2004 - lindt-spruengli.com · caffarel spa luserna s. giovanni, italy share capital: eur 2.2...

CHOCOLADEFABRIKENLINDT & SPRÜNGLI AG

SEESTRASSE 204, CH-8802 KILCHBERGSCHWEIZ/SWITZERLAND

WWW.LINDT.COM

2004

Chocoladefabriken Lindt & Sprüngli AGKilchberg, SwitzerlandShare capital: CHF 14 000 000, PC capital: CHF 7 831 550

Lindt & Sprüngli (International) AGKilchberg, SwitzerlandShare capital: CHF 0.2 million, Participation: 100%

Chocoladefabriken Lindt & Sprüngli (Schweiz) AGKilchberg, SwitzerlandShare capital: CHF 10 million, Participation: 100%

Chocoladefabriken Lindt & Sprüngli GmbHAachen, GermanyShare capital: EUR 15.5 million, Participation: 100%

Lindt & Sprüngli SAParis, FranceShare capital: EUR 13 million, Participation: 100%

Lindt & Sprüngli SpAInduno Olona, ItalyShare capital: EUR 5.2 million, Participation: 100%

Lindt & Sprüngli (Austria) Ges.m.b.H.Vienna, AustriaShare capital: EUR 4.5 million, Participation: 100%

Lindt & Sprüngli (USA) Inc.Stratham NH, USAShare capital: USD 1 million, Participation: 100%

Lindt & Sprüngli (UK) Ltd.West Drayton, Great BritainShare capital: GBP 1.5 million, Participation: 100%

Lindt & Sprüngli (Canada) Inc.Toronto, CanadaShare capital: CAD 2.8 million, Participation: 100%

Lindt y Sprüngli (España) SABarcelona, SpainShare capital: EUR 3 million, Participation: 100%

Lindt & Sprüngli (Poland) Sp. z o.o.Warsaw, PolandShare capital: PLZ 1.3 million, Participation: 100%

Lindt & Sprüngli (Asia-Pacific) Ltd.Hong Kong, ChinaShare capital: HKD 0.5 million, Participation: 100%

Lindt & Sprüngli (Australia) Pty. Ltd.Sydney, AustraliaShare capital: AUD 1 million, Participation: 100%

Caffarel SpALuserna S. Giovanni, ItalyShare capital: EUR 2.2 million, Participation: 100%

Ghirardelli Chocolate CompanySan Leandro, CA, USAShare capital: USD 0.1 million, Participation: 100%

Lindt & Sprüngli Financière AGKilchberg, SwitzerlandShare capital: CHF 5 million, Participation: 100%

Lindt & Sprüngli (Finance) Ltd.St. Peter Port, GuernseyShare capital: EUR 0.05 million, Participation: 100%

The Lindt & Sprüngli Group

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


Investor Relations

Chocoladefabriken Lindt & Sprüngli AGDr. Dieter Weisskopf, Chief Financial OfficerSeestrasse 204CH-8802 KilchbergPhone +41 44 716 23 99Fax +41 44 716 26 60

Internet

www.lindt.com

Information

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Honorary Chairman

Dr. Rudolph R. Sprüngli

Board of Directors Term expires Spring

Ernst Tanner 2005Chairman and CEO

Dr. Kurt Widmer 2007

Dr. Rudolf K. Sprüngli 2007

Dr. Franz Peter Oesch 2006

Dr. Peter F. Baumberger 2006

Dott. Antonio Bulgheroni 2005

Group Management

Ernst TannerChairman of the Board and CEO

Uwe SommerDirectorMarketing/Sales Country responsibilities

Hansjürg KlinglerDirectorDuty FreeCountry responsibilities

Dr. Dieter WeisskopfDirectorFinance/Administration/Purchasing/Manufacturing

Key Financial Data of the Lindt & Sprüngli Group

2004 2003 Change

Income Statement in %

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


Net income CHF million 151.2 122.4 23.5


Cash flow CHF million 234.5 206.2 13.7


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


Long-term liabilities CHF million 281.5 382.6 –26.4


Shareholders’ equity CHF million 830.5 728.7 14.0


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

Chairman’s ReportBusiness Review 2004Lindt & Sprüngli in FranceCorporate GovernanceFinancial Report of the Lindt & Sprüngli GroupNotes to the Consolidated Financial StatementsReport of the Group AuditorsFinancial Report of Chocoladefabriken Lindt & Sprüngli AG (Holding Company)Proposal for Distribution of Net EarningsReport of the Statutory Auditors5-Year ReviewGroup Addresses Lindt & Sprüngli

This Annual Report is also available in German, which is the legally binding text.

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182838404950

56575860

107th Annual Shareholders’ Meeting Thursday, April 28, 2005, at 10 a.m. Kongresshaus Zurich, Kongresssaal Entrance K, Claridenstrasse, Zurich

2004

DEAR SHAREHOLDER

Lindt & Sprüngli is pleased to report both re-cord sales and profi ts in 2004. For the fi rst time in the 159-year history of our company, sales surpassed the two billion Swiss-franc mark. Our growth increased by a multiple of that of the overall market and the group profi t once again showed double-digit progress. All subsi-diaries contributed to this success as a result of substantial progress in every product category. Accordingly, we were able to continue strength-ening our position in every important market and on a broad front, thus creating an excellent foundation for the future development of our group.

Organic growth of 12.5% in local currency is the highest increase ever recorded. This fi ne result was even achieved in countries where chocolate consumption grew at the low rate of 1.5 to 4%. The slightly lower growth in Swiss francs of 12% to 2.016 billion Swiss francs is explained by the weakened dollar. Compared to the previous year, operating earnings before interest (EBIT) rose by 16.3% to 219.4 mil-lion Swiss francs, outperforming sales growth. The group’s net income improved even more strongly, with a gain of 23.5% to 151.2 million Swiss francs, representing a return on sales of 7.5% (6.8% in the previous year). Cash fl ow climbed by 13.7% to 234.5 million Swiss francs. On December 31, 2004, the equity ratio stood at 48.5%, while the average return on equity was 19.4%. Thanks to the excellent earnings, opti-mal cost management, and ongoing effi ciency increases in every sector of the business, Lindt & Sprüngli was able to become debt free in the year under review.

Given these results, the Board of Directors will be proposing a 28.6 % increase in dividends to 180.– Swiss francs per registered share and 18.– Swiss francs per participation certifi cate at the forthcoming Shareholders’ Meeting on April 28, 2005.

More than being just a dependable dividend source, Lindt & Sprüngli shares are a veri-table stock market star. From the annual low on January 20, 2004 (closing price: 10,975 Swiss francs), the registered shares listed on the Swiss Exchange SWX shot up to an annual high of 16,650 Swiss francs on the year’s last day of trad-ing. In the year under review, our shares gained about 50%. The participation certifi cates even gained 57%, while the overall market in Swit-zerland (measured by the Swiss Performance Index) rose just 6.9%. Many market commen-tators emphasized the sustainable innovation (product range and marketing) and effective cost management at Lindt & Sprüngli. It will be no surprise, then, that recent reviews rank Lindt & Sprüngli third among all Swiss equities in a 30-year performance comparison. Our shares continue to be regarded by both pri-vate and institutional investors as a strong and safe stock. For the past twelve years our shares and participation certifi cates have shown a yearly increase in value at an aver-age of 15%. The Lindt & Sprüngli participa-tion certifi cates are now also listed in the new Mid-Cap-Index SMIM of the SWX.

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This index is comprised of the 30 biggest Mid-Cap stocks on the Swiss equity market with the greatest liquidity that are not already repre-sented in the SMI. With a market capitalization of 3.6 billion Swiss francs at the end of 2004, Lindt & Sprüngli is one of the 50 largest and most valuable Swiss companies, having gained still further ground in the year under review. In the area of brand valuation, LINDT has been ranked in the 14th position, thus being one of the Swiss brands with the highest added value. Domestically and abroad, constant progress in brand awareness is evident from year to year.

The results of the past fi nancial year were achieved in a yet highly volatile environment. The political situation in the Ivory Coast still does not seem to be under control, while the availability and costs of various raw materi-als, such as hazelnuts, still suffered from the effects of the 2003 summer heat wave. Under the infl uence of the persistently weak dollar and sharply rising oil prices, economic growth forecasts were revised downwards in some in-dustrial countries, including Switzerland, to-wards the end of 2004. In several European countries, strikes were called against company closures and reforms which had a dampening effect on consumer mood. In this market envi-ronment, the “hard discounters” gained ground, a sales channel in which our products are only available on a limited scale, if at all.

Despite these market conditions, Lindt & Sprüngli managed to achieve the highest organic growth in the company’s history. There are a number of reasons for this performance, foremost among them being our company tra-dition founded on quality, know-how, and the passion of our more than 6000 employees. Since the early days nearly 160 years ago, we have been permanently committed to the high-est quality standards. In recent years, we have continued to develop and expand the premium segment, advancing ever closer to the ultimate taste experience with a wide range of products, such as the EXCELLENCE line of chocolate bars. The fact that we have interpreted the signs of the times correctly with this deliberate focus, and by the same token satisfi ed our consumers’ expectations, is also refl ected in the current dis-cussion over the growing tendency to “trading up” from quantity to quality. The trend on the part of consumers to prefer high quality and more expensive products is becoming increas-ingly apparent. The products purchased carry a brand symbol of higher quality, better taste, lifestyle and “well-being,” and contribute as well to the general aspiration to enjoy the “good things in life.” Consumers are increas-ing their demand for prestigious top products, which amounts to making a personal statement in favor of high quality of life. Quality, trust, and product innovations are playing an increasingly 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.

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Every innovation begins with a question, and that question is founded on consumer research. The extent to which we study consumers’ wish-es and expectations is apparent from our an-nually rising investment in systematic research concerning consumer habits, from which our group has derived valuable information in re-cent years. Targeted and consistent efforts to maintain the premium image of the LINDT brand are certainly one of the most demanding tasks faced by the marketing experts at Lindt & Sprüngli. The outcome of our efforts is that, today, LINDT brand awareness is increasing all over the world. We intend to strengthen this position consistently and ensure that our name remains present in the minds of every chocolate lover. The trend towards growing familiarity with the brand and its values is measured each year, and the progress achieved is extremely en-couraging.

