"Lindt Consumer Research"
2004 Key Financial Data of the Lindt & Sprüngli Group 2004 2003 Change in % Income Statement Consolidated sales CHF million 2 016.6 1 800.5 12.0 EBITDA CHF million 298.6 265.2 12.6 in % of consolidated sales % 14.8 14.7 EBIT CHF million 219.4 188.7 16.3 in % of consolidated sales % 10.9 10.5 Net income CHF million 151.2 122.4 23.5 in % of consolidated sales % 7.5 6.8 Cash flow CHF million 234.5 206.2 13.7 in % of consolidated sales % 11.6 11.5 Balance Sheet Total assets CHF million 1 714.0 1 592.3 7.6 Current assets CHF million 1 160.1 1 042.2 11.3 in % of total assets % 67.7 65.5 Fixed assets CHF million 553.9 550.1 0.7 in % of total assets % 32.3 34.5 Long-term liabilities CHF million 281.5 382.6 –26.4 in % of total assets % 16.4 24.0 Shareholders’ equity CHF million 830.5 728.7 14.0 in % of total assets % 48.5 45.8 Investments in fixed assets CHF million 99.0 75.1 31.8 in % of cash flow % 42.2 36.4 Employees Average number of employees 6 293 6 011 4.7 Sales per employee 1 000 CHF 320.4 299.5 7.0 Data per share Net income per share/10 PC CHF 693 562 23.3 Cash flow per share/10 PC CHF 1 074 947 13.4 Dividend per share/10 PC 1) CHF 180 140 28.6 Payout ratio % 26.0 24.9 Shareholders’ equity per share/10 PC CHF 3 804 3 345 13.7 Price registered share 31.12. CHF 16 650 11 050 50.7 Price participation certificate 31.12. CHF 1 618 1 030 57.1 Market capitalization per 31.12. CHF million 3 598.1 2 348.8 53.2 1) Proposal of the Board of Directors The Lindt & Sprüngli Group Chocoladefabriken Lindt & Sprüngli AG Kilchberg, Switzerland Share capital: CHF 14 000 000, PC capital: CHF 7 831 550 Lindt & Sprüngli (International) AG Lindt & Sprüngli (Canada) Inc. Kilchberg, Switzerland Toronto, Canada Share capital: CHF 0.2 million, Participation: 100% Share capital: CAD 2.8 million, Participation: 100% Chocoladefabriken Lindt & Sprüngli (Schweiz) AG Lindt y Sprüngli (España) SA Kilchberg, Switzerland Barcelona, Spain Share capital: CHF 10 million, Participation: 100% Share capital: EUR 3 million, Participation: 100% Chocoladefabriken Lindt & Sprüngli GmbH Lindt & Sprüngli (Poland) Sp. z o.o. Aachen, Germany Warsaw, Poland Share capital: EUR 15.5 million, Participation: 100% Share capital: PLZ 1.3 million, Participation: 100% Lindt & Sprüngli SA Lindt & Sprüngli (Asia-Pacific) Ltd. Paris, France Hong Kong, China Share capital: EUR 13 million, Participation: 100% Share capital: HKD 0.5 million, Participation: 100% Lindt & Sprüngli SpA Lindt & Sprüngli (Australia) Pty. Ltd. Induno Olona, Italy Sydney, Australia Share capital: EUR 5.2 million, Participation: 100% Share capital: AUD 1 million, Participation: 100% Lindt & Sprüngli (Austria) Ges.m.b.H. Caffarel SpA Vienna, Austria Luserna S. Giovanni, Italy Share capital: EUR 4.5 million, Participation: 100% Share capital: EUR 2.2 million, Participation: 100% Lindt & Sprüngli (USA) Inc. Ghirardelli Chocolate Company Stratham NH, USA San Leandro, CA, USA Share capital: USD 1 million, Participation: 100% Share capital: USD 0.1 million, Participation: 100% Lindt & Sprüngli (UK) Ltd. Lindt & Sprüngli Financière AG West Drayton, Great Britain Kilchberg, Switzerland Share capital: GBP 1.5 million, Participation: 100% Share capital: CHF 5 million, Participation: 100% Lindt & Sprüngli (Finance) Ltd. St. Peter Port, Guernsey Share capital: EUR 0.05 million, Participation: 100% Honorary Chairman Group Management Dr. Rudolph R. Sprüngli Ernst Tanner Chairman of the Board and CEO Board of Directors Term expires Spring Uwe Sommer Director Ernst Tanner 2005 Marketing/Sales Chairman and CEO Country responsibilities Dr. Kurt Widmer 2007 Hansjürg Klingler Director Dr. Rudolf K. Sprüngli 2007 Duty Free Country responsibilities Dr. Franz Peter Oesch 2006 Dr. Dieter Weisskopf Director Dr. Peter F. Baumberger 2006 Finance/Administration/ Purchasing/Manufacturing Dott. Antonio Bulgheroni 2005 2004 2 Chairman’s Report 6 Business Review 2004 18 Lindt & Sprüngli in France 28 Corporate Governance 38 Financial Report of the Lindt & Sprüngli Group 40 Notes to the Consolidated Financial Statements 49 Report of the Group Auditors 50 Financial Report of Chocoladefabriken Lindt & Sprüngli AG 107th Annual Shareholders’ Meeting (Holding Company) Thursday, April 28, 2005, at 10 a.m. 56 Proposal for Distribution of Net Earnings Kongresshaus Zurich, Kongresssaal 57 Report of the Statutory Auditors Entrance K, Claridenstrasse, Zurich 58 5-Year Review 60 Group Addresses Lindt & Sprüngli This Annual Report is also available in German, which is the legally binding text. DEAR SHAREHOLDER Given these results, the Board of Directors will be proposing a 28.6 % increase in dividends to Lindt & Sprüngli is pleased to report both re- 180.– Swiss francs per registered share and cord sales and profits in 2004. For the first time 18.– Swiss francs per participation certificate in the 159-year history of our company, sales at the forthcoming Shareholders’ Meeting on surpassed the two billion Swiss-franc mark. April 28, 2005. Our growth increased by a multiple of that of the overall market and the group profit once More than being just a dependable dividend again showed double-digit progress. All subsi- source, Lindt & Sprüngli shares are a veri- diaries contributed to this success as a result of table stock market star. From the annual low substantial progress in every product category. on January 20, 2004 (closing price: 10,975 Swiss Accordingly, we were able to continue strength- francs), the registered shares listed on the Swiss ening our position in every important market Exchange SWX shot up to an annual high of and on a broad front, thus creating an excellent 16,650 Swiss francs on the year’s last day of trad- foundation for the future development of our ing. In the year under review, our shares gained group. about 50%. The participation certificates even gained 57%, while the overall market in Swit- Organic growth of 12.5% in local currency is zerland (measured by the Swiss Performance the highest increase ever recorded. This fine Index) rose just 6.9%. Many market commen- result was even achieved in countries where tators emphasized the sustainable innovation chocolate consumption grew at the low rate of (product range and marketing) and effective 1.5 to 4%. The slightly lower growth in Swiss cost management at Lindt & Sprüngli. It will francs of 12% to 2.016 billion Swiss francs is be no surprise, then, that recent reviews rank explained by the weakened dollar. Compared Lindt & Sprüngli third among all Swiss equities 2|3 to the previous year, operating earnings before interest (EBIT) rose by 16.3% to 219.4 mil- in a 30-year performance comparison. Our shares continue to be regarded by both pri- lion Swiss francs, outperforming sales growth. vate and institutional investors as a strong The group’s net income improved even more and safe stock. For the past twelve years our strongly, with a gain of 23.5% to 151.2 million shares and participation certificates have Swiss francs, representing a return on sales of shown a yearly increase in value at an aver- 7.5% (6.8% in the previous year). Cash flow age of 15%. The Lindt & Sprüngli participa- climbed by 13.7% to 234.5 million Swiss francs. tion certificates are now also listed in the new On December 31, 2004, the equity ratio stood at Mid-Cap-Index SMIM of the SWX. 48.5%, while the average return on equity was 19.4%. Thanks to the excellent earnings, opti- mal cost management, and ongoing efficiency increases in every sector of the business, Lindt & Sprüngli was able to become debt free in the year under review. This index is comprised of the 30 biggest Mid- Despite these market conditions, Lindt Cap stocks on the Swiss equity market with & Sprüngli managed to achieve the highest the greatest liquidity that are not already repre- organic growth in the company’s history. There sented in the SMI. With a market capitalization are a number of reasons for this performance, of 3.6 billion Swiss francs at the end of 2004, foremost among them being our company tra- Lindt & Sprüngli is one of the 50 largest and dition founded on quality, know-how, and the most valuable Swiss companies, having gained passion of our more than 6000 employees. still further ground in the year under review. In Since the early days nearly 160 years ago, we the area of brand valuation, LINDT has been have been permanently committed to the high- ranked in the 14th position, thus being one of est quality standards. In recent years, we have the Swiss brands with the highest added value. continued to develop and expand the premium Domestically and abroad, constant progress in segment, advancing ever closer to the ultimate brand awareness is evident from year to year. taste experience with a wide range of products, such as the EXCELLENCE line of chocolate The results of the past financial year were bars. The fact that we have interpreted the signs achieved in a yet highly volatile environment. of the times correctly with this deliberate focus, The political situation in the Ivory Coast still and by the same token satisfied our consumers’ does not seem to be under control, while the expectations, is also reflected in the current dis- availability and costs of various raw materi- cussion over the growing tendency to “trading als, such as hazelnuts, still suffered from the up” from quantity to quality. The trend on the effects of the 2003 summer heat wave. Under part of consumers to prefer high quality and the influence of the persistently weak dollar more expensive products is becoming increas- and sharply rising oil prices, economic growth ingly apparent. The products purchased carry forecasts were revised downwards in some in- a brand symbol of higher quality, better taste, dustrial countries, including Switzerland, to- wards the end of 2004. In several European lifestyle and “well-being,” and contribute as well to the general aspiration to enjoy the 4| 5 countries, strikes were called against company “good things in life.” Consumers are increas- closures and reforms which had a dampening ing their demand for prestigious top products, effect on consumer mood. In this market envi- which amounts to making a personal statement ronment, the “hard discounters” gained ground, in favor of high quality of life. Quality, trust, and a sales channel in which our products are only product innovations are playing an increasingly available on a limited scale, if at all. important role. Lindt & Sprüngli has come to be regarded as the most innovative company in the chocolate industry – not just by the trade, but also by consumers. Every innovation begins with a question, and We are proud of being able to maintain a high that question is founded on consumer research. level of stability among our staff in a fast-mov- The extent to which we study consumers’ wish- ing and often impersonal environment. We are es and expectations is apparent from our an- firmly convinced that we can only achieve our nually rising investment in systematic research high quality standards by inspiring confidence concerning consumer habits, from which our in the permanence of our values – because, in group has derived valuable information in re- the final analysis, quality always depends on the cent years. Targeted and consistent efforts to people’s commitment to excellence. On behalf maintain the premium image of the LINDT of the Board of Directors and group Manage- brand are certainly one of the most demanding ment, I want to thank all our staff for their dedi- tasks faced by the marketing experts at Lindt cated and motivated efforts. Our thanks also go & Sprüngli. The outcome of our efforts is that, to our consumers. The continuous growth in the today, LINDT brand awareness is increasing sales of LINDT products and the rising market all over the world. We intend to strengthen this shares we are able to achieve in all markets are position consistently and ensure that our name proof that more and more people are treating remains present in the minds of every chocolate themselves or others with LINDT specialties, lover. The trend towards growing familiarity with increasing frequency. We must maintain with the brand and its values is measured each and even accentuate this trend. Our thanks also year, and the progress achieved is extremely en- go, of course, to our trading partners and suppli- couraging. ers, without whom our success would be impos- sible. At the same time, we owe a debt of grati- Lindt & Sprüngli also maintains high values in tude to our shareholders, whose confidence has its personnel policy: stability, continuity, basic enabled our company to remain so prosperous. and advanced training, and safety are of the 4| 5 essence to us. We place value on a motivating OUTLOOK and fair working climate. We know that pro- found know-how, years of experience, and our In recent months, consumer attitude has re- employees’ identification with our products, our mained on a relatively constant level and there brand, and our company, is the basis for Lindt are no indications of substantial change in the & Sprüngli’s continuing prosperity. near future. In many European countries, price seems to be the only argument by which con- sumer goods are sold. We will oppose that trend. Consumers are certainly willing to spend more for quality if the value-for-money ratio is cor- rect. We will work hard to maintain that ratio and achieve our long-term annual sales growth goal of between 5 and 7%, with earnings up by between 8 and 10%. Ernst Tanner Chairman of the Board of Directors and Chief Executive Officer 2004 MARKETS In this somewhat volatile environment, Choco- ladefabriken Lindt & Sprüngli (Schweiz) AG The consumer mood brightened a bit with the reported sales of CHF 216.9 million (previous onset of economic recovery. The first signs of year CHF 192.7 million); this is equivalent to a rallying tourism industry also proved to be an impressive growth of 12.6%. The fact, that a boon to the chocolate market. After