Went for a more conscious and mindful indulgence, migrated more to premium brands like Lindt. So we were one of the big winners in the market, gaining share in volume as well as in value globally. What is driving the cocoa price inflation? As you know, we have on the one side climate change, which brings weather conditions which are not favorable for the yields and for the crops, mainly in West Africa.
And at the same time, we have plant diseases. There is a virus which is spreading and reducing the crops in Ghana and in Ivory Coast in a significant magnitude. These two countries represent more than 60% of the world's cocoa crop, and their crop has declined substantially in the last year.
So for four years in a row, we saw a deficit in the market, meaning that the supply from the farmers was lower than the demand for grinding of cocoa beans. The trends, as mentioned, we see an ongoing premiumization with an aging population, with an increasing middle class. We see more and more people eating less but better quality. And this is a trend which is in favor of our brands. We see mindful indulgence and health consciousness.
Also, this goes into our turf, where we are a market leader with dark chocolates, higher cocoa percentages, etc. And we see also that consumers are aware of sustainability programs and expect from industry to be leading also in this area. Let me come to the regional performance. Our strongest area is and has always been Europe, where our brands are established for many decades.
This has also shown in the last year that the brands are so well established that the price elasticity is lower than in other areas. With a 9.5% organic growth, I must say it was also above our expectations. We really showed a very solid performance in this region. The second biggest region is North America, which represents 39.4% of our total group sales. We had a disappointing performance here with only 5% organic growth.
We also referred to it in the presentation of the first half of 2024. The reasons were the U.S. American chocolate market saw a dramatic swing from a strong growth momentum in 2023 to a decline in volume and a stagnation in value in 2024. Consumer sentiment was on an all-time low in the U.S., and also our brands could not resist against this development.
Still, with all our brands in the U.S., we were gaining market share. As mentioned, we were growing in volume. We were growing stronger in value than the stagnating market. So we are a winner, but our growth came down from double-digit growth in 2023 to 5% growth in 2024. The strongest growing area at the same time, the smallest, is the rest of the world. And we have stated already in the last two years here that this is the area where we want to grow fundamentally stronger in the years to come.
With 10%, we are slightly below our expectations, and I will explain pretty soon where this is coming from. But we still see a huge opportunity in this region. And certainly, our ambition to grow is stronger than this 10% that we saw in the last year. Let me come to Europe in detail.
Germany, the biggest chocolate market in Europe, saw a substantial shift to hard discounters in the last year. So hard discounters were the biggest winners. And as you know, we are not represented in the hard discounters. And despite this, we could outperform the market. So we grew more or less in line with the total market, including discounters, despite the fact that the distribution channels where we are represented showed a much weaker performance.
So altogether, it's a very solid result in Germany. France, an outstanding result. We gained the highest market share gain in the whole group we saw in France last year. As you know, we are a market leader globally in dark chocolate, anything above 70%. That's a strength with our brand Excellence. And Excellence grew double-digits throughout the group. And France showed a strong performance with 12.3%, driven by its tablet business.
The U.K., for me, even more impressive. It's the second year in a row we see a double-digit growth in the U.K., despite the fact that HFSS regulations kicked in two years ago, and HFSS, meaning high-fat, sugar, and salt products, 19 categories in total, were restricted for placements, for advertising, etc., so no placements in entrance areas, no placements in the checkout areas, and still, we saw that Lindt could benefit even from these restrictions.
As mentioned, people made a more mindful, more conscious choice for their indulgence and were deciding more often for premium products like Lindt, and with a 15.7% growth, we clearly outperformed also the market in the U.K. Italy, a slightly weaker growth rate, but you have to know that we are a strong market leader with our brands Caffarel and Lindt in the traditional trade.
The traditional trade experiences quite some problems in Italy. In this declining channel, we had some issues. Of course, with a strong growth in modern trade, we still could grow in line with the market. Switzerland, also here, market share gains. In addition, a very strong growth in our own retail channels. Switzerland has one of the highest shares of direct-to-consumer businesses.