Lindt & Sprüngli also maintains high values in its personnel policy: stability, continuity, basic and advanced training, and safety are of the essence to us. We place value on a motivating and fair working climate. We know that pro-found know-how, years of experience, and our employees’ identifi cation with our products, our brand, and our company, is the basis for Lindt & Sprüngli’s continuing prosperity.

We are proud of being able to maintain a high level of stability among our staff in a fast-mov-ing and often impersonal environment. We are fi rmly convinced that we can only achieve our high quality standards by inspiring confi dence in the permanence of our values – because, in the fi nal analysis, quality always depends on the people’s commitment to excellence. On behalf of the Board of Directors and group Manage-ment, I want to thank all our staff for their dedi-cated and motivated efforts. Our thanks also go to our consumers. The continuous growth in the sales of LINDT products and the rising market shares we are able to achieve in all markets are proof that more and more people are treating themselves or others with LINDT specialties, with increasing frequency. We must maintain and even accentuate this trend. Our thanks also go, of course, to our trading partners and suppli-ers, without whom our success would be impos-sible. At the same time, we owe a debt of grati-tude to our shareholders, whose confi dence has enabled our company to remain so prosperous.

OUTLOOK

In recent months, consumer attitude has re-mained on a relatively constant level and there are no indications of substantial change in the 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 TannerChairman of the Board of Directors and Chief Executive Offi cer

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MARKETS

The consumer mood brightened a bit with the onset of economic recovery. The fi rst signs of a rallying tourism industry also proved to be a boon to the chocolate market. After the losses suffered during the exceptional summer heat wave of 2003, chocolate business rose again in the summer of 2004 – thanks to moderate tem-peratures, which generally tend to encourage chocolate consumption.

In the Swiss retail sector, the trend towards consolidation, observable in recent years, con-tinued. One large retailer moved quickly, con-verting newly acquired department stores into proprietary outlets. Another major chocolate sales channel also changed hands, leading to a drastic reduction in the number of retail outlets. An announcement by German hard discounters of their intention to penetrate the Swiss market gave rise to a lively debate about Switzerland as a “highprice island.” This last development intensifi ed price competition be-tween the sales channels to an unprecedented degree.

In this somewhat volatile environment, Choco-ladefabriken Lindt & Sprüngli (Schweiz) AG reported sales of CHF 216.9 million (previous year CHF 192.7 million); this is equivalent to an impressive growth of 12.6%. The fact, that LINDT is not only doing well in its export busi-ness, but is also growing again in the Swiss do-mestic market, is particularly pleasing. A great number of product innovations have been en-couraging growth. These include “Les Grandes,” a new line of 150 g premium chocolate bars in three versions, with a particularly high content of hazelnut or almond for a completely new taste experience. The EXCELLENCE range has been extended to include several dark va-rieties, with a very high cocoa content and new seasonal recipes, such as “Caffè Latte” and “Croquant de Caramel.” The classic CHOCO-LETTI line was completed in the fall to include a milk recipe that is proving very popular with children. Following the successful “Petits Des-serts” pralinés, three new fi lled bars with des-sert recipes were added to the assortment. LINDOR went on to consolidate its market leadership with assorted packs, a new “Straccia-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.

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The fall saw a major relaunch of the LINDT classic assorted pralinés. This move had been in preparation for two years with careful atten-tion to every detail and many steps were taken to support it. Almost all the different pralinés are now being offered with new recipes, new shapes, and new fi llings, and are presented in prestigious new packaging as “Connaisseurs” and “Pralinés du Confi seur.” More than ever before, they are now a prominent ambassador of Swiss chocolate culture at home and abroad. This relaunch was supported by an advertising campaign and additional marketing measures.

Prominent among the promotional activities was the “Gourmet Festival,” involving 130 LINDT Maîtres Chocolatiers: during the most extensive tasting campaign Switzerland has ever seen, they travelled throughout the coun-try for three days to present their fi ne creations and their passion for LINDT to consumers.

Several projects for investments in production lines and equipment were initiated at the Kilch-berg plant and are due for implementation dur-ing 2005. These activities are being undertaken to increase capacity effi ciency.

The German domestic demand has been fl at for three years now, despite growing exports and the cyclical economic recovery. While con-sumers have been unsettled by the prolonged debate over reforms and rising unemployment, private consumption has remained depressed. Despite this trend, development of the choco-late market proved favorable, displaying satis-factory growth due to the rather cool summer and a variety of innovations. Although LINDT is deliberately absent from the particularly price aggressive hard discount segment, Chocolade-fabriken Lindt & Sprüngli GmbH nevertheless grew faster than the market, with sales up by a strong 8% at EUR 255.6 million (previous year EUR 236.6 million).

Thanks mainly to the EXCELLENCE line, the chocolate bar segment recorded double-digit growth. With the great success of the dark EXCELLENCE varieties, LINDT has become the leader in the dark chocolate market. The introduction of new varieties was also helped along with TV advertising. In the fi lled bars seg-ment, the successful launch of the new dessert bars, with their doublelayer fi lling, added fur-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

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GOLD BUNNY in a dark chocolate version and the GOLD BUNNY egg. A superb Advent calendar for loving couples and the magnifi -cent new “Schatz der Zaren” (Treasures of the Czars) theme, with highly decorative packaging and fi ne Russian recipes, were the outstanding innovations for Christmas business. There was an increase in productivity, while at the same time investments were also made to expand production capacity.

Although unemployment in France remained high, the economy did gain some ground. Growth was due primarily to exports and ris-ing private spending. Following years of stag-nant fi gures, the chocolate market registered the positive effects of a rise in per capita con-sumption. The value of the overall market rose by 3% and the volume by 1.5%. This upward trend was driven primarily by the large volume of newly launched products, higher spending on advertising and promotion, and favorable climatic conditions in the summer.

France’s retail scene experienced a tough year with increasingly aggressive discounters and massive pressure on prices. Most retail chains and producers fell in line with the government’s pressure for price cuts. However, as an acknowl-edged premium supplier, Lindt & Sprüngli was able to maintain its prices while remaining one of the few brands to achieve strong growth. This led to an improved partnership with the trade and strengthened the profi le of established retailers against the hard discounters in the chocolate segment. The willingness of French consumers to pay somewhat higher prices for premium quality is clearly growing. Due to the fact, that consumers are demanding more and more creative and original products, innovation – one of LINDT’s great strengths – is becoming increasingly important.

Lindt & Sprüngli France SA improved last year’s high growth rate once again by an excel-lent 15.8% to reach EUR 242.5 million. Mar-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” fi lled 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.

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Growth in the Easter and Christmas business reached double-digit rates; Easter sales in par-ticular rose strongly, not least thanks to the success of the GOLD BUNNY. Among the assorted pralinés, it was the newly launched “Petites Merveilles” that contributed to LINDT’s market leadership. The PYRÉNÉENS “Rocher” proved to be one of the most success-ful new launches of recent years. The “Festival des Saveurs,” now a fi rmly established tradition, plus increasing point of sales activities in the retail trade allowed LINDT to gain new con-sumers and demonstrate the expertise of the LINDT Maîtres Chocolatiers.

The trend in the Italian economy was typifi ed above all by rising exports with no improvement of the consumer sentiment in the country. The latest surveys show that private consumption of food products remains more or less stable af-ter ten years of growth. Consumer confi dence 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.

The two Lindt & Sprüngli subsidiaries in Italy together achieved sales worth a total of EUR 208 million, which is equivalent to a pleasing growth rate of 5.6%. Lindt & Sprüngli SpA improved its sales by 6.1%, hence grow-ing faster than the market. This was especially true for the chocolate bar segment, with the EXCELLENCE and the classic 100 g bar range, as well as the LINDOR truffl es. In anticipation of gaining an even larger share of the growing Easter business, LINDT is expanding its ca-pacities in this segment to include ever more attractive new festive offerings. Particularly successful lines during Easter 2004 were the big “Rocher” and LINDOR Easter eggs and the GOLD BUNNY. Progress was achieved in all product groups, both in the traditional specialty trade and in the modern distribution channels, which continue to grow.

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With an impressive and highly creative product range for the spring-summer and fall-winter seasons, and the unusually attractive Christ-mas and Easter collections – sold exclusively through specialty outlets – Caffarel SpA grew by 4.6%. New product categories, such as “Mar-rons Glacés” and “Panettoni,” reinforced and expanded the strong partnership with these tra-ditional sales channels. Thanks to the popular big Easter eggs and the prestigious “Colomba,” Easter business proved particularly positive. The new “Dolcetti” line of pastry articles with the Caffarel seal met with an enthusiastic re-sponse from consumers. Thanks to the open-ing up of new markets, the export business also improved with double-digit growth as did the business-to-business segment.

The Austrian chocolate market grew slightly over the previous year against a background of a generally fl at food trade. In Austria, the mar-ket environment is dominated by two major trade partners and an aggressive expansion by hard discounters, which exert strong pres-sure on prices. Despite this backdrop Lindt & 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 truffl e” concept from LINDT, “Goldener Herbst” (Golden Fall) by HOFBAUER, and the new “Modern Orange” umbrellas by KÜFFERLE.

The continuing trend towards dark chocolate also helped the EXCELLENCE bar line, with its new recipes, to achieve signifi cant market success, hence leading the LINDT brand to the number two position in the bar segment.

In Spain, per capita chocolate consumption, rather weak until now, moved closer to the European average in the year 2004, with double-digit growth rates. Development of the overall market was once again easily outstripped by Lindt y Sprüngli (España) SA, with a strong 16.5% rise that represents a further signifi cant gain in market share. With consistent focus on the successful LINDOR line and targeted mar-keting measures, LINDT was able to fi rm up its position as the fastest growing brand in the praliné segment for the second year in a row. The EXCELLENCE range took over market leadership in the dark chocolate bar area, while fi lled bars reinforced their leadership position with new products, recipes, and formats, espe-cially the 150 g bar. The Easter business with a 50% growth rate, driven foremost by the GOLD BUNNY, towered above all.

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The British chocolate market advanced with 5% growth last year. This progress was largely sus-tained by the Easter and Christmas business, while the premium chocolate segment grew sig-nifi cantly faster than the market as a whole. In this highly competitive chocolate market, the second largest in Europe, Lindt & Sprüngli (UK) Ltd. has continuously achieved double-digit growth in recent years. But it was even more dynamic in 2004 with 31% higher sales. In the premium seg-ment, LINDT established itself as the major part-ner for three big retail chains. Once again, growth was driven primarily by the LINDOR line and the GOLD BUNNY. The EXCELLENCE bar line also achieved double-digit growth in this hotly contested market segment.