the losses LINDT is not only doing well in its export busi- suffered during the exceptional summer heat ness, but is also growing again in the Swiss do- wave of 2003, chocolate business rose again in mestic market, is particularly pleasing. A great the summer of 2004 – thanks to moderate tem- number of product innovations have been en- peratures, which generally tend to encourage couraging growth. These include “Les Grandes,” chocolate consumption. a new line of 150 g premium chocolate bars in three versions, with a particularly high content In the Swiss retail sector, the trend towards of hazelnut or almond for a completely new consolidation, observable in recent years, con- taste experience. The EXCELLENCE range 6|7 tinued. One large retailer moved quickly, con- verting newly acquired department stores into has been extended to include several dark va- rieties, with a very high cocoa content and new proprietary outlets. Another major chocolate seasonal recipes, such as “Caffè Latte” and sales channel also changed hands, leading to “Croquant de Caramel.” The classic CHOCO- a drastic reduction in the number of retail LETTI line was completed in the fall to include outlets. An announcement by German hard a milk recipe that is proving very popular with discounters of their intention to penetrate the children. Following the successful “Petits Des- Swiss market gave rise to a lively debate about serts” pralinés, three new filled bars with des- Switzerland as a “highprice island.” This last sert recipes were added to the assortment. development intensified price competition be- LINDOR went on to consolidate its market tween the sales channels to an unprecedented leadership with assorted packs, a new “Straccia- degree. tella” variety, and gift packaging for Valentine’s Day and Mother’s Day. The exceptional success of LINDOR, which has continued unceasingly for 55 years, reached new records in 2004. The fall saw a major relaunch of the LINDT The German domestic demand has been flat classic assorted pralinés. This move had been for three years now, despite growing exports in preparation for two years with careful atten- and the cyclical economic recovery. While con- tion to every detail and many steps were taken sumers have been unsettled by the prolonged to support it. Almost all the different pralinés debate over reforms and rising unemployment, are now being offered with new recipes, new private consumption has remained depressed. shapes, and new fillings, and are presented in Despite this trend, development of the choco- prestigious new packaging as “Connaisseurs” late market proved favorable, displaying satis- and “Pralinés du Confiseur.” More than ever factory growth due to the rather cool summer before, they are now a prominent ambassador and a variety of innovations. Although LINDT of Swiss chocolate culture at home and abroad. is deliberately absent from the particularly price This relaunch was supported by an advertising aggressive hard discount segment, Chocolade- campaign and additional marketing measures. fabriken Lindt & Sprüngli GmbH nevertheless grew faster than the market, with sales up by Prominent among the promotional activities a strong 8% at EUR 255.6 million (previous was the “Gourmet Festival,” involving 130 year EUR 236.6 million). 8|9 LINDT Maîtres Chocolatiers: during the most extensive tasting campaign Switzerland has Thanks mainly to the EXCELLENCE line, ever seen, they travelled throughout the coun- the chocolate bar segment recorded double- try for three days to present their fine creations digit growth. With the great success of the dark and their passion for LINDT to consumers. EXCELLENCE varieties, LINDT has become the leader in the dark chocolate market. The Several projects for investments in production introduction of new varieties was also helped lines and equipment were initiated at the Kilch- along with TV advertising. In the filled bars seg- berg plant and are due for implementation dur- ment, the successful launch of the new dessert ing 2005. These activities are being undertaken bars, with their doublelayer filling, added fur- to increase capacity efficiency. ther dynamism. Carefully selected new praliné assortments appealed to buyers’ emotions with the “Von Herzen” (From the Heart) and “Viel Glück” (Wishing you Luck) gift range. Here again, sales rose. The FIORETTO line was extended to include the “Stracciatella” and “Caramel” varieties. LINDT maintained its clear market leadership in Easter business and won consumers with new products like the GOLD BUNNY in a dark chocolate version France’s retail scene experienced a tough year and the GOLD BUNNY egg. A superb Advent with increasingly aggressive discounters and calendar for loving couples and the magnifi- massive pressure on prices. Most retail chains cent new “Schatz der Zaren” (Treasures of the and producers fell in line with the government’s Czars) theme, with highly decorative packaging pressure for price cuts. However, as an acknowl- and fine Russian recipes, were the outstanding edged premium supplier, Lindt & Sprüngli was innovations for Christmas business. There was able to maintain its prices while remaining one an increase in productivity, while at the same of the few brands to achieve strong growth. This time investments were also made to expand led to an improved partnership with the trade production capacity. and strengthened the profile of established retailers against the hard discounters in the Although unemployment in France remained chocolate segment. The willingness of French high, the economy did gain some ground. consumers to pay somewhat higher prices for Growth was due primarily to exports and ris- premium quality is clearly growing. Due to the 8|9 ing private spending. Following years of stag- nant figures, the chocolate market registered fact, that consumers are demanding more and more creative and original products, innovation the positive effects of a rise in per capita con- – one of LINDT’s great strengths – is becoming sumption. The value of the overall market rose increasingly important. by 3% and the volume by 1.5%. This upward trend was driven primarily by the large volume Lindt & Sprüngli France SA improved last of newly launched products, higher spending year’s high growth rate once again by an excel- on advertising and promotion, and favorable lent 15.8% to reach EUR 242.5 million. Mar- climatic conditions in the summer. keting and sales activities were expanded, and the LINDT brand was given sustained support. As a result, Lindt & Sprüngli was once more the fastest growing company in the French choco- late market, gaining additional market shares. Innovative concepts – such as the “Petits Des- serts” filled bar assortment, with the “Tarte au Citron” variant, and the launch of the “Noisette Sensation” line of 200 g bars – stimulated fur- ther growth last year. The EXCELLENCE line was also expanded with great success, while the classic LINDT “Double Lait” bar continued to delight families with children. Growth in the Easter and Christmas business The two Lindt & Sprüngli subsidiaries in Italy reached double-digit rates; Easter sales in par- together achieved sales worth a total of ticular rose strongly, not least thanks to the EUR 208 million, which is equivalent to a success of the GOLD BUNNY. Among the pleasing growth rate of 5.6%. Lindt & Sprüngli assorted pralinés, it was the newly launched SpA improved its sales by 6.1%, hence grow- “Petites Merveilles” that contributed to ing faster than the market. This was especially LINDT’s market leadership. The PYRÉNÉENS true for the chocolate bar segment, with the “Rocher” proved to be one of the most success- EXCELLENCE and the classic 100 g bar range, ful new launches of recent years. The “Festival as well as the LINDOR truffles. In anticipation des Saveurs,” now a firmly established tradition, of gaining an even larger share of the growing plus increasing point of sales activities in the Easter business, LINDT is expanding its ca- retail trade allowed LINDT to gain new con- pacities in this segment to include ever more sumers and demonstrate the expertise of the attractive new festive offerings. Particularly LINDT Maîtres Chocolatiers. successful lines during Easter 2004 were the big The trend in the Italian economy was typified “Rocher” and LINDOR Easter eggs and the GOLD BUNNY. Progress was achieved in all 10|11 above all by rising exports with no improvement product groups, both in the traditional specialty of the consumer sentiment in the country. The trade and in the modern distribution channels, latest surveys show that private consumption of which continue to grow. food products remains more or less stable af- ter ten years of growth. Consumer confidence has hit the lowest level in four years. But while volumes did not do nearly so well, with growth of just 0.7%, the value of the overall chocolate market grew by 3.9%. The increase in value is explained primarily by the boom in Easter eggs. Annual per capita chocolate consumption is still well below the European average, but Italy is constantly gaining ground. In this environ- ment, LINDT is a permanent winner in terms of market shares. With an impressive and highly creative product The continuing trend towards dark chocolate range for the spring-summer and fall-winter also helped the EXCELLENCE bar line, with seasons, and the unusually attractive Christ- its new recipes, to achieve significant market mas and Easter collections – sold exclusively success, hence leading the LINDT brand to the through specialty outlets – Caffarel SpA grew number two position in the bar segment. by 4.6%. New product categories, such as “Mar- rons Glacés” and “Panettoni,” reinforced and In Spain, per capita chocolate consumption, expanded the strong partnership with these tra- rather weak until now, moved closer to the ditional sales channels. Thanks to the popular European average in the year 2004, with double- big Easter eggs and the prestigious “Colomba,” digit growth rates. Development of the overall Easter business proved particularly positive. market was once again easily outstripped by The new “Dolcetti” line of pastry articles with Lindt y Sprüngli (España) SA, with a strong the Caffarel seal met with an enthusiastic re- 16.5% rise that represents a further significant sponse from consumers. Thanks to the open- gain in market share. With consistent focus on 10|11 ing up of new markets, the export business also improved with double-digit growth as did the the successful LINDOR line and targeted mar- keting measures, LINDT was able to firm up business-to-business segment. its position as the fastest growing brand in the praliné segment for the second year in a row. The Austrian chocolate market grew slightly The EXCELLENCE range took over market over the previous year against a background of leadership in the dark chocolate bar area, while a generally flat food trade. In Austria, the mar- filled bars reinforced their leadership position ket environment is dominated by two major with new products, recipes, and formats, espe- trade partners and an aggressive expansion cially the 150 g bar. The Easter business with by hard discounters, which exert strong pres- a 50% growth rate, driven foremost by the sure on prices. Despite this backdrop Lindt GOLD BUNNY, towered above all. & Sprüngli (Austria) Ges.m.b.H continued to consolidate its position and gained new market shares, with sales up by 4.6% at EUR 32.1 mil- lion. This growth was primarily driven by inno- vations, such as the “fresh truffle” concept from LINDT, “Goldener Herbst” (Golden Fall) by HOFBAUER, and the new “Modern Orange” umbrellas by KÜFFERLE. The British chocolate market advanced with 5% LINDT’s activities in the regions of Central and growth last year. This progress was largely sus- Eastern Europe, Scandinavia, and the Benelux tained by the Easter and Christmas business, countries remained positive. Almost all of these while the premium chocolate segment grew sig- countries contributed to the extraordinary nificantly faster than the market as a whole. In this growth of 57.7%. In Sweden, Lindt & Sprüngli highly competitive chocolate market, the second has taken specific measures to benefit even more largest in Europe, Lindt & Sprüngli (UK) Ltd. effectively from the good local market poten- has continuously achieved double-digit growth tial. As a result, sales doubled and the market in recent years. But it was even more dynamic in position was greatly improved. Performance in 2004 with 31% higher sales. In the premium seg- the Russian, Bulgarian, Czech, and Hungarian ment, LINDT established itself as the major part- markets also appear to be highly promising. ner for three big retail chains. Once again, growth was driven primarily by the LINDOR line and While the political agenda in the United States the GOLD BUNNY. The EXCELLENCE bar was dominated by the war in Iraq and the line also achieved double-digit growth in this hotly contested market segment. Presidential election, the economy benefited from the long-awaited upturn. Parallel to that, 12|13 sustained improvement of consumer attitude After years of horizontal movement, the Polish could be observed. In the retail trade, the posi- chocolate market as a whole reported strong tive long-term trend towards greater innovation growth. This positive development – which and higher quality benefited both LINDT and brought much keener competition – was driven GHIRARDELLI. There was little movement largely by the rapidly expanding modern re- on the chocolate market, but the growing po- tail trade, especially the department store seg- pularity of premium products did favor the ment. But signs of incipient consolidation could growth of the two Lindt & Sprüngli US sub- already be seen. Lindt & Sprüngli (Poland) sidiaries, which together reported sales worth Sp. z o.o achieved noteworthy success with the USD 285.8 million, equivalent to a substantial LINDOR line, thus reinforcing its position. 