* H1 net profit up 40 pct to 48.8 mln Sfr, beats poll
* Sales rise to 1.132 bln Sfr, organic growth 8.7 pct
* Growth to slow to 6-8 pct in full year
* Sees double-digit growth in North America in H2
* Shares rise 2.2 pct, outperform market
By Silke Koltrowitz
ZURICH, Aug 20 Swiss chocolate maker Lindt &
Spruengli said continued improving consumer sentiment
in Europe and buoyant demand in North America lifted underlying
sales by 8.7 percent in the first half of the year, a pace of
growth it will not be able to maintain throughout 2013.
The maker of gold-foil wrapped Easter bunnies and Lindor
balls said in a statement on Tuesday the cold and rainy spring
weather also helped to boost chocolate consumption.
"All chocolate makers have benefited from better consumer
sentiment and cold weather, but we were able to grow about twice
as fast as the market," Chairman and Chief Executive Ernst
Tanner told Reuters in a telephone interview, adding the group's
focus on marketing, its product positioning and relations with
trade partners had helped it gain share across all markets.
The weather effect won't last into the second half when
comparables get tougher, meaning growth will slow to 6-8 percent
in the full year, Lindt said, confirming its long-term growth
Chocolate makers have seen demand pick up recently, helped
by the economic recovery in the world's biggest chocolate
market, North America, and increasingly affluent Asian consumers
discovering their taste for sweets.
Rival chocolate maker Hershey reported an 18 percent
jump in quarterly earnings on lower commodity costs and raised
its outlook for the year, while Mondelez' flagship
chocolate brands posted double-digit sales increases in the
Vontobel analyst Jean-Philippe Bertschy said Lindt's sales
growth was "above all other global players" and the targeted
margin improvement at the upper end of its long-term target
range of 20-40 basis points should be "rather easy to achieve".
Lindt shares, which have gained about 25 percent so far this
year, rose 2.2 percent at 0949 GMT, outperforming a 0.6 percent
weaker European food sector index.
"Consumer sentiment is better in Germany and the UK, but not
yet in France and southern Europe," Tanner said. "The situation
is also really improving in North America."
Lindt reported a 5.8 percent rise, up from 4 percent in the
year-ago period, in organic sales in Europe, which accounts for
65 percent of its sales, and a 12.7 percent rise, up from 6.7
percent, in North America, where it has a quarter of sales and
expects double-digit growth in the second half, Tanner said.
Germany, France, the UK, and Switzerland achieved "good to
very good growth rates", helped by new products, such as its
"Hello" chocolate range for younger customers it will soon roll
out worldwide. A sales decline in crisis-hit Italy was halted.
The improvement was driven by volumes as "no relevant price
increases could be enforced in the current somewhat deflationary
environment", but promotional activities at retailers stabilised
at a high level in the first half, Lindt said.
Tanner said Lindt would continue to open 10-15 new stores
each year. "They serve different purposes: in emerging markets,
they help increase the notoriety of the brand and here in the
West they also generate sales and profits."
Overall sales rose to 1.132 billion Swiss francs ($1.22
billion), just ahead of estimates in a Reuters poll. Net and
operating profits jumped some 40 percent, due to lower material
costs, higher volumes and efficiency gains.
Cocoa bean prices, which hit an eight-month high
earlier this month on supply concerns in West Africa, were
relatively stable in the first half, but those of cocoa butter,
milk and nuts increased, the company said. "Cocoa grindings are
stable and the outlook for the crop is good," Tanner said.
Lindt said it will invest more than 200 million francs this
year in its production sites to keep up with volume growth. "We
work 24/7 shifts in almost all our factories at the moment,"
Tanner said, adding there were currently no plans for
acquisitions given the lack of targets or a new share buyback.
ZKB analyst Patrik Schwendimann said the premium on Lindt
shares - the participation certificate trades at 25.1 times
forward earnings versus 24 times for Hershey - was justified
given its strong sales and profit dynamics.