After years of horizontal movement, the Polish chocolate market as a whole reported strong growth. This positive development – which brought much keener competition – was driven largely by the rapidly expanding modern re-tail trade, especially the department store seg-ment. But signs of incipient consolidation could already be seen. Lindt & Sprüngli (Poland) Sp. z o.o achieved noteworthy success with the LINDOR line, thus reinforcing its position. Latest market research shows still great po-tential for LINDOR. The Easter business also proved highly positive with double-digit growth throughout the assortment.

LINDT’s activities in the regions of Central and Eastern Europe, Scandinavia, and the Benelux countries remained positive. Almost all of these countries contributed to the extraordinary growth of 57.7%. In Sweden, Lindt & Sprüngli has taken specifi c measures to benefi t even more effectively from the good local market poten-tial. As a result, sales doubled and the market position was greatly improved. Performance in the Russian, Bulgarian, Czech, and Hungarian markets also appear to be highly promising.

While the political agenda in the United States was dominated by the war in Iraq and the Presidential election, the economy benefi ted from the long-awaited upturn. Parallel to that, sustained improvement of consumer attitude could be observed. In the retail trade, the posi-tive long-term trend towards greater innovation and higher quality benefi ted both LINDT and GHIRARDELLI. There was little movement on the chocolate market, but the growing po-pularity of premium products did favor the growth of the two Lindt & Sprüngli US sub-sidiaries, which together reported sales worth USD 285.8 million, equivalent to a substantial 13.9% growth rate.

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With sales up 21.5%, Lindt & Sprüngli (USA) Inc. once again reported a record result. This un-interrupted positive development was boosted in equal measure by constant progress in whole-sale, where LINDT was the fastest-growing chocolate brand and won signifi cant market shares, and by the LINDT chain of boutiques. In a trade environment that was diffi cult for specialty retailers overall, the LINDT shops achieved their best growth so far for compa-rable stores, with a total of 93 permanent and 23 seasonal sales outlets. A very promising start was made by the boutique that was launched with a new design concept in a shopping mall in Massachusetts. LINDT achieved its biggest sales gains with its exceptionally successful EXCELLENCE range of chocolate bars, with the LINDOR truffl es, which have now become a classic in the US, and with the seasonal trade, where demand for the fi nest Swiss premium chocolate by LINDT is particularly strong.

The second US subsidiary, Ghirardelli Choco-late Company, also reported an excellent year with 9.1% growth. Sales of GHIRARDELLI SQUARES, which were supported for the fi rst 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 fl at market, GHIRARDELLI “baking chocolate” grew strongly and improved its market share. Thanks to the recovery of US tourism, as well as innovative products and

highly effective marketing activities, the retail division – with 13 stores in cities such as San Francisco, Orlando, Chicago, Miami Beach, and other attractive locations – reported its best year yet with double-digit growth rates.

Canada’s economy was back on track with solid growth last year and consumers were in an opti-mistic mood. The chocolate market also ad-vanced by 4%. Thanks to a reinforced presence in the highly concentrated retail trade – espe-cially for the seasonal peaks – LINDT brand awareness has now reached a very high level of 95%. This greatly helped in driving up sales of the omnipresent EXCELLENCE chocolate bar line and LINDOR truffl es. With strong growth of 16.5%, Lindt & Sprüngli (Canada) Inc. won a signifi cantly higher share of the overall Canadian chocolate market. For chocolate bars, LINDT moved ahead to second place. Christ-mas and Easter business proved particularly good: in Canada, too, the GOLD BUNNY has already become a cult.

The longest phase of economic growth in Australia’s history continued unabated, bring-ing consumer confi dence to its highest level in ten years. Last year, the chocolate market also expanded by 2% although there were few in-novations to fi nd in the boxed chocolate seg-ment. This left plenty of scope for the premium suppliers. Lindt & Sprüngli (Australia) Pty. Ltd. achieved an impressive 34.3% sales growth and remained the market leader by a wide margin in the premium chocolate segment, making it the fastest growing chocolate brand. In the assorted praliné range and the Easter business, excellent results were reported. Implementing a new store concept, the fi rst LINDT Café was opened with big success in November 2004 in Sydney. After a few months in operation, this new concept looks to be highly promising in Australia.

In Africa and the Near and Middle East, the polit-ical situation remained tense, especially in Israel 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.

In the world’s most dynamic economic region, Lindt & Sprüngli (Asia-Pacifi c) Ltd. achieved double-digit growth. Development in the key markets of China, Hong Kong, and Japan was particularly positive, even if the level re-mains relatively modest. In these regions, too, the emphasis was placed on EXCELLENCE and LINDOR. SWISS THINS, whose assort-ment was extended to include “Mocha Milk,” were also particularly important in Asia. After a lengthy break, LINDOR is again being sup-ported by television advertising in Hong Kong.

Despite the economic and political environ-ment, which remains diffi cult, sales in South America also reported double-digit growth over the previous year. The main contributors to this were the launch of EXCELLENCE 85% and EXCELLENCE “Orange Intense,” together with the classical 100 g bars and as-sorted pralinés.

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Following an extremely diffi cult year in 2003, which was hit hard by the war in Iraq and SARS, the situation gradually settled down in the year under review. The duty-free/travel retail busi-ness benefi ted from this positive trend. Two new packaging versions of the popular Napolitain “Carrier Boxes” and the relaunch of a mocha variation of SWISS THINS, brought LINDT substantial sales and market share growth. The opening of a chocolate boutique, led by “Nuance,” at the new Airside Center at Zurich Airport promises great success. This new con-cept strengthens the presence of the LINDT brand at this important airport and makes sure that numerous travellers will carry the prestige, tradition, and quality of LINDT Swiss choco-late with them all over the world.

PROCUREMENT

In the fi rst half of the year 2004, cocoa prices fell steadily, though they picked up again sharply in July and August following adverse weather fore-casts. In September, prices were already easing 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 signifi cantly 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

raw material side because worldwide butter consumption exceeded powder consumption. Consequently, the price of cocoa butter rose continuously. The overall assumption is that prices will increase slightly, especially because the situation in the Ivory Coast remains now as before uncertain.

After four turbulent years with high price volatility, the situation on the vanilla market has stabilized again. A degree of consistency is expected for the immediate future in terms of both quantities and quality. Forecasts suggest that prices will revert to a normal level. The al-ready high prices for hazelnuts, and even more so for almonds, rose further last year due to strongly increasing demand, low harvests, and a severely restrictive selling tactic on the part of the producers. Sugar prices fell slightly, now that the important producer Brazil has been continuously increasing supply for fi ve years. A contrary development was observed for milk powder, where falling supply and rising demand have been forcing prices up since early 2004.

EMPLOYMENT AND STAFF

In its last fi nancial year, the Lindt & Sprüngli group employed an average of 6293 employees on a fulltime basis (6011 in the previous year).

The fi rst global employee survey was made in the fall of 2004. Eight of the 13 group compa-nies took part. The participation rate was an outstanding 81%, refl ecting the interest, motiva-tion, and identifi cation employees feel with the company and its product. Signifi cant strengths were singled out as being the nature of the jobs themselves, the emphasis on quality, the good working conditions and, last but not least, the confi dence staff has in management – which is also refl ected in the above-average job satisfac-tion. In subsequent phases, these results will be analyzed across the board and project groups 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-fi ed 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 offi cers but also create valuable

synergies. The Swiss subsidiary company Choco-ladefabriken Lindt & Sprüngli (Schweiz) AG is a good example of the versatile efforts made in the area of ecology and sustainability.

One principle of the Lindt & Sprüngli credo is literally: “Our intention is to interact carefully and conscientiously with the environment and the communities in which we live and work.” Lindt & Sprüngli has been actively expressing its corporate conviction in this principle since 1996 with its participation in a pilot project led by the Energie-Agentur der Wirtschaft (Energy Agency for the Economy) in support of volun-tary sustainable climate protection. The proj-ect’s objective is a range of individual measures that will result in the sustainable reduction of electricity, gas, and oil consumption throughout the business.

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A number of companies based along Lake Zurich have voluntarily agreed upon environ-mental protection goals, with the aim of achiev-ing or even surpassing them at the earliest opportunity. To this end, these companies are exchanging ideas on a regular basis and sharing the positive experience in different sectors.

Lindt & Sprüngli’s success in this area is mea-surable. Compared to the initial fi gure in the year 1996, 19% more output is being derived today from the same volume of energy, while simultaneously emitting 18% less CO2. The var-ious individual measures taken to achieve en-ergy savings include the improved insulation of windows, roofs, and facades, the optimization of stirring machine operation, a better separation between heating and cooling zones, and con-trolled switch-off for both lights and ventilation. 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.

The next steps towards a sustainable commit-ment to the environment have already been de-fi ned. The plan for 2005 is to generate heating and hot water as far as possible by using waste heat from the production plant, instead of burn-ing gas and oil for this purpose. To achieve this goal, the second plant in Altendorf on Lake Zurich is being equipped with powerful heat pumps.

In Switzerland, efforts to promote the eco-nomical use of energy resources in the years 2003 and 2004, won the Energy Agency for the Economy’s certifi cate for voluntary climate protection. As is the case in Switzerland, con-stant efforts and investments are being made in all the other Lindt & Sprüngli production com-panies in pursuit of a conscientious and sustain-able environmental policy.

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In France, the EU country with the largest land mass (547 000 km2) and the second largest population (just over 60 million people), intel-lectual and cultural values are united in a way that is virtually unparalleled anywhere else in the world. French history has had a lasting infl u-ence in many respects, far beyond the confi nes of Europe. One outstanding example of this is the French Revolution of 1789. The principle of Liberty, Equality, Fraternity led on to the Decla-ration of Human Rights, which is regarded today as the most important principle underpinning most legal systems. Shortly afterwards, in 1804, the thinking behind the French Revolution was embodied in the “Code Napoléon,” the French civil code, much of which remains in force to-day. This code, which went on to infl uence other legal systems beyond the borders of France, can surely be regarded as one of the most important heritages of the French Revolution.

The infl uence of France throughout the world is so deeply rooted that Benjamin Franklin (1706–1790), one of the leading fi gures behind American independence, declared: “Everyone has two nations and one of them is France.”