13.9% growth rate. Latest market research shows still great po- tential for LINDOR. The Easter business also proved highly positive with double-digit growth throughout the assortment. With sales up 21.5%, Lindt & Sprüngli (USA) highly effective marketing activities, the retail Inc. once again reported a record result. This un- division – with 13 stores in cities such as San interrupted positive development was boosted Francisco, Orlando, Chicago, Miami Beach, and in equal measure by constant progress in whole- other attractive locations – reported its best sale, where LINDT was the fastest-growing year yet with double-digit growth rates. chocolate brand and won significant market shares, and by the LINDT chain of boutiques. Canada’s economy was back on track with solid In a trade environment that was difficult for growth last year and consumers were in an opti- specialty retailers overall, the LINDT shops mistic mood. The chocolate market also ad- achieved their best growth so far for compa- vanced by 4%. Thanks to a reinforced presence rable stores, with a total of 93 permanent and in the highly concentrated retail trade – espe- 23 seasonal sales outlets. A very promising start cially for the seasonal peaks – LINDT brand was made by the boutique that was launched awareness has now reached a very high level of with a new design concept in a shopping mall 95%. This greatly helped in driving up sales of 12|13 in Massachusetts. LINDT achieved its biggest sales gains with its exceptionally successful the omnipresent EXCELLENCE chocolate bar line and LINDOR truffles. With strong growth EXCELLENCE range of chocolate bars, with of 16.5%, Lindt & Sprüngli (Canada) Inc. the LINDOR truffles, which have now become won a significantly higher share of the overall a classic in the US, and with the seasonal trade, Canadian chocolate market. For chocolate bars, where demand for the finest Swiss premium LINDT moved ahead to second place. Christ- chocolate by LINDT is particularly strong. mas and Easter business proved particularly good: in Canada, too, the GOLD BUNNY has The second US subsidiary, Ghirardelli Choco- already become a cult. late Company, also reported an excellent year with 9.1% growth. Sales of GHIRARDELLI SQUARES, which were supported for the first time by a national TV campaign, and reported double-digit growth, were outstandingly suc- cessful. In response to the constantly rising demand for these popular little tablets, a new production line was brought into operation in early 2005. In a flat market, GHIRARDELLI “baking chocolate” grew strongly and improved its market share. Thanks to the recovery of US tourism, as well as innovative products and The longest phase of economic growth in In the world’s most dynamic economic region, Australia’s history continued unabated, bring- Lindt & Sprüngli (Asia-Pacific) Ltd. achieved ing consumer confidence to its highest level in double-digit growth. Development in the ten years. Last year, the chocolate market also key markets of China, Hong Kong, and Japan expanded by 2% although there were few in- was particularly positive, even if the level re- novations to find in the boxed chocolate seg- mains relatively modest. In these regions, too, ment. This left plenty of scope for the premium the emphasis was placed on EXCELLENCE suppliers. Lindt & Sprüngli (Australia) Pty. Ltd. and LINDOR. SWISS THINS, whose assort- achieved an impressive 34.3% sales growth and ment was extended to include “Mocha Milk,” remained the market leader by a wide margin in were also particularly important in Asia. After the premium chocolate segment, making it the a lengthy break, LINDOR is again being sup- fastest growing chocolate brand. In the assorted ported by television advertising in Hong Kong. praliné range and the Easter business, excellent results were reported. Implementing a new store Despite the economic and political environ- concept, the first LINDT Café was opened with big success in November 2004 in Sydney. After a ment, which remains difficult, sales in South America also reported double-digit growth 14|15 few months in operation, this new concept looks over the previous year. The main contributors to be highly promising in Australia. to this were the launch of EXCELLENCE 85% and EXCELLENCE “Orange Intense,” In Africa and the Near and Middle East, the polit- together with the classical 100 g bars and as- ical situation remained tense, especially in Israel sorted pralinés. and Iraq. However, high oil prices did boost con- sumption in the oil-producing countries. After a long phase of stagnation, the main distribution partners began to invest again in the expansion of their networks and opened many new stores, with the region being able to report double- digit growth for Lindt & Sprüngli. Particularly favorable was the development in South Africa, the United Arab Emirates, Libya, and Algeria. These advances are attributable above all to an improvement in assortment, distribution, and positioning of the brand. On the product side, sales were boosted mainly by EXCELLENCE and LINDOR. Following an extremely difficult year in 2003, raw material side because worldwide butter which was hit hard by the war in Iraq and SARS, consumption exceeded powder consumption. the situation gradually settled down in the year Consequently, the price of cocoa butter rose under review. The duty-free/travel retail busi- continuously. The overall assumption is that ness benefited from this positive trend. Two new prices will increase slightly, especially because packaging versions of the popular Napolitain the situation in the Ivory Coast remains now as “Carrier Boxes” and the relaunch of a mocha before uncertain. variation of SWISS THINS, brought LINDT substantial sales and market share growth. After four turbulent years with high price The opening of a chocolate boutique, led by volatility, the situation on the vanilla market “Nuance,” at the new Airside Center at Zurich has stabilized again. A degree of consistency is Airport promises great success. This new con- expected for the immediate future in terms of cept strengthens the presence of the LINDT both quantities and quality. Forecasts suggest brand at this important airport and makes sure that prices will revert to a normal level. The al- 14|15 that numerous travellers will carry the prestige, tradition, and quality of LINDT Swiss choco- ready high prices for hazelnuts, and even more so for almonds, rose further last year due to late with them all over the world. strongly increasing demand, low harvests, and a severely restrictive selling tactic on the part PROCUREMENT of the producers. Sugar prices fell slightly, now that the important producer Brazil has been In the first half of the year 2004, cocoa prices fell continuously increasing supply for five years. steadily, though they picked up again sharply in A contrary development was observed for milk July and August following adverse weather fore- powder, where falling supply and rising demand casts. In September, prices were already easing have been forcing prices up since early 2004. after the long-awaited rainfall in West Africa, and forecasts for the 2004–2005 harvest were once again more optimistic. By comparison with the record 2003–2004 harvest, the next crop will be significantly smaller. Speculation, and above all the tense political situation in Ivory Coast, led to hectic upward price movements on the international cocoa market. Stable peace was still not restored to this most important produc- ing country last year. The rise in price of cocoa butter was the greatest single cost factor on the EMPLOYMENT AND STAFF synergies. The Swiss subsidiary company Choco- ladefabriken Lindt & Sprüngli (Schweiz) AG is In its last financial year, the Lindt & Sprüngli a good example of the versatile efforts made in group employed an average of 6293 employees the area of ecology and sustainability. on a fulltime basis (6011 in the previous year). One principle of the Lindt & Sprüngli credo is The first global employee survey was made in literally: “Our intention is to interact carefully the fall of 2004. Eight of the 13 group compa- and conscientiously with the environment and nies took part. The participation rate was an the communities in which we live and work.” outstanding 81%, reflecting the interest, motiva- Lindt & Sprüngli has been actively expressing tion, and identification employees feel with the its corporate conviction in this principle since company and its product. Significant strengths 1996 with its participation in a pilot project led were singled out as being the nature of the jobs by the Energie-Agentur der Wirtschaft (Energy themselves, the emphasis on quality, the good Agency for the Economy) in support of volun- working conditions and, last but not least, the tary sustainable climate protection. The proj- confidence staff has in management – which is ect’s objective is a range of individual measures 16|17 also reflected in the above-average job satisfac- that will result in the sustainable reduction of tion. In subsequent phases, these results will be electricity, gas, and oil consumption throughout analyzed across the board and project groups the business. will be formed with the aim of optimizing con- ditions. This kind of survey shall be repeated at regular intervals to verify developments and changes in the areas concerned, which will allow the group to create benchmarks in the process. ECOLOGY AND SUSTAINABILITY Successful programs in the environmental ac- tivity sector are underway for all the group production companies. Targets are set and veri- fied each year, and the results are discussed at international meetings with all the concerned subsidiaries. The successes achieved and the experience acquired not only motivate the en- vironmental officers but also create valuable A number of companies based along Lake The next steps towards a sustainable commit- Zurich have voluntarily agreed upon environ- ment to the environment have already been de- mental protection goals, with the aim of achiev- fined. The plan for 2005 is to generate heating ing or even surpassing them at the earliest and hot water as far as possible by using waste opportunity. To this end, these companies are heat from the production plant, instead of burn- exchanging ideas on a regular basis and sharing ing gas and oil for this purpose. To achieve this the positive experience in different sectors. goal, the second plant in Altendorf on Lake Zurich is being equipped with powerful heat Lindt & Sprüngli’s success in this area is mea- pumps. surable. Compared to the initial figure in the year 1996, 19% more output is being derived In Switzerland, efforts to promote the eco- today from the same volume of energy, while nomical use of energy resources in the years simultaneously emitting 18% less CO2. The var- 2003 and 2004, won the Energy Agency for the ious individual measures taken to achieve en- Economy’s certificate for voluntary climate 16|17 ergy savings include the improved insulation of protection. As is the case in Switzerland, con- windows, roofs, and facades, the optimization of stant efforts and investments are being made in stirring machine operation, a better separation all the other Lindt & Sprüngli production com- between heating and cooling zones, and con- panies in pursuit of a conscientious and sustain- trolled switch-off for both lights and ventilation. able environmental policy. With the steps taken so far, the savings origi- nally planned for the year 2008, have already been reached and exceeded. Sustainable use of energy resources can also have a concrete daily impact on the well-being of people. The open- air swimming pool in Kilchberg, for example, is heated with waste heat from the production facilities – all to the greater enjoyment of the local population during the swimming season. In France, the EU country with the largest land The influence of France throughout the world mass (547 000 km2) and the second largest is so deeply rooted that Benjamin Franklin population (just over 60 million people), intel- (1706–1790), one of the leading figures behind lectual and cultural values are united in a way American independence, declared: “Everyone that is virtually unparalleled anywhere else in has two nations and one of them is France.” the world. French history has had a lasting influ- ence in many respects, far beyond the confines France has a Mediterranean and an Atlan- of Europe. One outstanding example of this is tic seaboard. This geographical situation led the French Revolution of 1789. The principle of long ago to an active cultural and commercial Liberty, Equality, Fraternity led on to the Decla- exchange across the oceans and laid the basis ration of Human Rights, which is regarded today for many pioneering innovations in the most as the most important principle underpinning varied spheres of human life. It is hardly sur- most legal systems. Shortly afterwards, in 1804, prising, then, that France was home to so many the thinking behind the French Revolution was outstanding figures, philosophers, writers, art- 18|19 embodied in the “Code Napoléon,” the French civil code, much of which remains in force to- ists, and scientists. These include Marie Curie, who in 1903 was the first woman, along with day. This code, which went on to influence other her husband Pierre, to win the Nobel Prize for legal systems beyond the borders of France, can physics. In 1911, she won this honor a second surely be regarded as one of the most important time, for chemistry. France also has more win- heritages of the French Revolution. ners of the Nobel Prize for literature than any other country. But in other areas, too, the coun- try has distinguished achievements to its credit. In 1895, for example, the brothers Louis and Auguste Lumière invented the cinema, while in 1894 Baron Pierre de Coubertin initiated the modern Olympic Games and