With the recovery of tourism, we benefit, of course, also here in this channel. Another impressive figure is CEE, Central and Eastern Europe, mainly Poland, Hungary, Czechia, Slovakia. We could double the business in the last three years. With ongoing growth rates above 20%, or exactly in four years since 2020, we doubled the business. They have a very strong market position and grow market shares year after year.
Iberia, Austria, Nordic, Benelux, all with strong growth rates and with market share gains. So altogether, we can say we had a very solid business in Europe. Let's go to North America. Ghirardelli, with a nearly double-digit growth rate, also strong performance. Lindt US, as mentioned, we saw an Easter shift. And Easter is very important for Lindt in America. It was shipped in 2023, not in 2024, because we had a very early Easter date beginning of April.
Russell Stover had to struggle a bit with price increases. And at the same time, they are streamlining their portfolio. So a part of it was planned, a part of it was not planned. Canada and Mexico with a solid performance, 6.8% and 9.3%. What we hope is that the market recovers and accelerates in this year and in the years to come.
At the moment, we see the weakest chocolate market in the U.S. And of course, that's not a good precondition to grow substantially in this market. What we also did, as you know, we have in Ghirardelli our own stores. And we opened for the first time a store in New York City in the Empire State Building. So if you want to have one of our famous hot fudge sundaes with a view, you can enjoy it on the platform and on the rooftop of the Empire State Building.
Let's come to the last region, rest of the world, with CHF 720 million, as mentioned, a relatively small region still for us. Or in other words, rest of the world, as we define it, represents 30% of the total global chocolate market. And it is in our portfolio only 13%. This illustrates the potential that we want to exploit in the years to come. And you can see in core markets like Japan with a 25% growth, Brazil with an 18% growth, China 17% growth. We had a very solid performance.
Also global travel retail, we are a market leader in the duty-free business around the airports around the world with 9.3%. Also here, we had a good performance, but we struggled in Australia, which is a very big part in this portfolio of CHF 720 million. We had issues with our biggest customer. He did not want to accept our price increase.
So we sustained all promotional activities for a couple of months. In the meantime, we found an agreement and we cooperate nicely again. But it really harmed the result in Australia. And also distributor business, some of our distributors were hesitant to implement the price increases.
They thought that with the new prices, the consumers would not accept. Also here, we saw a second half, which was significantly stronger than the first half, and therefore, we are optimistic for 2025. In Chile, we opened a subsidiary. We opened also a subsidiary in India because Chile and India, we will go ahead with our own retail channel, and we also signed a joint venture in Saudi Arabia, also with the intention to open retail stores in the malls there, which are really blossoming and booming.
Let me come to the last business sector that I want to address. That's our global retail or direct-to-consumer business. We grew 16.7%. And this is a comp store growth, so like for like, without expansion of 7.6%. This also contributed massively to the increased profitability of the group. We have now a footprint of 568 physical stores around the globe.
This means we opened net 45 new retail stores. As you know, we believe that these retail stores are not only generating profitable growth for us, but they are adding to the brand equity in an unprecedented way. It is a unique business that we have that differentiates us from our competitors. It helps to create an experience that strengthens our brand in a unique way.
Therefore, we want to foster further the expansion of our retail channel. 21 e-shops with a strong double-digit growth also contributed to this result. We opened the first stores in Chile, Mexico, and New Zealand. We rolled out a loyalty program called My Lindt, which gives us also very important access to first-party data so we can better understand the patterns and the behavior of our consumers. We see an ongoing trend toward gifting and personalization that we play in our retail stores. With this said, I hand over to Martin Hug to give you a presentation about the financial results in 2024. Thank you.
Thank you, Adalbert, for this summary. I will give you now an overview of the financials of 2024. And I'm really excited because we have quite a solid set of numbers to present. I mean, organic growth, you have seen 7.8%, driven a lot by Europe. Then the EBIT margin went up by 60 basis points. You will see later in my presentation that one of the key drivers, not only in 2024, has been North America. Really nice growth trajectory in terms of the EBIT margin in North America. Free cash flow is at a new record level, actually, with CHF 635 million, which is 11.6%.