France has a Mediterranean and an Atlan-tic seaboard. This geographical situation led long ago to an active cultural and commercial exchange across the oceans and laid the basis for many pioneering innovations in the most varied spheres of human life. It is hardly sur-prising, then, that France was home to so many outstanding fi gures, philosophers, writers, art-ists, and scientists. These include Marie Curie, who in 1903 was the fi rst woman, along with her husband Pierre, to win the Nobel Prize for physics. In 1911, she won this honor a second time, for chemistry. France also has more win-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 sides of life as well have always been appreci-ated. Its many culinary traditions have survived down the centuries and are celebrated today in people’s homes or in restaurants and inns. France is famous all over the world for the art of excellent cuisine and enjoyment of life. Creativ-ity and savoir-faire have reached new heights in products like wine and cheese. General Charles de Gaulle is once said to have commented hu-morously: “How can we be expected to govern a nation that has a different variety of cheese for every day of the year?” The German expres-sion “Eating like God in France” certainly did not come about by chance; eating and drinking have always been of the utmost importance to the French.

CHOCOLATE – A ROYAL TRADITION

Chocolate reached France in 1615, when the Spanish Princess Anna of Austria married the French King Louis XIII. At that time, it was still an exclusive beverage reserved for the Spanish royals and nobility. Sometime around 1800, solid chocolate was being made, but as in Switzerland, industrialization of the chocolate industry did not begin until the second half of the 19th century. With the advent of automation, the “democratization” of chocolate began also in France, making it an affordable and therefore widely consumed confectionery product. Today, the French chocolate industry is highly con-centrated, a fact that is refl ected in an equally 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.

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LINDT IN FRANCE – A STORY

WITH ARISTOCRATIC ROOTS

It may be that Rodolphe Lindt had already export-ed his famous Chocolat Surfi n – the fi rst softly melting chocolate in the world – to France. Be that as it may, France was not a very important ex-port market for Lindt & Sprüngli in the early days. It was not until a decade after the Second World War that the decisive step toward future development took place. In 1954, a license agreement was signed between Lindt & Sprüngli and Chocolat Rozan SA of Oloron Ste Marie, near Pau. In that same year, production of LINDT chocolate began in the foothills of the Pyrenees.

The owner of a small power plant in Oloron Ste Marie, Count Maurice Rozan de Mazilly founded Chocolat Rozan SA in 1921. Access to low-cost energy and readily available seasonal labor were probably decisive reasons for build-ing the plant in Oloron Ste Marie, which was way off the beaten track of French industry.

Six years later, Rozan developed the PYRÉNÉENS praliné, which remains one of the most popular and best-selling chocolate spe-cialties in the French LINDT Christmas assort-ment. In 1960, license sales in France reached 10%, and one decade later they amounted to over 25% of the total Lindt & Sprüngli turn-over. LINDT became increasingly the mainstay of sales for Chocolat Rozan SA.

THE SWISS ART OF CHOCOLATE-

MAKING CONQUERS FRANCE

Since 1960, Chocolat Rozan SA has changed hands many times. New owners followed in quick succession until Lindt & Sprüngli ac-quired a majority shareholding interest of 65% in 1977, gaining control over the French busi-ness. At the same time, this was the fi rst major step for LINDT toward the creation of an inter-national group of companies with a Swiss tradi-tion. In 1989, the fi rm became a wholly owned 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.

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The impressive growth of sales in France called for corresponding investments. Alongside con-stant spending to increase productivity and assure quality, production capacities were boosted signifi cantly. In the last ten years, some CHF 120 million have been invested in equip-ment and buildings. Today, the Lindt & Sprüngli plant in Oloron Ste Marie is one of the most modern in the French chocolate industry.

With dedication and passion, the LINDT Maî-tres Chocolatiers and the French research and development department have been placing their expertise in the development of new and innovative recipes and product concepts un-til, after months of tenacious work, they be-come perfect and unique masterpieces of the art of making chocolate. Products, such as the EXCELLENCE line of chocolate bars, which is now distributed and loved worldwide, were fi rst created in France.

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Today, the French subsidiary Lindt & Sprüngli SA achieves sales worth EUR 242.5 million (2004). An average of 1000 motivated and expert manufacturing employees produce more than 450 different chocolates every year with some 150 different recipes, both for the French market and for export. At the company headquarters in Paris, expert marketing and sales specialists en-sure that LINDT specialties are marketed with attractive communication concepts and reach the retail shelves quickly.

PRESTIGE AND ELEGANCE

IN THE COUNTRY OF GOOD TASTE

Of the chocolate-eating 94% of the French pop-ulation, 70% enjoy this pleasure at least once each week. Over 30% of these consumers can be described as genuine connoisseurs because they eat chocolate every day. Consumer hab-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 fi rst EXCELLENCE bar with a high cocoa percentage of 70% back in 1987.

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But LINDT also offers consumers a whole range of additional specialties in all grades of dark, extending from the widest-rang-ing bars through praliné assortments to the PYRÉNÉENS. While in France 45% of all chocolate products are consumed in bar form throughout the year, pralinés and confection-ery products are mainly sold and eaten during the “Fêtes de fi n d’année,” i.e., the Advent and Christmas festive season. With its LINDOR truffl es, “Petits Desserts,” and “Connaisseurs” pralinés, LINDT is also achieving signifi cant progress in the year-round praliné business and helping to invigorate this segment, in which there is still room for substantial growth.

Delicate and superb pralinés are traditionally presented to friends, colleagues, and family members during the Christmas season. In this segment, the high-quality LINDT products, with their particularly elegant and prestigious gift character, are very popular. Lindt & Sprüngli therefore offers an extensive Christmas range in France. Examples include the “Champs Elysées” assortment of fi ne pralinés, “Lindola” luxury pralinés, and the entirely new “Petites Merveilles” praliné assortment. The inimitable PYRÉNÉENS in three variations, which were extended at the end of 2004, to include a new variety called “Les Rochers,” are also part of 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 fi ve different versions was created under the name “Noisette Sensation.” Each of these fi ve bars combines the crispness of freshly roasted large hazelnuts or almonds and caramelized slivers with a gently melting praliné fi lling and original ingredients, such as cherries, meringue, and caramel pieces or apri-cots and nougat.

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The creativity of the LINDT Maîtres Choco-latiers also seems to know no bounds when it comes to the exceptionally successful EXCELLENCE bars.

This line of large, extra-thin, 100 g bars was launched in France as a genuine innovation in the year 1987. Since then, it has been enriched each year with new and original recipes in a se-lection of different tastes. In the dynamic mar-ket segment of fi lled bars, LINDT also serves up genuine innovations every year. The “Petits Desserts” product range launched in 2003, con-sisting of sophisticated bars with typical fi llings and drawing on traditional dessert recipes, was received enthusiastically by consumers from the outset. It has reported ever-growing success since then.

INNOVATION AS THE DRIVING

FORCE BEHIND SUCCESS

The unlimited creativity and dynamism of Lindt & Sprüngli in the French chocolate tablet seg-ment can be seen in the fact that in 2004, the LINDT brands fi gure no fewer than seven times in the list of top ten innovations in this market segment.

But although Lindt & Sprüngli is growing in France fi ve times faster than the overall market, and the LINDT brand awareness has reached the number one position in the rankings, we are still working to further improve our per-formance. There are many areas of the French chocolate market that still have great potential, 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 fi g-ures, and a true chocolate symbol of Easter.

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It is therefore hardly surprising that LINDT now makes the biggest contribution in value terms and the second biggest in volume to the growth of the French chocolate market, which is worth around EUR 2.1 billion . LINDT is the fastest growing brand with the biggest market share gains in all chocolate segments.

One of the main aims of Lindt & Sprüngli is to take account everywhere of the expecta-tions and needs of consumers. Apparently, the LINDT Maîtres Chocolatiers are on the right track with their carefully selected and innova-tive creations because our efforts are reward-ed on a regular basis. Our “Petits Desserts” line of chocolate bars was declared “Saveur de l’Année” (Flavor of the Year) in 2004. This award is made under the patronage of the inde-pendent consumer association Monadia. And the die has already been cast for the year 2005, as once again LINDT has won the sought-after award, but this time in two different categories – in the chocolate bar segment, with its “Noi-sette Sensation,” and for pralinés, with its new “Les Rochers” PYRÉNÉENS recipe.

TARGETED DISTRIBUTION POLICY

France was a forerunner of modern trade. In the seventies, a process of lasting revolution-ary change began on the retail landscape. While local corner shops continued to exist in other European countries alongside the rising self-service stores and smaller supermarkets – which by no means served the whole existing terri-tory – giant supermarkets and hypermarkets on the American model were already being built on the periphery of the big French towns. Responding to the gathering developmental pace of consumer society, one new distribution chain after another conquered the market. This development soon spread to other European countries, starting with Germany. However, the last decade has seen a massive concentration in the retail landscape and this trend, too, began in France. Today, just fi ve international and na-tional retail chains dominate 90% of the French market with 17 million square meters of retail fl oor space. Of course, this development has enormous consequences for the manufacturers, who are confronted with increasingly severe pressure on their sales conditions.

Lindt & Sprüngli was quick to respond at a very early stage to the new situation in France. It established lasting good relations with the modern trade as far back as 1974, and today the French subsidiary achieves over 95% of its sales with those same retailers. LINDT products are on offer throughout the year in all distribution channels, with the exception of hard discount-ing. Of course, the present retail landscape has become diffi cult terrain even for LINDT. This can only be handled by continuously adapting suitable approaches to the situation. From the outset, Lindt & Sprüngli has always placed em-phasis on building up and maintaining its brand name, on quality, on a high degree of innova-tion, and it has focused on deeper cooperation with the trade in a spirit of partnership. For this purpose, a strong, competent, and highly mo-tivated sales organization has been set up and divided into geographical regions.

Alongside the key account managers, who are based in Paris and maintain close relations with our retail partners, a great many fi eld service employees are constantly present on the sales front under the leadership and coordination of regional managers and safeguard a strong pres-ence for the LINDT brand at the point of sale through personal contacts with local branch managers.

PARTNERSHIPS

It has always been important to understand and respect the interests of both parties from the outset. Our aim is to offer the trade a product with rapid turnaround and fair terms. To achieve that goal, Lindt & Sprüngli invests more and more money each year both in advertising and in trade and consumer promotions. Original concepts, outstanding recipes, fi ne 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.