founded the IOC (International Olympic Committee). An- other example of outstanding performance is the French high-speed train, the TGV (Train à Grande Vitesse), which holds the world speed record of 515 km per hour. France is a country in which the pleasurable CHOCOLATE – A ROYAL TRADITION sides of life as well have always been appreci- ated. Its many culinary traditions have survived Chocolate reached France in 1615, when the down the centuries and are celebrated today Spanish Princess Anna of Austria married the in people’s homes or in restaurants and inns. French King Louis XIII. At that time, it was France is famous all over the world for the art of still an exclusive beverage reserved for the excellent cuisine and enjoyment of life. Creativ- Spanish royals and nobility. Sometime around ity and savoir-faire have reached new heights in 1800, solid chocolate was being made, but as in products like wine and cheese. General Charles Switzerland, industrialization of the chocolate de Gaulle is once said to have commented hu- industry did not begin until the second half of morously: “How can we be expected to govern the 19th century. With the advent of automation, a nation that has a different variety of cheese the “democratization” of chocolate began also for every day of the year?” The German expres- in France, making it an affordable and therefore sion “Eating like God in France” certainly did widely consumed confectionery product. Today, not come about by chance; eating and drinking have always been of the utmost importance to the French chocolate industry is highly con- centrated, a fact that is reflected in an equally 20|21 the French. concentrated retail trade. With yearly per capita chocolate consumption of nearly seven kilos (2002), France ranks ninth among the most im- portant consumer countries. The French choco- late market has a number of unique character- istics. For one thing, the proportion of dark chocolate is higher than anywhere else, and the trend is rising. Another distinctive feature is the highly seasonal nature of pralinés and other confec- tionery articles; the bulk of these are tradition- ally consumed during the festive season at the end of the year. LINDT IN FRANCE – A STORY Six years later, Rozan developed the WITH ARISTOCRATIC ROOTS PYRÉNÉENS praliné, which remains one of the most popular and best-selling chocolate spe- It may be that Rodolphe Lindt had already export- cialties in the French LINDT Christmas assort- ed his famous Chocolat Surfin – the first softly ment. In 1960, license sales in France reached melting chocolate in the world – to France. Be that 10%, and one decade later they amounted to as it may, France was not a very important ex- over 25% of the total Lindt & Sprüngli turn- port market for Lindt & Sprüngli in the early over. LINDT became increasingly the mainstay days. It was not until a decade after the Second of sales for Chocolat Rozan SA. World War that the decisive step toward future development took place. In 1954, a license THE SWISS ART OF CHOCOLATE- agreement was signed between Lindt & Sprüngli MAKING CONQUERS FRANCE and Chocolat Rozan SA of Oloron Ste Marie, near Pau. In that same year, production of LINDT Since 1960, Chocolat Rozan SA has changed 20|21 chocolate began in the foothills of the Pyrenees. hands many times. New owners followed in quick succession until Lindt & Sprüngli ac- The owner of a small power plant in Oloron quired a majority shareholding interest of 65% Ste Marie, Count Maurice Rozan de Mazilly in 1977, gaining control over the French busi- founded Chocolat Rozan SA in 1921. Access to ness. At the same time, this was the first major low-cost energy and readily available seasonal step for LINDT toward the creation of an inter- labor were probably decisive reasons for build- national group of companies with a Swiss tradi- ing the plant in Oloron Ste Marie, which was tion. In 1989, the firm became a wholly owned way off the beaten track of French industry. subsidiary, a milestone on the road towards the long-term objective of serving all of Lindt & Sprüngli’s important markets, independently and under the company’s own responsibility. The impressive growth of sales in France called Today, the French subsidiary Lindt & Sprüngli SA for corresponding investments. Alongside con- achieves sales worth EUR 242.5 million (2004). stant spending to increase productivity and An average of 1000 motivated and expert assure quality, production capacities were manufacturing employees produce more than 450 different chocolates every year with some boosted significantly. In the last ten years, some CHF 120 million have been invested in equip- 150 different recipes, both for the French market ment and buildings. Today, the Lindt & Sprüngli and for export. At the company headquarters in plant in Oloron Ste Marie is one of the most Paris, expert marketing and sales specialists en- modern in the French chocolate industry. sure that LINDT specialties are marketed with attractive communication concepts and reach With dedication and passion, the LINDT Maî- the retail shelves quickly. tres Chocolatiers and the French research and development department have been placing PRESTIGE AND ELEGANCE their expertise in the development of new and IN THE COUNTRY OF GOOD TASTE innovative recipes and product concepts un- til, after months of tenacious work, they be- Of the chocolate-eating 94% of the French pop- 22|23 come perfect and unique masterpieces of the ulation, 70% enjoy this pleasure at least once art of making chocolate. Products, such as the each week. Over 30% of these consumers can EXCELLENCE line of chocolate bars, which is be described as genuine connoisseurs because now distributed and loved worldwide, were first they eat chocolate every day. Consumer hab- created in France. its in France differ considerably from those in other countries. Almost half of all the chocolate sold here is of the dark variety. Lindt & Sprüngli took account of that trend long ago and devel- oped its first EXCELLENCE bar with a high cocoa percentage of 70% back in 1987. But LINDT also offers consumers a whole Delicate and superb pralinés are traditionally range of additional specialties in all grades presented to friends, colleagues, and family of dark, extending from the widest-rang- members during the Christmas season. In this ing bars through praliné assortments to the segment, the high-quality LINDT products, with PYRÉNÉENS. While in France 45% of all their particularly elegant and prestigious gift chocolate products are consumed in bar form character, are very popular. Lindt & Sprüngli throughout the year, pralinés and confection- therefore offers an extensive Christmas range ery products are mainly sold and eaten during in France. Examples include the “Champs the “Fêtes de fin d’année,” i.e., the Advent and Elysées” assortment of fine pralinés, “Lindola” Christmas festive season. With its LINDOR luxury pralinés, and the entirely new “Petites truffles, “Petits Desserts,” and “Connaisseurs” Merveilles” praliné assortment. The inimitable pralinés, LINDT is also achieving significant PYRÉNÉENS in three variations, which were progress in the year-round praliné business and extended at the end of 2004, to include a new helping to invigorate this segment, in which variety called “Les Rochers,” are also part of 22|23 there is still room for substantial growth. the traditional LINDT Christmas offering. LINDT is no less innovative in the important chocolate bar segment; year after year, it in- troduces innovations regarded as trendsetters in the branch. In 2004, an all-new line of 200 g chocolate bars in five different versions was created under the name “Noisette Sensation.” Each of these five bars combines the crispness of freshly roasted large hazelnuts or almonds and caramelized slivers with a gently melting praliné filling and original ingredients, such as cherries, meringue, and caramel pieces or apri- cots and nougat. The creativity of the LINDT Maîtres Choco- INNOVATION AS THE DRIVING latiers also seems to know no bounds when FORCE BEHIND SUCCESS it comes to the exceptionally successful EXCELLENCE bars. The unlimited creativity and dynamism of Lindt & Sprüngli in the French chocolate tablet seg- This line of large, extra-thin, 100 g bars was ment can be seen in the fact that in 2004, the launched in France as a genuine innovation in LINDT brands figure no fewer than seven times the year 1987 Since then, it has been enriched in the list of top ten innovations in this market . each year with new and original recipes in a se- segment. lection of different tastes. In the dynamic mar- ket segment of filled bars, LINDT also serves But although Lindt & Sprüngli is growing in up genuine innovations every year. The “Petits France five times faster than the overall market, Desserts” product range launched in 2003, con- and the LINDT brand awareness has reached sisting of sophisticated bars with typical fillings the number one position in the rankings, we and drawing on traditional dessert recipes, was are still working to further improve our per- received enthusiastically by consumers from formance. There are many areas of the French 24|25 the outset. It has reported ever-growing success chocolate market that still have great potential, since then. where we can set the trend as a premium sup- plier, and are determined to do so. With our LAPIN OR (GOLD BUNNY) and other typi- cal Easter products, for instance, we have made a successful entry into the Easter business. The result is impressive: in the last two years, LINDT achieved the biggest market share gains in this segment. Meanwhile, the LAPIN OR has con- quered the retail shelves in France and become the undisputed leader in the area of hollow fig- ures, and a true chocolate symbol of Easter. It is therefore hardly surprising that LINDT TARGETED DISTRIBUTION POLICY now makes the biggest contribution in value terms and the second biggest in volume to the France was a forerunner of modern trade. In growth of the French chocolate market, which the seventies, a process of lasting revolution- is worth around EUR 2.1 billion . LINDT is the ary change began on the retail landscape. While fastest growing brand with the biggest market local corner shops continued to exist in other share gains in all chocolate segments. European countries alongside the rising self- service stores and smaller supermarkets – which One of the main aims of Lindt & Sprüngli is by no means served the whole existing terri- to take account everywhere of the expecta- tory – giant supermarkets and hypermarkets tions and needs of consumers. Apparently, the on the American model were already being LINDT Maîtres Chocolatiers are on the right built on the periphery of the big French towns. track with their carefully selected and innova- Responding to the gathering developmental tive creations because our efforts are reward- pace of consumer society, one new distribution 24|25 ed on a regular basis. Our “Petits Desserts” line of chocolate bars was declared “Saveur chain after another conquered the market. This development soon spread to other European A de l’ nnée” (Flavor of the Year) in 2004. This countries, starting with Germany. However, the award is made under the patronage of the inde- last decade has seen a massive concentration in pendent consumer association Monadia. And the retail landscape and this trend, too, began the die has already been cast for the year 2005, in France. Today, just five international and na- as once again LINDT has won the sought-after tional retail chains dominate 90% of the French award, but this time in two different categories market with 17 million square meters of retail – in the chocolate bar segment, with its “Noi- floor space. Of course, this development has sette Sensation,” and for pralinés, with its new enormous consequences for the manufacturers, “Les Rochers” PYRÉNÉENS recipe. who are confronted with increasingly severe pressure on their sales conditions. Lindt & Sprüngli was quick to respond at Alongside the key account managers, who are a very early stage to the new situation in France. based in Paris and maintain close relations with It established lasting good relations with the our retail partners, a great many field service modern trade as far back as 1974, and today the employees are constantly present on the sales French subsidiary achieves over 95% of its sales front under the leadership and coordination of with those same retailers. LINDT products are regional managers and safeguard a strong pres- on offer throughout the year in all distribution ence for the LINDT brand at the point of sale channels, with the exception of hard discount- through personal contacts with local branch ing. Of course, the present retail landscape has managers. become difficult terrain even for LINDT. This can only be handled by continuously adapting PARTNERSHIPS suitable approaches to the situation. From the outset, Lindt & Sprüngli has always placed em- It has always been important to understand and phasis on building up and maintaining its brand respect the interests of both parties from the name, on quality, on a high degree of innova- tion, and it has focused on deeper cooperation outset. Our aim is to offer the trade a product with rapid turnaround and fair terms. To achieve 26|27 with the trade in a spirit of partnership. For this that goal, Lindt & Sprüngli invests more and purpose, a strong, competent, and highly mo- more money each year both in advertising and tivated sales organization has been set up and in trade and consumer promotions. Original divided into geographical regions. concepts, outstanding recipes, fine packaging, and strong marketing support are designed to ensure that the whole LINDT assortment and many innovations are included as comprehen- sively as possible in our retail partners’ ranges. But we also want our products to have the most prominent position on the shelves, so that they are presented in the best possible light to con- sumers from the start. To achieve these goals, we pursue a unique LINDT – A BYWORD FOR SWISSNESS and sophisticated merchandising policy that AND PRESTIGE was developed in-house and is consistently pursued by the Lindt & Sprüngli field service The perception of LINDT as a premium suppli- employees. In order to further support our er has grown continuously in France in recent presence at the point of sale, we increase con- years. The brand is associated with important sumer attention to our products, especially on and reliable values such as Swiss tradition, qual- festive occasions such as Christmas and Easter, ity, know-how, passion, and elegance. In addi- through attractive displays. In this way, we tion, consumers appreciate the diversity and in- create LINDT worlds of experience that most novative character of the product range, which effectively and convincingly communicate the is constantly being renewed and extended. value of our brand and the premium character of our products. With a motivated and competent team, the French subsidiary Lindt & Sprüngli SA has 26|27 Rational implementation of all these measures creates a sound and forward-looking basis for gained recognition as the most innovative quality chocolate company in France – a coun- acquiring bigger market shares and continuing try with a long and superb culinary tradition, growth at Lindt & Sprüngli. At the same time, where savoir-vivre and quality of life play an it goes a long way toward enhancing brand important, indeed an overriding, role. awareness and further strengthening the excel- lent relations with our retail partners. 