Hershey's and Cadbury maker Modelez have reported lower sales volumes as cash-strapped consumers cut back spending.

Lindt, which makes Lindor balls and gold foil-wrapped Easter bunnies, reported a near 18% rise in net income to 671.4 million Swiss francs (€700m) for 2023, broadly in line with the forecasts of analysts.

It had already reported in January a 10.3% rise in organic sales for the year, as the post-pandemic recovery in travel generated demand for higher-value products such as pralines.

Speaking at a press conference at the company's headquarters just outside Zurich, chief executive Adalbert Lechner highlighted the use of GLP-1 drugs for weight-loss, such as Novo Nordisk's Wegovy, as a new trend the company was seeing in the US and Switzerland. 

However, Mr Lechner said he was yet to see an impact on the business.

"Lindt once again demonstrated its strong pricing power in FY23 thanks to its global premium positioning with high exposure to gifting and pralines," analyst Jean-Philippe Bertschy said in a research note. 

He added despite high cocoa prices, he expected the strong momentum to continue this year.

The company achieved an operating margin of 15.6% last year, up from 15% in 2022, and proposed a 100 franc rise in its annual dividend to 1,400 francs per registered share.

The CEO guided for mid-single digit price hikes for 2024, as it aims for organic growth of 6% to 8% and an operating margin of 20 to 40 basis points. 

• Reuters