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To achieve these goals, we pursue a unique and sophisticated merchandising policy that was developed in-house and is consistently pursued by the Lindt & Sprüngli fi eld service employees. In order to further support our presence at the point of sale, we increase con-sumer attention to our products, especially on festive occasions such as Christmas and Easter, through attractive displays. In this way, we create LINDT worlds of experience that most effectively and convincingly communicate the value of our brand and the premium character of our products.

Rational implementation of all these measures creates a sound and forward-looking basis for acquiring bigger market shares and continuing growth at Lindt & Sprüngli. At the same time, it goes a long way toward enhancing brand awareness and further strengthening the excel-lent relations with our retail partners.

LINDT – A BYWORD FOR SWISSNESS

AND PRESTIGE

The perception of LINDT as a premium suppli-er has grown continuously in France in recent years. The brand is associated with important and reliable values such as Swiss tradition, qual-ity, know-how, passion, and elegance. In addi-tion, consumers appreciate the diversity and in-novative character of the product range, which is constantly being renewed and extended.

With a motivated and competent team, the French subsidiary Lindt & Sprüngli SA has gained recognition as the most innovative quality chocolate company in France – a coun-try with a long and superb culinary tradition, where savoir-vivre and quality of life play an important, indeed an overriding, role.

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PREFACE

The Lindt & Sprüngli Group identifies strongly with efficient corporate governance. Both the Board of Directors and Group Management are committed to providing the shareholders, custo-mers and employees with a transparent and de-tailed overview of the Lindt & Sprüngli Group. Our shareholders shall have full confidence that their interests are strongly considered at all times. Our business associates and customers shall be able to rely on the company and the high quality of our products, and our employees shall under-stand that they work for a company with a strong ethical culture.

GROUP STRUCTURE AND SHAREHOLDERS

Chocoladefabriken Lindt & Sprüngli AG is glo-bally active, developing, producing and selling chocolate products in the premium quality seg-ment. The holding company, Chocoladefabriken Lindt & Sprüngli AG, is listed on the Swiss Stock Exchange (SWX). The listing numbers of the re-spective security can be found on page 59 of this report. The market capitalization based on the 2004 year-end prices is CHF 3.6 billion.

The company’s group structure is very lean and 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, 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.

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CAPITAL

As of December 31, 2004, the holding company’s capital structure was as follows:

Ordinary capital The ordinary capital is composed of two types of securities:

• Registered shares* CHF 14 000 000.–• Participation certificates** CHF 7 831 550.–Total ordinary capital CHF 21 831 550.–* 140 000 registered shares par value CHF 100.–** 783 155 participation certificates par value CHF 10.–

The registered shares have voting rights; the par-ticipation certificates have no voting rights. Both types of shares are entitled to a dividend equiva-lent to their par values. All shares are fully paid. No bonus certificates (Genussscheine) were issued.

Authorized and conditional capitalThe conditional capital has a total of 507 070 participation certificates with a par value of CHF 10.–. Of this total, 152 620 are reserved for employee stock option programs; the remaining 354 450 participation certificates are reserved for capital market transactions. There is no other authorized capital.

Changes in capitalDuring the past three reporting years, the follow-ing changes have occurred in the ordinary and conditional capital:

Ordinary capital Conditional capitalYear Registered Participation Participation certificates (PC) shares (RS)* certificates (PC)** “Capital market” “Employees”

2002 140 000 775 775 354 450 100 0002003 140 000 778 439 354 450 97 3362004 140 000 783 155 354 450 152 620Number of securities, status as at 31.12.

* Registered shares: par value CHF 100.–** Participation certificates: par value CHF 10.–

Restrictions and nominee entriesBoth registered shares and participation certifica-tes can be acquired without restrictions. However, the Board of Directors may refuse full share-holder status to a buyer of registered shares if the number of shares held by that buyer exceeds 4% of the total of registered shares as entered in the commercial register. The Board of Directors may permit exceptions to this restriction. During the reporting year, the Board of Directors granted such an exception for 22.3% of the voting rights to Chocoladefabriken Lindt & Sprüngli AG’s “Fonds für Pensionsergänzungen,” in light of the purpose of this fund.

Nominee entries will be granted full shareholder status for a maximum of 2% of the registered share capital as entered in the commercial register.

Options and convertible bondsOptions on Chocoladefabriken Lindt & Sprüngli AG are only outstanding within the scope of the exis-ting employee option plan. Details are reflected in the table below. Details of the options issued and the corresponding terms and conditions are shown in the table below: Year of Number Exercise Maturityallocation price (CHF)*

1999 14 950 754.00 20062000 18 460 758.60 20072001 18 638 833.00 20082002 19 150 847.00 20092003 24 750 648.00 20102004 29 500 1 095.00 2011 * All options were issued at an exchange ratio of 1 option:1 participation certificate.

In 2004, a total of 4716 of the above employee options were exercised (total previous years: 2664). Therefore, the “ordinary” participation capital was increased in 2004 by the correspond-ing reduction in the “conditional” participation capital reserved for the employee stock option 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.

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BOARD OF DIRECTORS

Role and functionThe Board of Directors makes decisions jointly and, for specific matters, is assisted by the Com-mittee of the Board. The Board’s primary function is to provide guidance and exercise control over the Group. The Board makes strategic decisions and defines the gene ral means for achieving the goals it has set for the Company. It sets the agen-da for the Annual Shareholders’ Meeting and ap-proves the annual and interim reports. Decisions regarding the appointment of members to Group Management or of managing directors of subsi-diaries as well as the nomination of the external auditors for election at the Annual Shareholders’ Meeting are taken by the full board.

Members As of December 31, 2004, the Board had six ac-tive members. Dr. Rudolph R. Sprüngli is Hono-rary Chairman and acts in a purely advisory ca-pacity, drawing on his many years of experience. Mr. Ernst Tanner (CEO) and Dott. Antonio Bulgheroni (Chairman of the two Italian subsidia-ries) are executive members of the Board.

Name, Function 1st election Until

Dr. Rudolph R. Sprüngli, Honorary Chairman 1995 —Ernst Tanner, Chairman & CEO 1993 2005Dr. Kurt Widmer, Member 1987 2007Dr. Rudolf K. Sprüngli, Member 1988 2007Dr. Franz Peter Oesch, Member 1991 2006Dr. Peter Baumberger, Member 1992 2006Dott. Antonio Bulgheroni, Member 1996 2005

In the past three years, the non-executive mem-bers of the Board were not actively engaged in the management of the Group or in a group company and none of them had business relations with any entity within the Group.

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.

Ernst Tanner (CH)Mr. Tanner was elected CEO and Vice-Chair-man by the Board of Directors in 1993. In 1994, he took over as Chairman of the Board. The Board is convinced that this dual mandate allows for effective leadership and excellent commun-ication among shareholders, Board of Direc-tors and Group Management. Before coming to Lindt & Sprüngli, Mr. Tanner held for more than 25 years top management positions with the Johnson & Johnson Group in Europe and in the USA, his last position having been “Company Group Chair-man Europe.” Mr. Tanner is also a member of the Boards of Directors of Credit Suisse Group, and Swatch Group.

Dr. Kurt Widmer (CH)Mr. Widmer has been a member of the Board of Directors since 1987. Mr. Widmer is a proven fi-nance and banking expert and was a member of the Executive Board of Schweizerische Kredit-anstalt and Credit Suisse Holding. As president of the Directorate-Ge neral between 1993 and 1995, Mr. Widmer was principally responsible for the repositioning and the successful integration of Schweizerische Volksbank into Credit Suisse Group.

Dr. Rudolf K. Sprüngli (CH)Mr. Sprüngli has been a member of the Board of Directors since 1988. Due to his former exe-cutive and international activities for the Lindt & Sprüngli Group, Mr. Sprüngli is considered an expert and authority in the chocolate business. Today, Mr. Sprüngli manages his own consulting firm.

Dr. Franz Peter Oesch (CH)Mr. Oesch has been a member of the Board of Directors since 1991. Mr. Oesch is a partner of the law firm asg.advocati in St. Gallen and Chair-man of the Board of Directors of the St. Galler Kantonalbank.

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Dr. Peter Baumberger (CH)Mr. Baumberger has been a member of the Board since 1992. He gained international experience in the licensing department of Westinghouse In-ternational in New York from 1950 through 1955 and was responsible for South America at Olin Mathieson Corporation in New York from 1955 through 1959. Thereafter he was Vice President and Managing Director at RCA Overseas in New York from 1960 through 1976. Between 1976 and 1991 Mr. Baumberger was the Delegate of the Board of Directors of Carba Group in Bern. Mr. Baumberger is also member of the Boards of Directors of Swatch Group, and ABN-AMRO Bank.

Dott. Antonio Bulgheroni (IT)Mr. Bulgheroni has been a member of the Board since 1996. Due to decades of gathering experience in all management areas of chocolate production, distribution and Italian retail trade, Mr. Bulghe-roni is an expert in the chocolate industry. He has been CEO and Chairman of the Italian subsidi-ary Lindt & Sprüngli SpA since 1993, and since 1998, has been Chairman of Caffarel SpA. Mr. Bulgheroni holds other board positions with Banche Popolari Unite S.c.r.l., Banca Popolare Commer-cio e Industria SpA, and Autogrill SpA.

Internal organizationThe Board of Directors receives assistance from the Committee of the Board. The Committee of the Board is responsible for setting the total com-pensation of the members of Group Management and of the executive board members of the sub-sidiaries. The Committee moni tors the risk para-meters of the Group regarding investments, foreign exchange, raw material coverage and liquidity.

The Committee meets at least four times per year, but may convene more often, depending on needs. The Committee has the following members: Mr. Tanner, Mr. Widmer, and Mr. Bulgheroni.

Allocation of competencesThe essential principles for allocating the compe-tences and responsibilities among the Board of Directors and Group Management are set forth in the organization regulation.

Information and control The Board is informed on a regular four-month cycle about the Group’s income statement, bal-ance sheet, investments and human resources as well as those of the subsidiaries, by means of a comprehensive and complete Management 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

As of December 31, 2004, Chocoladefabriken Lindt & Sprüngli AG’s Group Management was comprised of four members.

Members Name, Responsibility Since

Ernst Tanner,Chief Executive Officer 1993Hansjürg Klingler,Duty Free & Country responsibility 1993Uwe Sommer, Marketing/Sales & Country responsibility 1993Dr. Dieter Weisskopf, Chief Financial Officer, Finance/Administration/Purchasing/Manufacturing 1995

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Ernst Tanner (CH)For details refer to “Board of Directors” on page 32 of this Annual Report.