28|29 PREFACE GROUP STRUCTURE AND SHAREHOLDERS The Lindt & Sprüngli Group identifies strongly with efficient corporate governance. Both the Chocoladefabriken Lindt & Sprüngli AG is glo- Board of Directors and Group Management are bally active, developing, producing and selling committed to providing the shareholders, custo- chocolate products in the premium quality seg- mers and employees with a transparent and de- ment. The holding company, Chocoladefabriken tailed overview of the Lindt & Sprüngli Group. Lindt & Sprüngli AG, is listed on the Swiss Stock Our shareholders shall have full confidence that Exchange (SWX). The listing numbers of the re- their interests are strongly considered at all times. spective security can be found on page 59 of this Our business associates and customers shall be report. The market capitalization based on the able to rely on the company and the high quality 2004 year-end prices is CHF 3.6 billion. of our products, and our employees shall under- stand that they work for a company with a strong The company’s group structure is very lean and ethical culture. relies on two governing bodies, the Board of Di- rectors and Group Management. The two bodies have different responsibilities and functions. The individual markets, under their local management, have a broad autonomy, which ensures optimum performance close to the market. The scope of consolidation of Chocoladefabriken Lindt & Sprüngli AG includes the wholly-owned, privately held subsidiaries listed on the inside front cover of this Annual Report. Details about these companies, such as domicile, share capital, 30|31 participation, etc. can be found there as well. No company within the Group holds any invest- ments in publicly traded companies (see also “Principles of consolidation” on page 40 of this Annual Report). As of December 31, 2004, Chocoladefabriken Lindt & Sprüngli AG disclosed the following share- holders (in accordance with Art. 663c OR, Swiss Commercial Code) which own voting shares of more than 4%: • Fonds für Pensionsergänzungen der Chocoladefabriken Lindt & Sprüngli AG 22.3% • Arnhold and S. Bleichroeder Advisers, Investment Management, New York 5.4% Chocoladefabriken Lindt & Sprüngli AG does not hold cross interests, and there are no shareholder agreements or voting trusts. CAPITAL Restrictions and nominee entries Both registered shares and participation certifica- As of December 31, 2004, the holding company’s tes can be acquired without restrictions. However, capital structure was as follows: the Board of Directors may refuse full share- holder status to a buyer of registered shares if the Ordinary capital number of shares held by that buyer exceeds 4% The ordinary capital is composed of two types of of the total of registered shares as entered in the securities: commercial register. The Board of Directors may permit exceptions to this restriction. During the • Registered shares* CHF 14 000 000.– reporting year, the Board of Directors granted • Participation certificates** CHF 7 831 550.– such an exception for 22.3% of the voting rights to Total ordinary capital CHF 21 831 550.– Chocoladefabriken Lindt & Sprüngli AG’s “Fonds * 140 000 registered shares par value CHF 100.– für Pensionsergänzungen,” in light of the purpose ** 783 155 participation certificates par value CHF 10.– of this fund. The registered shares have voting rights; the par- Nominee entries will be granted full shareholder ticipation certificates have no voting rights. Both status for a maximum of 2% of the registered share types of shares are entitled to a dividend equiva- capital as entered in the commercial register. lent to their par values. All shares are fully paid. No bonus certificates (Genussscheine) were Options and convertible bonds issued. Options on Chocoladefabriken Lindt & Sprüngli AG are only outstanding within the scope of the exis- Authorized and conditional capital ting employee option plan. Details are reflected The conditional capital has a total of 507 070 in the table below. Details of the options issued 30|31 participation certificates with a par value of and the corresponding terms and conditions are CHF 10.–. Of this total, 152 620 are reserved for shown in the table below: employee stock option programs; the remaining Year of Number Exercise Maturity 354 450 participation certificates are reserved allocation price (CHF)* for capital market transactions. There is no other 1999 14 950 754.00 2006 authorized capital. 2000 18 460 758.60 2007 2001 18 638 833.00 2008 Changes in capital 2002 19 150 847.00 2009 During the past three reporting years, the follow- 2003 24 750 648.00 2010 ing changes have occurred in the ordinary and 2004 29 500 1 095.00 2011 conditional capital: *All options were issued at an exchange ratio of 1 option:1 participation certificate. Ordinary capital Conditional capital Year Registered Participation Participation certificates (PC) shares (RS)* certificates (PC)** “Capital market” “Employees” In 2004, a total of 4716 of the above employee 2002 140 000 775 775 354 450 100 000 options were exercised (total previous years: 2003 140 000 778 439 354 450 97 336 2664). Therefore, the “ordinary” participation 2004 140 000 783 155 354 450 152 620 capital was increased in 2004 by the correspond- Number of securities, status as at 31.12. ing reduction in the “conditional” participation * Registered shares: par value CHF 100.– capital reserved for the employee stock option ** Participation certificates: par value CHF 10.– programs. The 118 068 options outstanding as of December 31, 2004, and not yet exercised are equivalent to 5.4% of the total capital. There are no outstanding convertible bonds of Chocoladefabriken Lindt & Sprüngli AG. BOARD OF DIRECTORS Ernst Tanner (CH) Mr. Tanner was elected CEO and Vice-Chair- Role and function man by the Board of Directors in 1993. In 1994, The Board of Directors makes decisions jointly he took over as Chairman of the Board. The and, for specific matters, is assisted by the Com- Board is convinced that this dual mandate allows mittee of the Board. The Board’s primary function for effective leadership and excellent commun- is to provide guidance and exercise control over ication among shareholders, Board of Direc- the Group. The Board makes strategic decisions tors and Group Management. Before coming to and defines the general means for achieving the Lindt & Sprüngli, Mr. Tanner held for more than goals it has set for the Company. It sets the agen- 25 years top management positions with the Johnson da for the Annual Shareholders’ Meeting and ap- & Johnson Group in Europe and in the USA, his proves the annual and interim reports. Decisions last position having been “Company Group Chair- regarding the appointment of members to Group man Europe.” Mr. Tanner is also a member of the Management or of managing directors of subsi- Boards of Directors of Credit Suisse Group, and diaries as well as the nomination of the external Swatch Group. auditors for election at the Annual Shareholders’ Meeting are taken by the full board. Dr. Kurt Widmer (CH) Mr. Widmer has been a member of the Board of Members Directors since 1987. Mr. Widmer is a proven fi- As of December 31, 2004, the Board had six ac- nance and banking expert and was a member of tive members. Dr. Rudolph R. Sprüngli is Hono- the Executive Board of Schweizerische Kredit- rary Chairman and acts in a purely advisory ca- anstalt and Credit Suisse Holding. As president pacity, drawing on his many years of experience. of the Directorate-General between 1993 and Mr. Ernst Tanner (CEO) and Dott. Antonio 1995, Mr. Widmer was principally responsible for Bulgheroni (Chairman of the two Italian subsidia- the repositioning and the successful integration ries) are executive members of the Board. of Schweizerische Volksbank into Credit Suisse 32|33 Group. Name, Function 1st election Until Dr. Rudolph R. Sprüngli, Dr. Rudolf K. Sprüngli (CH) Honorary Chairman 1995 — Mr. Sprüngli has been a member of the Board Ernst Tanner, Chairman & CEO 1993 2005 of Directors since 1988. Due to his former exe- Dr. Kurt Widmer, Member 1987 2007 cutive and international activities for the Lindt Dr. Rudolf K. Sprüngli, Member 1988 2007 & Sprüngli Group, Mr. Sprüngli is considered an Dr. Franz Peter Oesch, Member 1991 2006 expert and authority in the chocolate business. Dr. Peter Baumberger, Member 1992 2006 Today, Mr. Sprüngli manages his own consulting Dott. Antonio Bulgheroni, Member 1996 2005 firm. In the past three years, the non-executive mem- Dr. Franz Peter Oesch (CH) bers of the Board were not actively engaged in the Mr. Oesch has been a member of the Board of management of the Group or in a group company Directors since 1991. Mr. Oesch is a partner of and none of them had business relations with any the law firm asg.advocati in St. Gallen and Chair- entity within the Group. man of the Board of Directors of the St. Galler Kantonalbank. The Board of Directors met four times during the reporting year. The members of the Board are elected by the shareholders for a term of three years, in stag- gered terms. Dr. Peter Baumberger (CH) Internal organization Mr. Baumberger has been a member of the Board The Board of Directors receives assistance from since 1992. He gained international experience the Committee of the Board. The Committee of in the licensing department of Westinghouse In- the Board is responsible for setting the total com- ternational in New York from 1950 through 1955 pensation of the members of Group Management and was responsible for South America at Olin and of the executive board members of the sub- Mathieson Corporation in New York from 1955 sidiaries. The Committee monitors the risk para- through 1959. Thereafter he was Vice President meters of the Group regarding investments, foreign and Managing Director at RCA Overseas in exchange, raw material coverage and liquidity. New York from 1960 through 1976. Between 1976 and 1991 Mr. Baumberger was the Delegate of The Committee meets at least four times per the Board of Directors of Carba Group in Bern. year, but may convene more often, depending on Mr. Baumberger is also member of the Boards needs. The Committee has the following members: of Directors of Swatch Group, and ABN-AMRO Mr. Tanner, Mr. Widmer, and Mr. Bulgheroni. Bank. Allocation of competences Dott. Antonio Bulgheroni (IT) The essential principles for allocating the compe- Mr. Bulgheroni has been a member of the Board tences and responsibilities among the Board of since 1996. Due to decades of gathering experience Directors and Group Management are set forth in in all management areas of chocolate production, the organization regulation. distribution and Italian retail trade, Mr. Bulghe- roni is an expert in the chocolate industry. He has Information and control been CEO and Chairman of the Italian subsidi- The Board is informed on a regular four-month ary Lindt & Sprüngli SpA since 1993, and since cycle about the Group’s income statement, bal- 32|33 1998, has been Chairman of Caffarel SpA. Mr. Bulgheroni holds other board positions with Banche ance sheet, investments and human resources as well as those of the subsidiaries, by means of Popolari Unite S.c.r.l., Banca Popolare Commer- a comprehensive and complete Management cio e Industria SpA, and Autogrill SpA. Information System (MIS). This information is available in both historical format and as year- end projection. Upon request, the same compre- hensive historical information can be provided to the Board members on a monthly basis. The full Board convened four times in 2004. A report on risk exposure, including securities and investments, foreign exchange, supply of raw ma- terials and liquidity, is submitted to the Committee of the Board on a quarterly basis. Upon request, this information is available on an ongoing basis. The Group has no internal audit department. Ac- cordingly, management information and risk con- trol reporting is given special attention. For the annual audit, special assignments are given to the external auditors. GROUP MANAGEMENT Ernst Tanner (CH) For details refer to “Board of Directors” on As of December 31, 2004, Chocoladefabriken page 32 of this Annual Report. Lindt & Sprüngli AG’s Group Management was comprised of four members. Hansjürg Klingler (CH) Lawyer. Mr. Klingler