It's actually above our guidance of an average of about 10%. Earnings per share also increased massively over the last four years, actually more than 40% up over the last four years, and again, an increase in 2024 to a new record of CHF 2,917, and then, despite our share buyback, which we have advanced quite well in 2024, we purchased about CHF 300 million.
We have a very solid net debt position, improved net debt position, actually down from CHF 943 million to CHF 882 million. Organic sales, we have grown to 7.8%. But if you look back at the last four years, we have basically grown 13%, 11%, 10%, and almost 8% over the last four years. That's an average of close to 7%, which is right in the middle of our guidance of 6%-8%.
We are now at CHF 5.47 billion, which in Swiss francs is a slightly lower growth than our organic growth at 5.1%, but we are adding another CHF 260 million in terms of total revenue, and over the last four years, we have added almost CHF 900 million to our top line. The sales growth factors, how do we break down the organic growth or the also Swiss franc growth? Price was the predominant driver of our growth with 6.1%, then volume mix came in at 1.5%.
That's actually positive news here, mainly because this 1.5% is driven by volume, actually, so mix is slightly negative. Volume is even slightly higher than the 1.5%, so despite the 6% price increases, we have been able to drive a positive volume, and then the Swiss franc strengthened again against most of the major currencies. The negative impact there has been 2.7%.
In terms of the sales growth by segments, we have heard it already from Adalbert. Europe, really driven mainly by the UK, France, which grew double-digit, but then also Czech Republic, Poland, and Benelux growing double-digit. And in all the other European markets, we grew mid to high single digit. So real success story in Europe in a market where we have high market shares.
In North America, without the one-offs of the first half, we would be at 6%. So I think that's a solid performance considering that the market was actually flat in value and negative in volume by about 5% or 6%. And then rest of the world is at 10%. So we always say we want to grow double-digit in rest of the world. We have achieved 10%. I mean, for sure, Australia didn't help in 2024.
We are confident that going forward, we will continue to grow rest of the world double-digit because we have only about 13% of our total revenue in that segment. And it's a big chunk of the total chocolate market. Moving on to costs. So material costs increased, not surprisingly, right? I mean, you have seen the cocoa bean prices.
They went up quite substantially. So our overall material costs went up by about CHF 200 million. And even more importantly, our cost ratio went up from about 33% in the last years to about 35%. So you have seen we have increased prices by a bit more than 6%. This has not been quite enough to offset the negative impact from the cocoa bean prices. So that means that going forward, we will need further price increases. So we have announced this before.
We will do double-digit price increases as well in 2025. I think that's important to take away. So chocolate in the future will be more expensive than it has been two or three years ago. That's not just Lindt chocolate. That's chocolate in general. And the reason for that, you can see on this chart when we look at the cocoa bean price development, that's the futures market in London, the second position.
So we can see that from April, the price went basically up. It's already started to go up in 2023, but from about January, February, it started to go up a lot. And there has been a lot of volatility. We have seen another steep increase, more or less from September. It has gone up to more than GBP 8,000 per ton. And it has come down a little bit again in recent weeks.
Currently, the relevant future months for us is at about GBP 6,000 per ton, which is more or less three times higher than it has been in the long-term average. You can see 2022, and if we show this chart, even the last 20 years, it has been a relatively boring story. It has always been at about GBP 2,000 per ton, and now we see a lot of volatility.
The reasons they have been mentioned by Adalbert, right? It's about the climate. It's about also this disease, swollen shoot disease. It's difficult to predict the current crop in West Africa. We are expecting demand to come down because all the chocolate companies will increase prices. On the other side, we also see some better crops in countries like Ecuador, so at the moment, we foresee a more or less balanced crop between supply and demand for 2024, 2025.
And then going forward is the big question mark, right? But I would rather expect the market over time in the midterm to come down because I think we can see a certain exaggeration happening over the last few months. Personnel expenses have also come down in percent, actually. From 2021, it was at 21.5%. Now it's at 19.5%. So we have had a good operating leverage here of 200 basis points. And going forward, I'm expecting actually more leverage here in terms of personnel expenses.
