* Lindt & Spruengli 2009 sales 2.5 bln Sfr
* Forecast was 2.6 bln Sfr
* Expects economic environment to pick up later in 2010
* Shares fall 1.7 pct
(Releads, adds background, detail, analyst quote)
By Catherine Bosley
ZURICH, Jan 19 Chocolate maker Lindt & Spruengli
(LISP.S) LISN.N expects 2009 operating profit to be at the low
end of its guidance, but sees the economic environment improving
gradually in the second half this year.
The Swiss confectioner said on Tuesday commodity markets
would likely continue to be challenging and that 2009 sales hit
2.5 billion Swiss francs ($2.5 billion), just below forecasts.
"The outlook statement was not positive, and they seem to be
suggesting they won't be able to increase prices much to offset
higher cocoa prices, and that's obviously going to put a bit of
pressure on their margin," Kepler Capital Markets analyst Jon
The economic downturn has dented appetite for Lindt's pricey
confections and margins are under pressure due to high cocoa
prices LCCc2. It has warned it would be tough to meet its 2010
profit goal. [ID:nLT342508]
Shares fell 0.53 percent to 2,237 francs by 0833 GMT,
underperforming a near flat DJ Stoxx European food and beverage
The group, known for its gold-wrapped Easter bunnies, also
said 2009 operating profit would be at the lower end of the
range announced last spring of 260-280 million francs.
Lindt's rivals are also suffering and last week Barry
Callebaut, the world's largest chocolate maker, cut its mid-term
growth goals due to lower consumption globally and the pressure
of high cocoa prices. [ID:nLB21488]
Lindt, which traces its origins to a Zurich shop in the
1840s, trades at about 21 times forecast 2010 earnings, a
premium to larger Barry Callebaut (BARN.S).
Its shares jumped last year on takeover speculation after
Kraft KFT.N's bid for Britain's Cadbury CBRY.L was first
announced, with Nestle NESN.VX cited as a possible buyer. But
Lindt dismissed the talk and Nestle has said it was only
interested in confectionery bolt-on buys, not big brands.
Cox described the Kraft-Cadbury deal as a double-edged sword
"The multiple that Kraft is paying for Cadbury doesn't look
too expensive, that would put pressure on Lindt because it has a
high multiple," he said.
"On the other hand, Kraft-Cadbury may drop the ball in terms
of trying to drive sales this year (due to the merger), that may
actually benefit Lindt." [ID:nLDE60I03R] [ID:nL9294700]
Cox also said Lindt's sales could recover more quickly than
anticipated but that its focus on Europe and the United States
could prove difficult.
"It doesn't have the emerging market exposure and obviously
that's where the confectionery is growing the fastest," he said.
Analysts polled by Reuters had expected 2009 sales to drop
12.9 percent to 2.6 billion Swiss francs. [ID:nLDE60C1RJ]
(Editing by Sharon Lindores)
($1=1.026 Swiss franc)