has been a member of Group Members Management since 1993 and is responsible for es- Name, Responsibility Since tablishing overseas and duty free markets. Pre- Ernst Tanner, viously, he was head of Legal and Administration, Chief Executive Officer 1993 and then deputy group head at Forbo, an inter- Hansjürg Klingler, national construction materials supplying Group. Duty Free & Country responsibility 1993 Uwe Sommer, Uwe Sommer (D) Marketing/Sales & Country responsibility 1993 Economist, MA. Mr. Sommer joined the Lindt Dr. Dieter Weisskopf, & Sprüngli Group in 1993 as a member of Group Chief Financial Officer, Management, responsible for Marketing and Sales Finance/Administration/ with country responsibilities. He gained his profes- Purchasing/Manufacturing 1995 sional experience as an executive in the marketing/ sales sector of Procter & Gamble and Mars in Germany and England, and as a CEO with John- son & Johnson in Austria. Dr. Dieter Weisskopf (CH) PhD in Economics/Business Administration. Mr. Weisskopf joined the Lindt & Sprüngli Group in 1995 as Head of Finance, Administration, and 34|35 Purchasing. Since 2004, he is also responsible for manufacturing. Starting his career at Swiss Union Bank, he gained additional experience in the bank- ing sector in Mexico and Brazil, later changing to the food industry, namely the Jacobs Suchard Group. At Jacobs Suchard and at Klaus Jacobs Holding, he held executive management positions in the financial sector, last as CFO, in Canada and Switzerland. Apart from the above-mentioned Board assign- ments of Mr. Tanner, the members of Group Ma- nagement are not active in other management or supervisory bodies. They are not active in mana- ging or consulting functions with closely related parties, nor do they hold public or political office. There are no noteworthy management agree- ments with either legal entities or natural persons outside the Group. COMPENSATION, EQUITY The non-executive members of the Board, the PARTICIPATIONS AND LOANS Honorary Chairman and closely related parties held – according to the share register of the com- Compensation and options pany – a total of 2660 registered shares on Decem- Compensation of the members of the Board of ber 31, 2004. Directors and of Group Management is based on comparative market studies of peers in simi- Together, the executive members of the Board and lar functions and with similar responsibilities. The Group Management held the following options on scope of compensation is determined by the Com- December 31, 2004 (holding period three to five mittee of the Board. years): Year of Number Exercise Maturity Option and bonus programs for members of allocation price (CHF)* Group Management are based on the perform- 1999 8 500 754.00 2006 ance of the company and the individual, in ac- 2000 9 500 758.60 2007 cordance with the objectives set for the year. This 2001 9 750 833.00 2008 profit-dependent part of the overall compensation 2002 7 250 847.00 2009 is a major factor in determining the level of the 2003 12 000 648.00 2010 program. Again, the Committee of the Board de- 2004 12 000 1 095.00 2011 cides on the general scope. * All options were issued at an exchange ratio of 1 option:1 participation certificate. Compensation of current and former members As of December 31, 2004, the non-executive of governing bodies members of the Board did not hold any options The total compensation paid to the two execu- on registered shares or participation certificates of tive members of the Board of Directors and to Chocoladefabriken Lindt & Sprüngli AG. 34|35 the additional three members of the Group Man- agement was CHF 7.3 million in 2004, the year Additional compensation, fees and loans under review. Total compensation and fees paidApart from the above-mentioned payments, no pa- in 2004 to the four non-executive members of the yments were made to either an executive or non- Board and the Honorary Chairman amounted to executive member of the Board or a member of CHF 0.6 million. Group Management. There are no loans, advanc- es or credits due to the Group or any of its sub- In 2004, no payments were made to former mem- sidiaries by any of the members of the Board or bers of governing bodies. Group Management. Shares and options Highest total compensation A total of 100 registered shares were allocated The total compensation of the highest paid Board to the executive members of the Board and to member amounted to CHF 3.0 million in the Group Management. No participation certificates reporting year. In addition, 100 registered shares, were allocated. blocked for one year and 5000 options on parti- cipation certificates in Chocoladefabriken Lindt The non-executive members of the Board did not & Sprüngli AG were granted under the terms and receive any shares or participation certificates. conditions described above. The executive members of the Board, the mem- bers of Group Management and closely related parties held – according to the share register of the company – a total of 2850 registered shares on December 31, 2004. SHAREHOLDERS’ RIGHTS Lifting statutory restrictions of voting rights OF PARTICIPATION Amendments to the statutes concerning proxy votes require a three-quarter majority of the votes Restriction of voting rights and proxy represented. When exercising the voting rights at the Annu- al Shareholders’ Meeting, no shareholder may The Annual Shareholders’ Meeting passes its combine, in the aggregate, directly or indirectly, resolutions by an absolute majority of the votes whether his own shares or those voted by proxy, represented, unless the statutes or the law pre- more than 6% of total voting shares. Natural per- scribe otherwise. sons or legal entities, which either by the number of shares or the pooling of votes are linked to each Amendments to the statutes with regard to other or are under common custody, are conside- a change in domicile, the transfer of shares, pro- red as one shareholder. The Board of Directors xies, as well as the dissolution or merger of the may refuse full shareholder status to a buyer of Company require a three-quarter majority of the shares if the number of shares held by that buyer votes represented. exceeds 4% of the total registered shares entered in the commercial register. Calling of the Annual Shareholders’ Meeting, agenda and share register In special cases, the Board may make exceptions to Shareholders are given notice by the Board of the voting rights restrictions. In the reporting year, the Directors at least 20 days prior to the date of the Board granted such an exception to the “Fonds für Annual Shareholders’ Meeting. Pensionsergänzungen der Chocoladefabriken Lindt & Sprüngli AG” for 22.3% of the voting rights, in Shareholder proposals to come before the Annual light of the purpose of the fund. Shareholders’ Meeting must be submitted to the company in writing no later than six weeks prior The restriction on voting rights does not apply to to calling the meeting. 36|37 representatives of organizations or to independent proxies or proxy votes designated by the company, Shares will be entered into the share register up to provided they are retained as proxy by the share- 20 days before the Annual Shareholders’ Meeting. holder. CHANGE IN CONTROL SHAREHOLDER INFORMATION AND DEFENSIVE MEASURES Chocoladefabriken Lindt & Sprüngli AG issues In the event of a change in control of the com- business related shareholder communications as pany, the employee options granted can be exer- follows: cised without regard to the three to five year hold- ing period. Other than that, there are no special • End of January Net sales of the previous year agreements concerning a change in control that • First half of March Full-year results would favor either the members of the Board of • End of April Annual Shareholders’ Meeting Directors or Group Management. • End of August Half-year report The statutes of incorporation make no special pro- For details refer to «Information» on page 61. vision for “opting out” or “opting up” pursuant to BEHG Art. 22. The statutory location of publication is the Swiss Official Gazette of Commerce (Schweizerisches AUDITORS Handelsamtsblatt). In addition, information about the company is usually published and collected by The Annual Shareholders’ Meeting first appoint- the Swiss and international media and by leading ed PricewaterhouseCoopers AG as its auditors international banks. in April 2002. Therefore, 2004 is the third year of service for the auditors. In 2004, Pricewaterhouse- All company information is also available on the Coopers AG charged audit fees in the amount internet under “Investor Relations” at the Website of TCHF 837. Additional fee payments for audit www.lindt.com. Both the annual and the interim related services and other services totalled TCHF reports can be obtained in hardcopy and free of 36|37 386, and TCHF 75, respectively. charge at the Group’s head office. For further infor- mation contact the investor relations department, Supervision, control over and evaluation of the phone +41 44 716 25 37 . external auditor’s performance is exercised by the Board of Directors. 38|39 LINDT & SPRÜNGLI GROUP Notes to the Consolidated Financial Statements BASIS OF THE CONSOLIDATED Goodwill FINANCIAL STATEMENTS When first consolidated, the assets and liabilities of a subsidiary are valued according to uniform The consolidated financial statements are based Group principles. Any residual goodwill after this on the annual accounts of the individual Group revaluation is written off directly against share- companies which were drawn up in accordance holders’ equity. with uniform Group accounting principles. The consolidated financial statements conform with Foreign currency translation Swiss GAAP FER as well as with the reporting At the end of the financial year, the balance and listing rules of the Swiss Stock Exchange. sheets and income statements of foreign subsi- diaries are converted to Swiss francs at year-end PRINCIPLES OF CONSOLIDATION rates and the average exchange rates, respectively. The resulting currency translation differences are Consolidated subsidiaries directly added to or deducted from consolidation The consolidated financial statements of the Lindt reserves in the balance sheet. & Sprüngli Group comprise Chocoladefabriken Lindt & Sprüngli AG, Kilchberg, as well as all VALUATION PRINCIPLES subsidiaries in which the Lindt & Sprüngli Group, directly or indirectly, holds more than 50% of the Intangible assets share capital and voting rights. The most impor- The item intangible assets includes acquired licenses, tant participations are listed on the front flap of trademarks and similar rights. Such assets are stated this report. In compliance with the full consolida- at procurement cost and amortized over a period of tion method, the assets, liabilities, income and ex- ten years. penses of these companies are fully incorporated (100%) into the consolidated financial statements. Fixed assets Intercompany accounts receivables and payables These items are stated at manufacturing or pro- 40|41 as well as intercompany income and expense items curement cost less depreciation. Depreciation is are eliminated. Intercompany profits included in calculated according to the straightline method inventories from deliveries to Group companies over the following useful lives: have been eliminated. Years Land and buildings 0–40 Non-consolidated participations Machinery 10–15 Such interests are shown in the balance sheet Other fixed assets 3–8 under “Financial assets” and are reported in the consolidated financial statements according to Land is not depreciated. Buildings are depreci- the equity method. The Group does not currently ated over a period of 40 years, whereas building- own any interests of this kind. related installations are depreciated over a period of 15 to 20 years. Included in other fixed assets Capital consolidation are EDP items, office furniture and vehicles. Investments in subsidiaries are consolidated according to the purchase method. Fixed assets are regularly subject to impairment tests. If the book value of an asset exceeds its re- coverable amount (i.e. the higher of an asset’s net selling price and its value in use), then the asset is written down to its recoverable amount. LINDT & SPRÜNGLI GROUP Leased assets Securities Fixed assets acquired under long-term financial This item mainly contains marketable securities leases are carried and depreciated in the same which are valued at market. way as other fixed assets. The cash values of these leasing commitments are capitalized and reported Deferred taxes under liabilities in the balance sheet. Provisions are set aside for the difference between book value and tax value. With the exception of Financial assets land value adjustments in conjunction with acqui- Financial assets include loans which mature after sitions, the liability is based on current local tax twelve months; they are reported at face value. rates applied to all temporary differences. Further, this position contains non-consolidated participations which are valued on the basis of Provisions pro-rata equity according to the equity method. Provisions cover both actual and potential risks and obligations, taking into account the risks Derivative financial instruments to which an internationally active Group is ex- The Group uses derivative financial instruments posed. to hedge operational risks related to raw material prices, foreign exchange and interest rates. For- Current liabilities wards are the most commonly employed instru- All liabilities under this item are due within one ments. Hedging transactions are valued in accord- year or less. The respective amounts are reported ance with the underlying transaction. The same at face value. valuation method is employed when anticipated transactions are hedged. Pension obligations The Group operates a number of different pension 40|41 Inventories schemes, which