Hansjürg Klingler (CH)Lawyer. Mr. Klingler has been a member of Group Management since 1993 and is responsible for es-tablishing overseas and duty free markets. Pre-viously, he was head of Legal and Administration, and then deputy group head at Forbo, an inter-national construction materials supplying Group.

Uwe Sommer (D)Economist, MA. Mr. Sommer joined the Lindt & Sprüngli Group in 1993 as a member of Group Management, responsible for Marketing and Sales with country responsibilities. He gained his profes-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 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.

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COMPENSATION, EQUITY PARTICIPATIONS AND LOANS

Compensation and optionsCompensation of the members of the Board of Directors and of Group Management is based on comparative market studies of peers in simi-lar functions and with similar responsibilities. The scope of compensation is determined by the Com-mittee of the Board.

Option and bonus programs for members of Group Management are based on the perform-ance of the company and the individual, in ac-cordance with the objectives set for the year. This profit-dependent part of the overall compensation is a major factor in determining the level of the program. Again, the Committee of the Board de-cides on the general scope.

Compensation of current and former members of governing bodiesThe total compensation paid to the two execu-tive members of the Board of Directors and to the additional three members of the Group Man-agement was CHF 7.3 million in 2004, the year under review. Total compensation and fees paid in 2004 to the four non-executive members of the Board and the Honorary Chairman amounted to CHF 0.6 million.

In 2004, no payments were made to former mem-bers of governing bodies.

Shares and optionsA total of 100 registered shares were allocated to the executive members of the Board and to Group Management. No participation certificates were allocated.

The non-executive members of the Board did not receive any shares or participation certificates.

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.

The non-executive members of the Board, the Honorary Chairman and closely related parties held – according to the share register of the com-pany – a total of 2660 registered shares on Decem-ber 31, 2004.

Together, the executive members of the Board and Group Management held the following options on December 31, 2004 (holding period three to five years): Year of Number Exercise Maturityallocation price (CHF)*

1999 8 500 754.00 20062000 9 500 758.60 20072001 9 750 833.00 20082002 7 250 847.00 20092003 12 000 648.00 20102004 12 000 1 095.00 2011* All options were issued at an exchange ratio of 1 option:1 participation certificate.

As of December 31, 2004, the non-executive members of the Board did not hold any options on registered shares or participation certificates of Chocolade fabriken Lindt & Sprüngli AG.

Additional compensation, fees and loansApart from the above-mentioned payments, no pa-yments were made to either an executive or non-executive member of the Board or a member of Group Management. There are no loans, advanc-es or credits due to the Group or any of its sub-sidiaries by any of the members of the Board or Group Management.

Highest total compensationThe total compensation of the highest paid Board member amounted to CHF 3.0 million in the reporting year. In addition, 100 registered shares, blocked for one year and 5000 options on parti-cipation certificates in Chocoladefabriken Lindt & Sprüngli AG were granted under the terms and conditions described above.

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SHAREHOLDERS’ RIGHTS OF PARTICIPATION

Restriction of voting rights and proxyWhen exercising the voting rights at the Annu-al Shareholders’ Meeting, no shareholder may combine, in the aggregate, directly or indirectly, whether his own shares or those voted by proxy, more than 6% of total voting shares. Natural per-sons or legal entities, which either by the number of shares or the pooling of votes are linked to each other or are under common custody, are conside-red as one shareholder. The Board of Directors may refuse full shareholder status to a buyer of shares if the number of shares held by that buyer exceeds 4% of the total registered shares entered in the commercial register.

In special cases, the Board may make exceptions to the voting rights restrictions. In the reporting year, the Board granted such an exception to the “Fonds für Pensionsergänzungen der Chocoladefabriken Lindt & Sprüngli AG” for 22.3% of the voting rights, in light of the purpose of the fund.

The restriction on voting rights does not apply to representatives of organizations or to independent proxies or proxy votes designated by the company, provided they are retained as proxy by the share-holder.

Lifting statutory restrictions of voting rightsAmendments to the statutes concerning proxy votes require a three-quarter majority of the votes represented.

The Annual Shareholders’ Meeting passes its resolutions by an absolute majority of the votes represented, unless the statutes or the law pre-scribe otherwise.

Amendments to the statutes with regard to a change in domicile, the transfer of shares, pro-xies, as well as the dissolution or merger of the Company require a three-quarter majority of the votes represented.

Calling of the Annual Shareholders’ Meeting, agenda and share registerShareholders are given notice by the Board of Directors at least 20 days prior to the date of the Annual Shareholders’ Meeting.

Shareholder proposals to come before the Annual Shareholders’ Meeting must be submitted to the company in writing no later than six weeks prior to calling the meeting.

Shares will be entered into the share register up to 20 days before the Annual Shareholders’ Meeting.

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CHANGE IN CONTROL AND DEFENSIVE MEASURES

In the event of a change in control of the com-pany, the employee options granted can be exer-cised without regard to the three to five year hold-ing period. Other than that, there are no special agreements concerning a change in control that would favor either the members of the Board of Directors or Group Management.

The statutes of incorporation make no special pro-vision for “opting out” or “opting up” pursuant to BEHG Art. 22.

AUDITORS

The Annual Shareholders’ Meeting first appoint-ed PricewaterhouseCoopers AG as its auditors in April 2002. Therefore, 2004 is the third year of service for the auditors. In 2004, Pricewaterhouse-Coopers AG charged audit fees in the amount of TCHF 837. Additional fee payments for audit related services and other services totalled TCHF 386, and TCHF 75, respectively.

Supervision, control over and evaluation of the external auditor’s performance is exercised by the Board of Directors.

SHAREHOLDER INFORMATION

Chocoladefabriken Lindt & Sprüngli AG issues business related shareholder communications as follows:

• End of January Net sales of the previous year• First half of March Full-year results• End of April Annual Shareholders’ Meeting• End of August Half-year report

For details refer to «Information» on page 61.

The statutory location of publication is the Swiss Official Gazette of Commerce (Schweizerisches Handels amtsblatt). In addition, information about the company is usually published and collected by the Swiss and international media and by leading international banks.

All company information is also available on the internet under “Investor Relations” at the Website www.lindt.com. Both the annual and the interim reports can be obtained in hardcopy and free of charge at the Group’s head office. For further infor-mation contact the investor relations department, phone +41 44 716 25 37.

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BASIS OF THE CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements are based on the annual accounts of the individual Group companies which were drawn up in accordance with uniform Group accounting principles. The consolidated financial statements conform with Swiss GAAP FER as well as with the reporting and listing rules of the Swiss Stock Exchange.

PRINCIPLES OF CONSOLIDATION

Consolidated subsidiaries The consolidated financial statements of the Lindt & Sprüngli Group comprise Chocoladefabriken Lindt & Sprüngli AG, Kilchberg, as well as all subsidiaries in which the Lindt & Sprüngli Group, directly or indirectly, holds more than 50% of the share capital and voting rights. The most impor-tant participations are listed on the front flap of this report. In compliance with the full consolida-tion method, the assets, liabilities, income and ex-penses of these companies are fully incorpo rated (100%) into the consolidated financial statements. Intercompany accounts receivables and payables as well as intercompany income and expense items are eliminated. Intercompany profits included in inven tories from deliveries to Group companies have been eliminated.

Non-consolidated participations Such interests are shown in the balance sheet under “Financial assets” and are reported in the consoli dated financial statements according to the equity method. The Group does not currently own any interests of this kind.

Capital consolidation Investments in subsidiaries are consolidated accord ing to the purchase method.

Goodwill When first consolidated, the assets and liabilities of a subsidiary are valued according to uniform Group principles. Any residual goodwill after this revaluation is written off directly against share-hold ers’ equity.

Foreign currency translation At the end of the financial year, the balance sheets and income statements of foreign subsi-diaries are converted to Swiss francs at year-end rates and the average exchange rates, respectively. The resulting currency translation differences are directly added to or deducted from consolidation reserves in the balance sheet.

VALUATION PRINCIPLES

Intangible assets The item intangible assets includes acquired licenses, trademarks and similar rights. Such assets are stated at procurement cost and amortized over a period of ten years.

Fixed assets These items are stated at manufacturing or pro-curement cost less depreciation. Depreciation is calculated according to the straightline method over the following useful lives: Years

Land and buildings 0–40Machinery 10–15Other fixed assets 3–8

Land is not depreciated. Buildings are depreci-ated over a period of 40 years, whereas building-related installations are depreciated over a period of 15 to 20 years. Included in other fixed assets are EDP items, office furniture and vehicles.

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.

Notes to the Consolidated Financial Statements

LINDT & SPRÜNGLI GROUP

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Leased assets Fixed assets acquired under long-term financial leases are carried and depreciated in the same way as other fixed assets. The cash values of these leasing commitments are capitalized and reported under liabilities in the balance sheet.

Financial assets Financial assets include loans which mature after twelve months; they are reported at face value. Further, this position contains non-consolidated participations which are valued on the basis of pro-rata equity according to the equity method.

Derivative financial instruments The Group uses derivative financial instruments to hedge operational risks related to raw material prices, foreign exchange and interest rates. For-wards are the most commonly employed instru-ments. Hedging transactions are valued in accord-ance with the underlying transaction. The same valuation method is employed when anticipated transactions are hedged.

Inventories Inventories are stated at average procurement or manu facturing cost. They are valued according to the lower of cost or market principle. Appro-priate value adjustments are made for items with reduced saleability and for surplus inventories.

Accounts receivables Trade and other accounts receivables are posted at face value less operationally necessary value adjustments.

SecuritiesThis item mainly contains marketable securities which are valued at market.

Deferred taxes Provisions are set aside for the difference between book value and tax value. With the exception of land value adjustments in conjunction with acqui-sitions, the liability is based on current local tax rates applied to all temporary differences.

Provisions Provisions cover both actual and potential risks and obligations, taking into account the risks to which an internationally active Group is ex-posed.

Current liabilities All liabilities under this item are due within one year or less. The respective amounts are reported at face value.

