Covid-19 closures see fall in Lindt sales and profit for 2020

Swiss chocolate maker Lindt & Spruengli said it expected its organic sales to fall around 5-7 per cent this year before bouncing back next year after Covid-related store closures hit sales and profit in the first half of 2020.

Chocolate- makers have been facing soft demand as many grocery shoppers focused on stocking up on essential supplies and made fewer impulse purchases during the Covid-19 pandemic.

“We expect organic sales in the full financial year to be around 5 to 7 per cent lower than 2019,” the maker of Lindor chocolate balls said in a statement on Tuesday, while it now expects a operating profit margin of around 10 per cent.

The company said the outlook was based on the assumption of no more large-scale lockdowns and a Christmas business similar to last year.

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For the first half of 2020, Lindt report organic sales falling 8.1 per cent to 1.53 billion Swiss francs (€1.4bn), while net profit slid to 19.7 million francs, from 88.1 million francs in the year-ago period, Lindt & Spruengli said.

Sales were particularly affected by the restrictions on retail trade and the temporary closure of around 500 of Lindt’s own shops over Easter, normally a peak season for sales.

The group confirmed its mid-to long-term organic sales growth target of 5 per cent to 7 per cent year, and said it should be possible to exceed this range in 2021 due to the expected catch-up effect.

Operating profit should return to the level of around 15 per cent in 2022/23, and the operating margin should again improve by 20 - 40 basis points per year in the medium to long term, the group said. – Reuters