have been set up in accordance Inventories are stated at average procurement or with the statutory requirements of the various manufacturing cost. They are valued according countries involved. In the case of defined contri- to the lower of cost or market principle. Appro- bution pension plans, the expenditure for the pe- priate value adjustments are made for items with riod corresponds to the contributions paid by the reduced saleability and for surplus inventories. employer, whereas in the case of defined benefit pension plans, the expenditure for the period is Accounts receivables determined by actuarial assessments made every Trade and other accounts receivables are posted three years based on the projected unit credit at face value less operationally necessary value method. This expectancy value method takes into adjustments. account not only the existing pensions and rights already acquired, but as well anticipated future salary and pension increases. LINDT & SPRÜNGLI GROUP Consolidated Balance Sheet before Profit Distribution December 31, 2004 December 31, 2003 Note CHF million % CHF million % ASSETS Land and buildings 280.0 292.9 Machinery, equipment, vehicles 242.6 240.5 Construction in progress 28.6 13.5 Net fixed assets 551.2 32.2 546.9 34.3 Intangible assets 0.9 0.0 1.4 0.1 Financial assets 1.8 0.1 1.8 0.1 Total Fixed Assets 4 553.9 32.3 550.1 34.5 Inventories 5 271.1 15.8 251.1 15.8 Accounts receivables 6 567.0 514.4 Other receivables 8 47.6 43.7 Accrued income 14.1 20.0 Total receivables 628.7 36.7 578.1 36.3 Marketable securities 27.9 1.6 59.3 3.7 Cash 232.4 13.6 153.7 9.7 Total Current Assets 1 160.1 67.7 1 042.2 65.5 Total Assets 1 714.0 100.0 1 592.3 100.0 LIABILITIES AND SHAREHOLDERS’ EQUITY Share and participation capital 21.8 21.8 Treasury stock –2.1 0.0 Consolidated reserves Currency translation 866.8 –56.0 741.5 –34.6 42|43 Total Shareholders’ Equity 3 830.5 48.5 728.7 45.8 Bonds 10 100.0 200.0 Loans 8.7 10.3 Provisions 7 172.8 172.3 Long-term Liabilities 281.5 16.4 382.6 24.0 Accounts payable to suppliers 139.2 119.2 Other accounts payable 9 75.1 69.2 Accrued liabilities 244.6 228.9 Bank and other borrowings 10 143.1 63.7 Current Liabilities 602.0 35.1 481.0 30.2 Total Liabilities 883.5 51.5 863.6 54.2 Total Liabilities and Shareholders’ Equity 1 714.0 100.0 1 592.3 100.0 LINDT & SPRÜNGLI GROUP Consolidated Income Statement 2004 2003 Note CHF million % CHF million % INCOME Sales 11 2 016.6 100.0 1 800.5 100.0 Changes in inventories 26.3 12.4 Other operating income 12 8.9 8.8 Total Income 2 051.8 101.7 1 821.7 101.2 OPERATING EXPENSES Material costs –594.4 –29.5 –525.6 –29.2 Personnel costs 13 –451.5 –22.4 –413.7 –23.0 Operating, marketing, distribution and administrative expenses –707.3 –35.0 –617.2 –34.3 Total Operating Expenses –1 753.2 –86.9 –1 556.5 –86.5 EBITDA 298.6 14.8 265.2 14.7 Depreciation and amortization –79.2 –3.9 –76.5 –4.2 EBIT 219.4 10.9 188.7 10.5 Interest and financial expenses –14.1 –21.5 Interest and financial income 10.8 15.2 Operating profit after interest 216.1 10.7 182.4 10.1 Extraordinary expenses –0.4 –2.8 Income before taxes 215.7 10.7 179.6 10.0 Taxes 14 –64.5 –57.2 42|43 NET INCOME 151.2 7.5 122.4 6.8 CASH FLOW 234.5 11.6 206.2 11.5 LINDT & SPRÜNGLI GROUP Consolidated Cash Flow Statement 2004 2003 CHF million CHF million CHF million CHF million Net income 151.2 122.4 Depreciation and amortization 79.2 76.5 Changes in provisions and value adjustments 5.7 –1.1 Non cash effective items –1.6 8.4 Cash Flow 234.5 206.2 Decrease (+) / Increase (–) of inventories –29.1 –23.9 Decrease (+) / Increase (–) of accounts receivables –62.8 –57.7 Decrease (+) / Increase (–) of other receivables –4.3 –3.5 Decrease (+) / Increase (–) of prepaid expenses 10.4 –3.8 Decrease (–) / Increase (+) of accounts payable to suppliers 23.1 19.6 Decrease (–) / Increase (+) of other accounts payable 6.6 8.4 Decrease (–) / Increase (+) of accrued liabilities 20.4 –35.7 32.8 –28.1 Cash Flow from Operating Activities 198.8 178.1 Investments in property, plant and equipment –99.0 –75.1 Disposals of property, plant and equipment 0.7 1.9 Decrease (+) / Increase (–) of financial assets 0.0 0.2 Cash Flow from Investment Activities –98.3 –73.0 Decrease (–) / Increase (+) bank and other borrowings –19.9 –94.7 Decrease (–) / Increase (+) of bonds/loans –0.9 –1.4 Goodwill payment Capital increase (including premium) 0.0 3.5 –4.5 2.0 44|45 Treasury stock –2.1 0.0 Profit distribution –31.0 –24.4 Cash Flow from Financing Activities –50.4 –123.0 Translation Adjustments –2.8 2.1 Changes in Cash and Securities 47.3 –15.8 Cash and securities as at January 1 213.0 228.8 Cash and securities as at December 31 260.3 213.0 LINDT & SPRÜNGLI GROUP Notes to the Financial Statements 2004 1. Exchange rates The following exchange rates were used to translate the foreign currencies: Balance sheet, year-end rates Income statement, average rates CHF 2004 2003 2004 2003 Euro-Zone 1 EUR 1.54 1.56 1.55 1.52 USA 1 USD 1.13 1.24 1.23 1.34 Great Britain 1 GBP 2.18 2.21 2.27 2.20 Canada 1 CAD 0.94 0.96 0.96 0.97 Australia 1 AUD 0.88 0.93 0.92 0.88 Poland 100 PLZ 38.15 33.02 34.58 34.32 2. Changes in the scope of consolidation The scope of consolidation is unchanged since last year. 3. Shareholders’ equity The Group’s equity developed as follows: Share-/PC- Treasury stock Consolidated Currency Shareholders’ CHF million capital reserves translation equity Balance as at 1.1.2003 21.8 0.0 646.0 –58.9 608.9 Net income 2003 122.4 122.4 44|45 Capital increase Distribution of profits 0.026 2.0 –24.4 2.0 –24.4 Goodwill offset –4.5 –4.5 Currency translation 24.3 24.3 Balance as at 31.12.2003 21.8 0.0 741.5 –34.6 728.7 Introduction FER 23 1.6 1.6 Net income 2004 151.2 151.2 Capital increase 0.047 3.5 3.5 Treasury stock –2.1 –2.1 Distribution of profits –31.0 –31.0 Currency translation –21.4 –21.4 Balance as at 31.12.2004 21.8 –2.1 866.8 –56.0 830.5 With the introduction of Swiss GAAP FER 23, pro- for 2004 would be CHF 150.3 million (CHF 121.5 visions as at 1.1.2004, has been reduced by CHF 1.6 million in 2003). Details of the capital increase and million and offset against shareholders‘ equity. If purchase of treasury stock are presented in the goodwill had been capitalized and amortized over Notes to the Financial Statements of Chocolade- a period of five years, shareholders’ equity as at fabriken Lindt & Sprüngli AG. The structure of December 31, 2004, would amount to CHF 833.2 ordinary capital is described on page 31 in the million (CHF 732.3 million in 2003) and net income Corporate Governance section. LINDT & SPRÜNGLI GROUP 4. Changes in fixed assets Property, plant and equipment Land Machinery Other Construction TOTAL CHF million Buildings fixed assets in progress Acquisition costs as at 1.1.2004 477.6 637.0 160.6 13.5 1 288.7 Additions 15.8 39.7 18.3 25.2 99.0 Retirements –0.3 –7. 8 –11.0 0.0 –19.1 Transfers 1.0 6.7 1.4 –9.1 0.0 Currency translation –11.8 –12.4 –3.5 –1.0 –28.7 Acquisition costs as at 31.12.2004 482.3 663.2 165.8 28.6 1 339.9 Accumulated depreciation as at 1.1.2004 184.7 432.0 125.1 0.0 741.8 Additions 19.0 37.1 16.7 0.0 72.8 Impairments 3.1 2.0 0.8 0.0 5.9 Retirements –0.3 –7.7 –10.4 0.0 –18.4 Transfers 0.0 0.0 0.0 0.0 0.0 Currency translation –4.2 –6.7 –2.5 0.0 –13.4 Accumulated depreciation as at 31.12.2004 202.3 456.7 129.7 0.0 788.7 Net fixed assets 31.12.2004 280.0 206.5 36.1 28.6 551.2 Net fixed assets 31.12.2003 292.9 205.0 35.5 13.5 546.9 Included in the position construction in progress Financial assets are advance payments of CHF 2.4 million (CHF CHF million 2004 2003 5.7 million in 2003). Balance as at 1.1. 1.8 2.0 Additions 0.9 0.3 The insurance value of the fixed assets amounts to CHF 1734.5 million (CHF 1624.6 million in 2003). Amortization Retirements 0.0 –0.9 –0.1 –0.5 46|47 No mortgages exist on land and buildings. Currency translation 0.0 0.1 Balance as at 31.12. 1.8 1.8 The impairment charge of CHF 5.9 million con- sists mainly of writedowns of fixed assets in own 5. Inventories stores (CHF 3.4 million) and production equip- ment (CHF 2.1 million). CHF million 2004 2003 Raw materials 26.9 30.2 Neither capitalized assets, under financial lease, Packaging materials 50.9 47.8 nor lease liabilities existed at December 31, 2004 Semi-finished and or December 31, 2003, respectively. Operating finished products 207.4 186.3 lease commitments are expensed immediately. Other materials 4.1 3.2 Value adjustment –18.2 –16.4 Intangible assets Total 271.1 251.1 CHF million 2004 2003 Balance as at 1. 1. 1.4 2.6 6. Accounts receivables Amortization –0.5 –0.8 Retirements 0.0 –0.4 CHF million 2004 2003 Balance as at 31. 12. 0.9 Accounts receivables 1.4 580.3 527.4 Allowance for doubtful accounts –13.3 –13.0 Intangible assets are composed mostly of capital- Total 567.0 514.4 ized bond issue costs. LINDT & SPRÜNGLI GROUP 7. Provisions Pension Plan Deferred taxes Other TOTAL CHF million Provisions as at 1.1.2004 91.7 35.4 45.2 172.3 Introduction FER 23 0.0 –3.9 2.3 –1.6 Addition 12.4 3.4 3.8 19.6 Utilization –9.0 –2.9 –1.1 –13.0 Release 0.0 –0.5 –1.3 –1.8 Transfers 2.1 0.0 –2.1 0.0 Currency translation –0.8 0.3 –2.2 –2.7 Provisions as at 31.12.2004 96.4 31.8 44.6 172.8 Provisions included in Pension Plan mainly are 10. Bonds amounts owed to pension funds and similar per- sonnel welfare instruments maintained by the The following bonds were outstanding as at German and Italian Group companies. December 31: CHF million 2004 2003 Deferred tax liabilities have not been provided for Chocoladefabriken Lindt & Sprüngli AG, Switzerland land value adjustments of CHF 2.9 million (CHF 3% Bond, 1998 – 2005 100.0 100.0 2.3 million in 2003) realized from acquisitions. 3 5/8 % Bond, 1998 – 2008 100.0 100.0 Losses brought forward in the amount of CHF Total 200.0 200.0 49.3 million (CHF 53.3 million in 2003), which are available for future use, also exist with a number The 3% bond, expiring on March 31, 2005, is 46|47 of foreign companies. For precautionary reasons, no deferred tax assets have been considered in the reported on the line, Bank and other borrowings. The reported figure of CHF 96.7 million, includes balance sheet. bonds totalling CHF 3.3 million held by Chocola- defabriken Lindt & Sprüngli AG. Other provisions comprise provisions for known business risks at the balance sheet date. 11. Sales 2004 2003 Sales by region CHF million % CHF million % 8. Other receivables Europe 1 479.4 73.4 1 312.9 72.9 CHF million 2004 2003 North and Advance payments 0.7 1.8 South America 433.9 21.5 407.0 22.6 Other receivables 46.9 41.9 Other countries 103.3 5.1 80.6 4.5 Total 47.6 43.7 Total 2 016.6 100.0 1 800.5 100.0 Other receivables mostly comprise amounts due The currency adjusted increase in sales (internal from governmental institutions. growth) versus 2003 is 12.5%. 9. Other accounts payable 12. Other operating income Other accounts payable include provisions for taxes Other operating income includes an amount of amounting to CHF 17.2 million (CHF 20.7 million CHF 0.5 million (CHF 0.7 million in 2003) for com- in 2003). pany-produced additions involving investments in fixed assets. The remainder is composed of income from services related to operating activities. LINDT & SPRÜNGLI GROUP 13. Personnel expenses 16. Pension obligations CHF million 2004 2003 The status of the defined benefit pension obligation Wages and salaries 327.8 307.7 is as follows: Social benefits 92.4 80.7 Other personnel expenses 31.3 25.3 CHF million 2004 2003 Total Obligations of 451.5 413.7 defined benefit plans 297.1 286.9 For the year 2004, the Group employed an ave- Market value of the assets available rage of 6293 people (6011 in 2003). to cover pension commitments –227.1 –219.4 Under-coverage –6.5 –5.3 14. Taxes Total plan liabilities as shown in the balance sheet 63.5 62.2 CHF million 2004 2003 Current income tax expense 61.8 64.2 The pension commitments were last calculated as Deferred tax income 0.0 –5.3 of January 1, 2003, and carried forward to Other tax expense/income 2.7 –1.7 December 31, 2004. As of December 31, 2004, Total 64.5 57.2 the actuarial under-coverage of CHF 6.5 million (CHF 5.3 million in 2003) was within the permitted 15. Off-balance-sheet transactions corridor (FER 16) of 10% and must not be recog- nized in the income statement. Contingent liabilities CHF million 2004 2003 Actuarial calculations were based on the following Discounted bills 16.5 16.7 weighted average assumptions: Guarantees in favor of third parties 0.3 Total 16.8 0.2 Discount rate 16.9 2004 4.4% 2003 4.4% 48|49 Expected return on plan assets 5.0% 5.0% Future payments related to operational leasing Expected salary increase 2.5% 2.5% commitments are as follows: Expected pension increase 1.2% 1.2% Operational leasing The expenses for defined benefit and defined con- CHF million 2004 2003 tribution plans were CHF 9.2 million (CHF 8.1 mil- 1–5 years 50.5 50.0 lion in 2003) for the financial year 2004. > 5 years 15.8 21.3 Total 66.3 71.3 In addition, there are employers’ funds with net as- sets of ca. CHF 429 million per December 31, 2004 Derivative financial instruments (ca. CHF 251 million per December 31, 2003). Contract values Non-capitalized CHF million replacement values There are no employer contribution reserves either positive negative for defined benefit or for defined contribution pen- Total as at 31.12.2004 281.8 13.5 6.4 sion plans. Total as at 31.12.2003 502.4 24.7 2.9 There are no obligations arising out of past employ- Derivative financial instruments consist mostly of ment relationships that are not covered by provi- currency forwards, swaps and commodity forwards. sions. LINDT & SPRÜNGLI GROUP Report of the Group Auditors To the Annual Shareholders’ Meeting Our audit was conducted in accordance with of Chocoladefabriken Lindt & Sprüngli AG, auditing standards promulgated by the Swiss pro- Kilchberg fession, which require that an audit be planned and performed to obtain reasonable assurance As auditors of the Group, we have audited the about whether the consolidated financial state- consolidated financial statements (balance sheet, ments are free from material misstatement. We income statement, cash flow statement and have examined on a test basis evidence supporting notes/pages 40 to 48) of Chocoladefabriken Lindt the amounts and disclosures in the consolidated & Sprüngli AG for the year ended December 31, financial statements. We have also assessed the 2004. accounting principles used, significant estimates made and the overall consolidated financial state- These consolidated financial statements are the ment presentation. We believe that our audit pro- responsibility of the Board of Directors. Our re- vides a reasonable basis for our opinion. sponsibility is to express an opinion on these con- solidated financial statements based on our audit. In our opinion, the consolidated financial state- We confirm that we meet the legal requirements ments give a true and fair view of the financial concerning professional qualification and inde- position, the results of operations and the cash pendence. flows in accordance with the Swiss GAAP FER and comply with Swiss law. We recommend that the consolidated financial statements submitted to you be approved. 