Pension obligations The Group operates a number of different pen sion schemes, which have been set up in accordance with the statutory requirements of the various countries involved. In the case of defi ned contri-bution pension plans, the expenditure for the pe-riod corresponds to the contributions paid by the employer, whereas in the case of defi ned benefi t pension plans, the expenditure for the period is determined by actuarial assessments made every three years based on the projected unit credit method. This expectancy value method takes into account not only the existing pensions and rights already acquired, but as well anticipated future salary and pension increases.


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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 866.8 741.5

Currency translation –56.0 –34.6

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

Consolidated Balance Sheet before Profit Distribution


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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

NET INCOME 151.2 7.5 122.4 6.8

CASH FLOW 234.5 11.6 206.2 11.5

Consolidated Income Statement


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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 0.0 –4.5

Capital increase (including premium) 3.5 2.0

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

Consolidated Cash Flow Statement


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Notes to the Financial Statements 2004

With the introduction of Swiss GAAP FER 23, pro-visions as at 1.1.2004, has been reduced by CHF 1.6 million and offset against shareholders‘ equity. If goodwill had been capitalized and amortized over a period of five years, shareholders’ equity as at December 31, 2004, would amount to CHF 833.2 million (CHF 732.3 million in 2003) and net income

for 2004 would be CHF 150.3 million (CHF 121.5 million in 2003). Details of the capital increase and purchase of treasury stock are presented in the Notes to the Financial Statements of Chocolade-fabriken Lindt & Sprüngli AG. The structure of ordinary capital is described on page 31 in the Corporate Governance section.

1. Exchange rates

The following exchange rates were used to translatethe foreign currencies: Balance sheet, year-end rates Income statement, average ratesCHF 2004 2003 2004 2003

Euro-Zone 1 EUR 1.54 1.56 1.55 1.52USA 1 USD 1.13 1.24 1.23 1.34Great Britain 1 GBP 2.18 2.21 2.27 2.20 Canada 1 CAD 0.94 0.96 0.96 0.97Australia 1 AUD 0.88 0.93 0.92 0.88Poland 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 Capital increase 0.026 2.0 2.0 Distribution of profits –24.4 –24.4 Goodwill offset –4.5 –4.5 Currency translation 24.3 24.3Balance 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 –21.4Balance as at 31.12.2004 21.8 –2.1 866.8 –56.0 830.5


Included in the position construction in progress are advance payments of CHF 2.4 million (CHF 5.7 million in 2003).

The insurance value of the fixed assets amounts to CHF 1734.5 million (CHF 1624.6 million in 2003). No mortgages exist on land and buildings.

The impairment charge of CHF 5.9 million con-sists mainly of write downs of fixed assets in own stores (CHF 3.4 million) and production equip-ment (CHF 2.1 million).

Neither capitalized assets, under financial lease, nor lease liabilities existed at December 31, 2004 or December 31, 2003, respectively. Operating lease commitments are expensed immediately.

Intangible assetsCHF million 2004 2003

Balance as at 1.1. 1.4 2.6 Amortization –0.5 –0.8 Retirements 0.0 –0.4Balance as at 31.12. 0.9 1.4

Intangible assets are composed mostly of capital-ized bond issue costs.

Financial assets

CHF million 2004 2003

Balance as at 1.1. 1.8 2.0 Additions 0.9 0.3 Amortization 0.0 –0.1 Retirements –0.9 –0.5 Currency translation 0.0 0.1Balance as at 31.12. 1.8 1.8

5. Inventories


Raw materials 26.9 30.2Packaging materials 50.9 47.8Semi-finished and finished products 207.4 186.3Other materials 4.1 3.2Value adjustment –18.2 –16.4Total 271.1 251.1

6. Accounts receivables


Accounts receivables 580.3 527.4Allowance for doubtful accounts –13.3 –13.0Total 567.0 514.4

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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 –28.7Acquisition costs as at 31.12.2004 482.3 663.2 165.8 28.6 1 339.9Accumulated 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 –13.4Accumulated depreciation as at 31.12.2004 202.3 456.7 129.7 0.0 788.7Net fixed assets 31.12.2004 280.0 206.5 36.1 28.6 551.2Net fixed assets 31.12.2003 292.9 205.0 35.5 13.5 546.9


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Provisions included in Pension Plan mainly are amounts owed to pension funds and similar per-sonnel welfare instruments maintained by the German and Italian Group companies.

Deferred tax liabilities have not been provided for land value adjustments of CHF 2.9 million (CHF 2.3 million in 2003) realized from acquisitions. Losses brought forward in the amount of CHF 49.3 million (CHF 53.3 million in 2003), which are available for future use, also exist with a number of foreign companies. For precautionary reasons, no deferred tax assets have been considered in the balance sheet.

Other provisions comprise provisions for known business risks at the balance sheet date.

8. Other receivables


Advance payments 0.7 1.8Other receivables 46.9 41.9Total 47.6 43.7

Other receivables mostly comprise amounts due from governmental institutions.

9. Other accounts payable

Other accounts payable include provisions for taxes amounting to CHF 17.2 million (CHF 20.7 million in 2003).

10. Bonds

The following bonds were outstanding as at December 31:CHF million 2004 2003

Chocoladefabriken Lindt & Sprüngli AG, Switzerland3% Bond, 1998 – 2005 100.0 100.03 5/8% Bond, 1998 – 2008 100.0 100.0Total 200.0 200.0

The 3% bond, expiring on March 31, 2005, is reported on the line, Bank and other borrowings. The reported figure of CHF 96.7 million, includes bonds totalling CHF 3.3 million held by Chocola-defabriken Lindt & Sprüngli AG.

11. Sales 2004 2003Sales by region CHF million % CHF million %

Europe 1 479.4 73.4 1 312.9 72.9North and South America 433.9 21.5 407.0 22.6Other countries 103.3 5.1 80.6 4.5Total 2 016.6 100.0 1 800.5 100.0

The currency adjusted increase in sales (internal growth) versus 2003 is 12.5%.

12. Other operating income

Other operating income includes an amount of CHF 0.5 million (CHF 0.7 million in 2003) for com-pany-produced additions involving investments in fixed assets. The remainder is composed of income from services related to operating activities.

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 –2.7Provisions as at 31.12.2004 96.4 31.8 44.6 172.8


13. Personnel expenses


Wages and salaries 327.8 307.7Social benefits 92.4 80.7Other personnel expenses 31.3 25.3Total 451.5 413.7

For the year 2004, the Group employed an ave-rage of 6293 people (6011 in 2003).

14. Taxes


Current income tax expense 61.8 64.2Deferred tax income 0.0 –5.3Other tax expense/income 2.7 –1.7Total 64.5 57.2

15. Off-balance-sheet transactions

Contingent liabilitiesCHF million 2004 2003

Discounted bills 16.5 16.7Guarantees in favor of third parties 0.3 0.2Total 16.8 16.9

Future payments related to operational leasing commitments are as follows:

Operational leasingCHF million 2004 2003

1–5 years 50.5 50.0> 5 years 15.8 21.3Total 66.3 71.3

Derivative financial instruments Contract values Non-capitalized CHF million replacement values

positive negative

Total as at 31.12.2004 281.8 13.5 6.4Total as at 31.12.2003 502.4 24.7 2.9

Derivative financial instruments consist mostly of currency forwards, swaps and commodity forwards.

16. Pension obligations

The status of the defined benefit pension obligation is as follows:


Obligations of defined benefit plans 297.1 286.9Market value of the assets available to cover pension commitments –227.1 –219.4Under-coverage –6.5 –5.3Total plan liabilities as shown in the balance sheet 63.5 62.2

The pension commitments were last calculated as of January 1, 2003, and carried forward to December 31, 2004. As of December 31, 2004, the actuarial under-coverage of CHF 6.5 million (CHF 5.3 million in 2003) was within the permitted corridor (FER 16) of 10% and must not be recog-nized in the income statement.

Actuarial calculations were based on the following weighted average assumptions: 2004 2003

Discount rate 4.4% 4.4%Expected return on plan assets 5.0% 5.0%Expected salary increase 2.5% 2.5%Expected pension increase 1.2% 1.2%

The expenses for defined benefit and defined con-tribution plans were CHF 9.2 million (CHF 8.1 mil-lion in 2003) for the financial year 2004.

In addition, there are employers’ funds with net as-sets of ca. CHF 429 million per December 31, 2004 (ca. CHF 251 million per December 31, 2003).

There are no employer contribution reserves ei ther for defined benefit or for defined contribution pen-sion plans.

There are no obligations arising out of past employ-ment relationships that are not covered by provi-sions.

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To the Annual Shareholders’ Meeting of Chocoladefabriken Lindt & Sprüngli AG,Kilchberg

As auditors of the Group, we have audited the consoli dated financial statements (balance sheet, income statement, cash flow statement and notes/pages 40 to 48) of Chocoladefabriken Lindt & Sprüngli AG for the year ended December 31, 2004.

These consolidated financial statements are the responsibility of the Board of Directors. Our re-sponsibility is to express an opinion on these con-solidated financial statements based on our audit. We confirm that we meet the legal requirements concerning professional qualification and inde-pendence.

Our audit was conducted in accordance with auditing standards promulgated by the Swiss pro-fession, which require that an audit be planned and performed to obtain reasonable assurance about whether the consolidated financial state-ments are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the consoli dated financial statements. We have also assessed the accounting principles used, significant estimates made and the overall consolidated financial state-ment pre sentation. We believe that our audit pro-vides a reasonable basis for our opinion.

In our opinion, the consolidated financial state-ments give a true and fair view of the financial position, the results of operations and the cash 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.

PricewaterhouseCoopers AG

Peter Binz Daniel Ketterer

Zurich, March 10, 2005

Report of the Group Auditors

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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

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

Balance Sheet before Profit Distribution

CHOCOLADEFABRIKEN LINDT & SPRÜNGLI AG

52|53

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

Net income 101 534 62 307

Net Earnings as at December 31 115 953 72 413

Income Statement


54|55

1. Liabilities arising from guarantees and pledgesin favor of third parties

Contingent liabilities as at December 31, 2004, amounted to CHF 1.5 million (CHF 12.2 million in 2003). This figure comprises guarantees to third parties for subsidiaries.

2. Assets pledged or assigned

There were no pledged or assigned assets as at December 31, 2004.

3. Leasing liabilities

The company has no leasing liabilities.

4. Fire insurance values

The company does not own fixed assets.

5. Liabilities due to welfare schemes

The company does not have any outstanding ac-counts payable to welfare schemes.

