Financial Year 2008

Financial Year 2008:
Lindt & Sprüngli outperforms clearly the development of the market and
strengthens its position thanks to gain of new market shares

Group sales:             CHF 2.937 billion       Organic Growth: + 5.8%

EBIT:                           CHF 361.2 million       + 3 %

Net income:              CHF 261.5 million       + 4.4 %

Dividend (RS/PC):    CHF 360.- / 36.-            + 9.1 %

Kilchberg, 17 March 2009 – In the financial year 2008, Lindt & Sprüngli achieved above average organic growth of 5.8% in local currencies. This performance was attained in only marginally growing markets. The Group also reached set targets in view of profitability and improved the EBIT- as well as the net income margin by 40 basis points. Regardless of the difficult market environment, the company will continue its high marketing investments, which will have a positive effect on the following years.

Despite the difficult market environment, which deteriorated especially in the second half of the year 2008, Lindt & Sprüngli managed to grow above average and further strengthened its market position with the gain of market shares. This shows that the premium strategy pursued by Lindt & Sprüngli continues to prove successful. Especially pleasing is the fact that LINDT and GHIRARDELLI were once again the fastest growing chocolate brands in the USA. Substantial growth rates were also achieved in overseas markets, namely in Canada as well as Eastern and Northern Europe. Several countries, such as England, Spain and Italy were particularly hard hit by the financial crisis which resulted in a number of insolvencies or even bankruptcy filings on the part of important distribution channels and had an impact on the turnover in these countries.

In the year 2008, the chocolate industry was not only confronted with a steadily deteriorating consumer sentiment, but also with highly volatile commodity prices and currency influences. Despite all these exceptionally tough challenges, Lindt & Sprüngli once again reported higher profitability compared to the previous year and increased EBIT by 3% to CHF 361 million. The EBIT margin rose by 40 basis points to 12.3%, which is on the top end of the long-term target of 20-40 basis points. The net income of the Group is even more noteworthy: it rose by 4.4% to CHF 262 million. This relates to a return on sales of 8.9% (previous year 8.5%) and a return on invested capital of 17.9%. The balance sheet reflects a position of strength. At the end of 2008 the equity ratio was 61.4% (previous year 56.3%) and the Group disposes of a net-cash-position of nearly CHF 110 million. This excellent capital structure substantially contributes to withstand the current challenges and provides Lindt & Sprüngli with an excellent foundation for the future.

Outlook 2009
The aggravation of the economic conditions will grow more acute in the current year and affect the situation on the employment markets, which will have a negative impact on consumer sentiment. Lindt & Sprüngli assumes that commodity prices, especially for cocoa beans, as well as various currencies will continue to be subjected to high volatilities. In this context, Lindt & Sprüngli will not remain unaffected by the upcoming challenges and feels impelled to take respective measures to support long-term sales and profit growth.

This will entail unaltered or even increased marketing support in markets with a high growth potential and new geographies, investments in production facilities in the USA, development of Group synergies in terms of production, logistics and administration as well as restructuring of the own US retail chain.

Thanks to the investment into the processing of cocoa beans at the Lindt & Sprüngli production site in Stratham (USA) from 2010 onwards, the production of cocoa liquor, or more precisely the production from cocoa bean to finished product, will be handled locally. Thus, Lindt & Sprüngli will shorten transportation routes, lower logistical costs, reduce import customs and eliminate exchange rate risks. At the same time, Lindt & Sprüngli in the USA will redefine the structure of the own network of retail outlets over the next 18 months. The LINDT boutiques have perfectly accomplished the strategic role of establishing brand awareness and premium-image on the vast US market over the past 15 years. Thanks to the advertising effect of the LINDT boutiques, brand awareness reached over 70% and nationwide retail distribution was achieved faster than expected. Meanwhile, sales of LINDT products via US trade channels contribute a share of more than 80% to overall sales of Lindt & Sprüngli USA and continue to grow very dynamically. Therefore, the number of US LINDT boutiques in shopping malls will be reduced over the next months and concentrate on flagship and outlet stores in the long-run. Based on these measures, the profitability of US activities will improve in the future and allow Lindt & Sprüngli to even force the pace of its growth strategy in the world’s biggest chocolate market.

Due to the market environment and the one-off costs of the upcoming, future-oriented measures, 2009 is set to be a year of transition, in which long-term growth and earning targets will not be attained. The Group assumes to achieve an organic growth of 2% to 5% in the current year (long-term target: 6% to 8%) and EBIT of CHF 260 to 280 million. No later than after 2010, Lindt & Sprüngli will pursue again the set long-term targets for a yearly growth of 6% to 8% and an improvement of EBIT margin of 20 to 40 basis points on the basis of profit performance 2008 (EBIT: CHF 361 million).

Lindt & Sprüngli continues to trust in its proven and successful business model and consciously accepts the temporarily decrease in profits due to restructuring costs while at the same time increasing the investments in brand and market position. The Group is confident that this strategy will further strengthen the already solid foundation of the company in view of a secure and successful future.

Annual Shareholders’ Meeting
At the Annual Shareholders’ Meeting on 16 April 2009, the Board of Directors will propose an increase in dividend of 9.1% to CHF 360.- per registered share (previous year CHF 330.-), respectively to CHF 36.- per participation certificate (previous year CHF 33.-). The Board of Directors will also recommend Ms. Dkfm. Elisabeth Gürtler from Vienna in succession of Mr. Dr. Peter Baumberger who will retire from his mandate. Ms. Gürtler is a well-known person wide beyond the boarders of Austria who made her mark in the luxury and premium domain as Managing Director of the “Sacher” hotels in Vienna and Salzburg as well as in the context of the world-renowned “Sachertorte”.