48|49 PricewaterhouseCoopers AG Peter Binz Daniel Ketterer Zurich, March 10, 2005 50|51 CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG Balance Sheet before Profit Distribution December 31, 2004 December 31, 2003 Note CHF 1 000 CHF 1 000 ASSETS Intangible assets 42 265 42 744 Investments 322 538 322 538 Loans to subsidiaries 58 576 84 154 Total Fixed Assets 423 379 449 436 Receivables from subsidiaries 193 057 118 058 Other receivables 2 230 1 875 Miscellaneous financial investments 7 172 4 625 Treasury stock, participation certificates and bonds 5 382 3 294 Cash and cash equivalents 73 606 59 514 Accrued income 165 107 Total Current Assets 281 612 187 473 Total Assets 704 991 636 909 LIABILITIES AND SHAREHOLDERS’ EQUITY Share capital 14 000 14 000 Participation capital 11 7 832 7 784 Legal reserves 81 514 78 003 Special reserves 152 263 127 349 Reserves for participation certificates 2 085 0 Net earnings 115 953 72 413 52|53 Total Shareholders’ Equity 373 647 299 549 Bond 6 100 000 200,000 Provisions 3 799 2 906 Accounts payable to subsidiaries 122 196 128 272 Bond (expiring on June 30, 2005) 6 100 000 0 Other liabilities 127 100 Accrued liabilities 5 222 6 082 Total Liabilities 331 344 337 360 Total Liabilities and Shareholders’ Equity 704 991 636 909 CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG Income Statement 2004 2003 CHF 1 000 CHF 1 000 INCOME Dividends and other income from subsidiaries 114 398 69 578 Income from financial assets 3 275 7 711 Interest received from subsidiaries 6 065 8 012 Other income 33 67 Total Income 123 771 85 368 EXPENSES Administrative and miscellaneous overhead costs 6 627 4 363 Interest 11 915 14 488 Taxes 3 695 4 210 Total Expenses 22 237 23 061 NET INCOME 101 534 62 307 NET EARNINGS Net earnings as at January 1 72 413 40 520 Dividend –30 514 –23 934 Emoluments to directors –480 –480 Allocation to special reserves –27 000 –6 000 52|53 Net income 101 534 62 307 Net Earnings as at December 31 115 953 72 413 CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG Notes to the Financial Statements as at December 31, 2004 1. Liabilities arising from guarantees and pledges 5. Liabilities due to welfare schemes in favor of third parties The company does not have any outstanding ac- Contingent liabilities as at December 31, 2004, counts payable to welfare schemes. amounted to CHF 1.5 million (CHF 12.2 million in 2003). This figure comprises guarantees to third 6. Bonds parties for subsidiaries. CHF million 2. Assets pledged or assigned 3% Bond, 1998–2005 100.0 35/8 % Bond, 1998–2008 100.0 There were no pledged or assigned assets as at Total 200.0 December 31, 2004. As of December 31, 2004, Chocoladefabriken 3. Leasing liabilities Lindt & Sprüngli AG held own bonds totalling CHF 3.3 million. These bonds are reported in Cur- The company has no leasing liabilities. rent Assets. 4. Fire insurance values 7. Significant investments The company does not own fixed assets. The most important participations are listed on the front flap of this report. 54|55 CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG 8. Dissolution of undisclosed reserves 11. Conditional and approved capital No undisclosed reserves were dissolved during As of December 31, 2004, the conditional capital 2004 that would have had any significant effect on had a total of 507 070 participation certificates the results. with a par value of CHF 10.–. Of this total, 152 620 are reserved for employee stock option programs 9. Revaluations and the remaining 354 450 for capital market transactions. In the year under review, a total of No revaluations which exceed acquisition costs 4716 employee stock options were exercised at an were recognized. average price of CHF 765.42. 10. Acquisition and sale of treasury stock 12. Mandatory disclosure of interest positions and participation certificates pursuant to OR Art. 663c Inventory of treasury stock As of December 31, 2004, Chocoladefabriken and participation certificates RS PC Lindt & Sprüngli AG disclosed the following Inventory as at 1.1.2004 0 0 shareholders (in accordance with Art. 663c OR, Additions 2004 0 1 611 Swiss Commercial Code) which own voting shares Retirements 2004 0 0 of more than 4%: Inventory as at 31.12.2004 0 1 611 Average cost of additions – CHF 1 295 • Fonds für Pensionsergänzungen der Average sales price Chocoladefabriken Lindt & Sprüngli AG 22.3% of disposals – – • Arnhold and S. Bleichroeder Advisers, 54|55 Investment Management, New York 5.4% CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG Proposal for the Distribution of Net Earnings December 31, 2004 December 31, 2003 CHF CHF Balance brought forward 14 418 970 10 106 927 Net income 101 533 545 62 306 570 NET EARNINGS 115 952 515 72 413 497 5% statutory dividend –1 091 578 a) –1 089 805 b) 175% (135 % in 2003) additional dividend on the dividend-bearing shares and participation certificates of CHF 21 831 550 (CHF 21 784 390 in 2003) –38 205 213 a) –29 424 722 b) Emoluments to directors –480 000 –480 000 Allocation to special reserves –60 000 000 –27 000 000 BALANCE CARRIED FORWARD 16 175 724 14 418 970 a) Number of registered shares and participation certificates, status as at December 31, 2004: During the period, January 1 to May 3, 2005 (date of the dividend distribution), the number of dividend-bearing participation certificates can change as a result of options, granted through the employee option plan, being exercised. b) As a result of participation-certificate options, granted through the employee option plan, being exercised during the period January 1 to May 4, 2004 (date of the dividendend distribution), the actual dividend distribution was CHF 16 380.– higher than 56|57 that announced and approved at the Annual Shareholders‘ Meeting held on April 29, 2004. CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG Report of the Statutory Auditors Our audit was conducted in accordance with To the Annual Shareholders’ Meeting auditing standards promulgated by the Swiss pro- of Chocoladefabriken Lindt & Sprüngli AG, fession, which require that an audit be planned Kilchberg and performed to obtain reasonable assurance about whether the financial statements are free As statutory auditors, we have audited the account- from material misstatement. We have examined ing records and the financial statements (balance on a test basis evidence supporting the amounts sheet, income statement and notes/pages 52 to 56) and disclosures in the financial statements. We of Chocoladefabriken Lindt & Sprüngli AG for the have also assessed the accounting principles used, year ended December 31, 2004. significant estimates made and the overall finan- cial statement presentation. We believe that our These financial statements are the responsibility audit provides a reasonable basis for our opinion. of the Board of Directors. Our responsibility is to express an opinion on these financial statements In our opinion, the accounting records and finan- based on our audit. We confirm that we meet the cial statements and the proposed appropriation of legal requirements concerning professional quali- available earnings comply with Swiss law and the fication and independence. company’s articles of incorporation. We recommend that the financial statements sub- mitted to you be approved. 56|57 PricewaterhouseCoopers AG Peter Binz Daniel Ketterer Zurich, March 10, 2005 Group Financial Data – 5-Year Review 2004 2003 2002 2001 2000 Income Statement Consolidated sales CHF million 2 016.6 1 800.5 1 680.5 1 590.8 1 536.9 EBITDA CHF million 298.6 265.2 242.4 230.8 215.4 in % of consolidated sales % 14.8 14.7 14.4 14.5 14.0 EBIT CHF million 219.4 188.7 170.8 158.4 143.8 in % of consolidated sales % 10.9 10.5 10.2 10.0 9.4 Net income CHF million 151.2 122.4 101.9 91.5 76.2 in % of consolidated sales % 7.5 6.8 6.1 5.8 5.0 in % of average shareholders’ equity % 19.4 18.3 17.8 17.7 15.9 Cash flow CHF million 234.5 206.2 178.3 175.2 144.2 in % of consolidated sales % 11.6 11.5 10.6 11.0 9.4 Depreciation and amortization CHF million 79.2 76.5 71.6 72.4 71.6 Balance Sheet Total assets CHF million 1 714.0 1 592.3 1 492.1 1 500.2 1 469.3 Current assets CHF million 1 160.1 1 042.2 940.0 915.0 877.4 Net current assets CHF million 558.1 561.2 436.6 339.5 364.7 Fixed assets CHF million 553.9 550.1 552.1 585.2 591.9 in % of total assets % 32.3 34.5 37.0 39.0 40.3 Long-term liabilities CHF million 281.5 382.6 379.8 386.1 458.7 in % of total assets % 16.4 24.0 25.5 25.7 31.2 Shareholders’ equity CHF million 830.5 728.7 608.9 538.6 497.9 in % of total assets % 48.5 45.8 40.8 35.9 33.9 Investments in fixed assets CHF million 99.0 75.1 77.6 72.2 73.6 in % of cash flow % 42.2 36.4 43.5 41.2 51.0 58|59 Employees Average number of employees 6 293 6 011 6 029 6 068 5 871 Sales per employee CHF 1 000 320.4 299.5 278.7 262.2 261.8 Data per Share – 5-Year Review 2004 2003 2002 2001 2000 Shares Number of registered shares at CHF 100.– par 1) 140 000 140 000 140 000 140 000 140 000 Number of participation certificates at CHF 10.– par 2) 783 155 778 439 775 775 775 775 775 775 Earnings per share/10 PC CHF 693 562 468 421 350 Cash flow per share/10 PC CHF 1 074 947 819 805 663 Shareholders’ equity per share/10 PC 3) CHF 3 804 3 345 2 799 2 475 2 288 Payout ratio % 26.0 24.9 23.5 21.4 22.8 Registered share Year-end price CHF 16 650 11 050 8 600 9 400 9 650 High of the year CHF 16 650 11 475 10 000 10 200 10 090 Low of the year CHF 10 975 6 800 7 800 7 980 7 600 Dividend CHF 180.00 4) 140.00 110.00 90.00 80.00 P/E ratio 5) Factor 24.03 19.66 18.38 22.33 27.57 Participation certificate Year-end price CHF 1 618 1 030 800 930 930 High of the year CHF 1 630 1 065 960 1 010 960 Low of the year CHF 990 631 730 775 731 Dividend CHF 18.00 4) 14.00 11.00 9.00 8.00 P/E ratio 5) Factor 23.35 18.33 17.09 22.09 26.51 Market capitalization 5) CHF million 3 598.1 2 348.8 1 824.6 2 037.5 2 072.5 in % of shareholders’ equity 3) % 433.3 322.3 299.7 378.3 416.2 1) Valor 1 057 075 58|59 2) Valor 1 057 076 3) Year-end shareholders’ equity 4) Proposal of the Board of Directors 5) Based on the year-end prices of registered shares and participation certificates Group Addresses Lindt & Sprüngli Chocoladefabriken Lindt & Sprüngli (Schweiz) AG Lindt & Sprüngli (Canada) Inc. Seestrasse 204, CH-8802 Kilchberg 525 University Avenue, Suite 1030, Phone (+41) 44-716 22 33, Fax (+41) 44-715 39 85 Toronto, Ontario M5G 2L3, Canada Phone (+1) 416-351 85 66, Fax (+1) 416-351 85 07 Chocoladefabriken Lindt & Sprüngli GmbH Süsterfeldstrasse 130, DE-52072 Aachen Lindt y Sprüngli (España) SA Phone (+49) 241-8881 0, Fax (+49) 241-8881 211 Av. Diagonal 420, ES-08037 Barcelona Phone (+34) 93-459 02 00, Fax (+34) 93-459 47 52 Lindt & Sprüngli SA 5, bd. de la Madeleine, FR-75001 Paris Lindt & Sprüngli (Poland) Sp. z o.o. Phone (+33) 1-58 62 36 36, Fax (+33) 1-58 62 36 00 ul. Jakuba Kubickiego 5, PL-02-954 Warszawa Phone (+48) 22-642 28 29, Fax (+48) 22-842 86 58 Lindt & Sprüngli SpA Via Buccari 33, IT-21056 Induno Olona Lindt & Sprüngli (Asia-Pacific) Ltd. Phone (+39) 0332-20 91 11, Fax (+39) 0332-20 35 05 8/F Wong Chung Ming Commercial House, 16 Wyndham Street, Central, Hong Kong, China Lindt & Sprüngli (Austria) Ges.m.b.H. Phone (+852) 25 26 58 29, Fax (+852) 28 10 59 71 Hebbelplatz 5, AT-l100 Wien Phone (+43) 1-60 18 20, Fax (+43) 1-60 18 28 00 Lindt & Sprüngli (Australia) Pty. Ltd. , Level 7 299 Elizabeth Street, Lindt & Sprüngli (USA) Inc. Sydney, NSW 2000, Australia One Fine Chocolate Place, Stratham, Phone (+61) 2-82 68 00 00, Fax (+61) 2-92 83 72 65 NH 03885-0276, USA Phone (+1) 603-778 81 00, Fax (+1) 603-778 31 02 Caffarel SpA Via Gianavello 41, IT-10062 Luserna S. Giovanni Lindt & Sprüngli (UK) Ltd. Phone (+39) 0121-958 111, Fax (+39) 0121-901 853 Stockley Road, West Drayton, Middlesex, UB7 9BG, Great Britain Ghirardelli Chocolate Company Phone (+44) 189-544 58 21, Fax (+44) 189-544 20 23 1111-139th Avenue, San Leandro, CA 94578-2631, USA Phone (+1) 510-483 69 70, Fax (+1) 510-297 26 49 60|61 Realization: Peter Bütikofer & Company AG, Zurich; Design: Tricom AG, Zurich Photos: Martin Schmitter; Print: Neidhart + Schön AG, Zurich Paper: chlorine free Information Agenda April 28, 2005 107th Annual Shareholders’ Meeting May 3, 2005 Payment of Dividend August 23, 2005 Half-year report 2005 January 24, 2006 Net sales 2005 March 14, 2006 Full-year results 2005 April 20, 2006 108th Annual Shareholders’ Meeting Investor Relations Chocoladefabriken Lindt & Sprüngli AG Dr. Dieter Weisskopf, Chief Financial Officer Seestrasse 204 CH-8802 Kilchberg Phone +41 44 716 23 99 Fax +41 44 716 26 60 Internet www.lindt.com 60|61 CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG SEESTRASSE 204, CH-8802 KILCHBERG SCHWEIZ/SWITZERLAND WWW.LINDT.COM