6. Bonds

CHF million

3% Bond, 1998–2005 100.035/8 % Bond, 1998–2008 100.0Total 200.0

As of December 31, 2004, Chocoladefabriken Lindt & Sprüngli AG held own bonds totalling CHF 3.3 million. These bonds are reported in Cur-rent Assets.

7. Significant investments

The most important participations are listed on the front flap of this report.


Notes to the Financial Statements as at December 31, 2004

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8. Dissolution of undisclosed reserves

No undisclosed reserves were dissolved during 2004 that would have had any significant effect on the results.

9. Revaluations

No revaluations which exceed acquisition costs were recognized.

10. Acquisition and sale of treasury stock and participation certificates

Inventory of treasury stockand participation certificates RS PCInventory as at 1.1.2004 0 0 Additions 2004 0 1 611 Retirements 2004 0 0Inventory as at 31.12.2004 0 1 611Average cost of additions – CHF 1 295Average sales price of disposals – –

11. Conditional and approved capital

As of December 31, 2004, the conditional capital had a total of 507 070 participation certificates with a par value of CHF 10.–. Of this total, 152 620 are reserved for employee stock option programs and the remaining 354 450 for capital market transactions. In the year under review, a total of 4716 employee stock options were exercised at an average price of CHF 765.42.

12. Mandatory disclosure of interest positions pursuant to OR Art. 663c

As of December 31, 2004, Chocoladefabriken Lindt & Sprüngli AG disclosed the following shareholders (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%


56|57


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 certifi cates, 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 certifi cates can change as a result of options, granted through the employee option plan, being exercised.

b) As a result of participation-certifi cate 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 that announced and approved at the Annual Shareholders‘ Meeting held on April 29, 2004.


Proposal for the Distribution of Net Earnings

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To the Annual Shareholders’ Meeting of Chocoladefabriken Lindt & Sprüngli AG,Kilchberg

As statutory auditors, we have audited the account-ing records and the fi nancial statements (balance sheet, income statement and notes/pages 52 to 56) of Chocoladefabriken Lindt & Sprüngli AG for the year ended December 31, 2004.

These fi nancial statements are the responsibility of the Board of Directors. Our responsibility is to express an opinion on these fi nancial statements based on our audit. We confi rm that we meet the legal requirements concerning professional quali-fi cation and independence.

Our audit was conducted in accordance with auditing standards promulgated by the Swiss pro-fession, which require that an audit be planned and performed to obtain reasonable assurance about whether the fi nancial statements are free from material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures in the fi nancial statements. We have also assessed the accounting principles used, signifi cant estimates made and the overall fi nan-cial statement pre sentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the accounting records and fi nan-cial statements and the proposed appropriation of available earnings comply with Swiss law and the company’s articles of incorporation.

We recommend that the fi nancial statements sub-mitted to you be approved.

PricewaterhouseCoopers AG

Peter Binz Daniel Ketterer

Zurich, March 10, 2005


Report of the Statutory Auditors

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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


Net income CHF million 151.2 122.4 101.9 91.5 76.2


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


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


Shareholders’ equity CHF million 830.5 728.7 608.9 538.6 497.9


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

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

Group Financial Data – 5-Year Review

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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 0752) Valor 1 057 0763) Year-end shareholders’ equity4) Proposal of the Board of Directors5) Based on the year-end prices of registered shares and participation certificates

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Chocoladefabriken Lindt & Sprüngli (Schweiz) AGSeestrasse 204, CH-8802 KilchbergPhone (+41) 44-716 22 33, Fax (+41) 44-715 39 85

Chocoladefabriken Lindt & Sprüngli GmbHSüsterfeldstrasse 130, DE-52072 AachenPhone (+49) 241-8881 0, Fax (+49) 241-8881 211

Lindt & Sprüngli SA5, bd. de la Madeleine, FR-75001 ParisPhone (+33) 1-58 62 36 36, Fax (+33) 1-58 62 36 00

Lindt & Sprüngli SpAVia Buccari 33, IT-21056 Induno OlonaPhone (+39) 0332-20 91 11, Fax (+39) 0332-20 35 05

Lindt & Sprüngli (Austria) Ges.m.b.H.Hebbelplatz 5, AT-l100 WienPhone (+43) 1-60 18 20, Fax (+43) 1-60 18 28 00

Lindt & Sprüngli (USA) Inc.One Fine Chocolate Place, Stratham, NH 03885-0276, USAPhone (+1) 603-778 81 00, Fax (+1) 603-778 31 02

Lindt & Sprüngli (UK) Ltd.Stockley Road, West Drayton, Middlesex, UB7 9BG, Great BritainPhone (+44) 189-544 58 21, Fax (+44) 189-544 20 23

Lindt & Sprüngli (Canada) Inc.525 University Avenue, Suite 1030, Toronto, Ontario M5G 2L3, CanadaPhone (+1) 416-351 85 66, Fax (+1) 416-351 85 07

Lindt y Sprüngli (España) SAAv. Diagonal 420, ES-08037 BarcelonaPhone (+34) 93-459 02 00, Fax (+34) 93-459 47 52

Lindt & Sprüngli (Poland) Sp. z o.o.ul. Jakuba Kubickiego 5, PL-02-954 WarszawaPhone (+48) 22-642 28 29, Fax (+48) 22-842 86 58

Lindt & Sprüngli (Asia-Pacific) Ltd.8/F Wong Chung Ming Commercial House,16 Wyndham Street, Central, Hong Kong, ChinaPhone (+852) 25 26 58 29, Fax (+852) 28 10 59 71

Lindt & Sprüngli (Australia) Pty. Ltd.Level 7, 299 Elizabeth Street, Sydney, NSW 2000, AustraliaPhone (+61) 2-82 68 00 00, Fax (+61) 2-92 83 72 65

Caffarel SpAVia Gianavello 41, IT-10062 Luserna S. GiovanniPhone (+39) 0121-958 111, Fax (+39) 0121-901 853

Ghirardelli Chocolate Company1111-139th Avenue, San Leandro, CA 94578-2631, USAPhone (+1) 510-483 69 70, Fax (+1) 510-297 26 49

Group Addresses Lindt & Sprüngli

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Chocoladefabriken Lindt & Sprüngli AGKilchberg, SwitzerlandShare capital: CHF 14 000 000, PC capital: CHF 7 831 550

Lindt & Sprüngli (International) AGKilchberg, SwitzerlandShare capital: CHF 0.2 million, Participation: 100%

Chocoladefabriken Lindt & Sprüngli (Schweiz) AGKilchberg, SwitzerlandShare capital: CHF 10 million, Participation: 100%

Chocoladefabriken Lindt & Sprüngli GmbHAachen, GermanyShare capital: EUR 15.5 million, Participation: 100%

Lindt & Sprüngli SAParis, FranceShare capital: EUR 13 million, Participation: 100%

Lindt & Sprüngli SpAInduno Olona, ItalyShare capital: EUR 5.2 million, Participation: 100%

Lindt & Sprüngli (Austria) Ges.m.b.H.Vienna, AustriaShare capital: EUR 4.5 million, Participation: 100%

Lindt & Sprüngli (USA) Inc.Stratham NH, USAShare capital: USD 1 million, Participation: 100%

Lindt & Sprüngli (UK) Ltd.West Drayton, Great BritainShare capital: GBP 1.5 million, Participation: 100%

Lindt & Sprüngli (Canada) Inc.Toronto, CanadaShare capital: CAD 2.8 million, Participation: 100%

Lindt y Sprüngli (España) SABarcelona, SpainShare capital: EUR 3 million, Participation: 100%

Lindt & Sprüngli (Poland) Sp. z o.o.Warsaw, PolandShare capital: PLZ 1.3 million, Participation: 100%

Lindt & Sprüngli (Asia-Pacific) Ltd.Hong Kong, ChinaShare capital: HKD 0.5 million, Participation: 100%

Lindt & Sprüngli (Australia) Pty. Ltd.Sydney, AustraliaShare capital: AUD 1 million, Participation: 100%

Caffarel SpALuserna S. Giovanni, ItalyShare capital: EUR 2.2 million, Participation: 100%

Ghirardelli Chocolate CompanySan Leandro, CA, USAShare capital: USD 0.1 million, Participation: 100%

Lindt & Sprüngli Financière AGKilchberg, SwitzerlandShare capital: CHF 5 million, Participation: 100%

Lindt & Sprüngli (Finance) Ltd.St. Peter Port, GuernseyShare capital: EUR 0.05 million, Participation: 100%

The Lindt & Sprüngli Group

Agenda


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


Investor Relations

Chocoladefabriken Lindt & Sprüngli AGDr. Dieter Weisskopf, Chief Financial OfficerSeestrasse 204CH-8802 KilchbergPhone +41 44 716 23 99Fax +41 44 716 26 60

Internet

www.lindt.com

Information

60|61

Honorary Chairman

Dr. Rudolph R. Sprüngli

Board of Directors Term expires Spring

Ernst Tanner 2005Chairman and CEO

Dr. Kurt Widmer 2007

Dr. Rudolf K. Sprüngli 2007

Dr. Franz Peter Oesch 2006

Dr. Peter F. Baumberger 2006

Dott. Antonio Bulgheroni 2005

Group Management

Ernst TannerChairman of the Board and CEO

Uwe SommerDirectorMarketing/Sales Country responsibilities

Hansjürg KlinglerDirectorDuty FreeCountry responsibilities

Dr. Dieter WeisskopfDirectorFinance/Administration/Purchasing/Manufacturing

Key Financial Data of the Lindt & Sprüngli Group

2004 2003 Change

Income Statement in %

Consolidated sales CHF million 2 016.6 1 800.5 12.0

EBITDA CHF million 298.6 265.2 12.6


EBIT CHF million 219.4 188.7 16.3


Net income CHF million 151.2 122.4 23.5


Cash flow CHF million 234.5 206.2 13.7


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


Fixed assets CHF million 553.9 550.1 0.7


Long-term liabilities CHF million 281.5 382.6 –26.4


Shareholders’ equity CHF million 830.5 728.7 14.0


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

CHOCOLADEFABRIKENLINDT & SPRÜNGLI AG

SEESTRASSE 204, CH-8802 KILCHBERGSCHWEIZ/SWITZERLAND

WWW.LINDT.COM

2004

2004 - lindt-spruengli.com · caffarel spa luserna s. giovanni, italy share capital: eur 2.2...

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