I mean, some of the reasons here is for sure the higher price increases than wage increases. We have had an extraordinary growth in the last four years, as I've shown you, growing double-digit in three out of the last four years. We have also a very good performance in our retail division, which is quite personnel intensive. So we have operating leverage there.
And then we have lots of efficiency projects as well in our factory across the organization, trying really to gain productivity. Then operating expenses is flat in terms of the absolute number at CHF 1.4 billion. It's coming down in terms of % from 27% to 25.6%. So we have quite a substantial operating leverage here. We have been able to increase our advertising spend, which is good news.
At the same time, we have had a lot of efficiencies, mainly in the area of supply chain, logistics. And this has really helped us to improve the ratio substantially by 140 basis points. Depreciation here, that absolute number is going up to close to CHF 300 million. We have announced that before. Our CapEx is above CHF 300 million. So over time, you would expect depreciation also to go towards CHF 300 million. And that is happening here.
However, the ratio is also coming down from 6% to 5.4% over the last four years. And I'm expecting a similar trend as well. I think there will be rather a declining ratio in depreciation as well. So operating profit EBIT, we have heard about the 60 basis points improvement. I think it's even more impressive when we look back at 2021 from where we are coming, right? 2020, I'm not mentioning because it was especially with COVID pandemic.
But we have increased our EBIT margin by 210 basis points over the last four years, which I think is great news. It means that we have increased our EBIT absolute versus 2023 by 8.7%. One of the key drivers of the improved EBIT margin over the last four years is really the great performance in North America.
We were at, and you don't see this on this chart, but if we actually opened up this chart and showed you also 2021, we are coming basically from a 6% EBIT margin. It then increased about 8% in 2022, 11% in 2023, 12% in 2022, 12% in 2023, and now it's 13%. So we have really improved the EBIT margin by more than 500 basis points in the last years in North America.
So that's the key driver of our improved EBIT margin. That's coming mainly from the fact that we are working together on many projects between the three brands in North America, improving efficiencies, mainly in logistics, but also in other back office functions. In Europe, we have remained at a very high level at 19.3%, more or less flat. I mean, slight improvement of 10 basis points at a very high level.
And then in the rest of the world, our EBIT margin came down from 15% to 14.4%. That's actually driven by strategic investments on the one side in brand support, on the other side as well in terms of investment in people, right? Because we are growing in the rest of the world, we are opening new subsidiaries.
So we are investing behind people as well in the rest of the world. EBITDA for the third time in a row above CHF 1 billion, an increase of 8% last year. Tax rate, we had a bit of a special situation in 2023 because we had a one-off coming from the new Swiss tax regime. And we had a one-off of CHF 70 million in 2023. If we exclude that one-off, our tax rate was at 23.6% in 2023 and at 21% in 2024.
On average, when you look at the last four years, we were always roughly at 21%. Going forward, I'm expecting a higher tax rate in the range of 22%-24%. Main driver is Switzerland because the taxes are going up in Switzerland over time, actually. And then we are becoming more profitable in the U.S. And the U.S. has higher taxes than this 21%. So that will not be beneficial in terms of tax rate.
Net income at CHF 672 million, that's also a new record level. We are higher by 11.8% if you compare the number versus 2023, excluding the one-off of the CHF 70 million. And then CapEx, I have already mentioned, we are now at CHF 314 million, which is 5.8% of revenue. So we are right in the middle, more or less, of the guidance, right? We are guiding for around 6% CapEx going forward as well.
We were at 6% in 2024. Some of the key projects here have been our cocoa mass facility in Olten here in Switzerland, which we have expanded. The factory in the U.S. because of the future volume growth, we have expanded the factory over the last few years. There are also other big projects like SAP. We are implementing one SAP in the group over the next five, six years.
That's also one component of the overall CapEx, which is increasing. A very positive free cash flow story at 635. That's a new record in absolute terms, 11.6%. That's an increase of 33% compared to last year. We have had a very strong operating cash flow. We have also managed the net working capital quite well. CapEx came in a bit lower than what we had anticipated for 2024 one year ago.
Earnings per share is up also by 12.7% compared to 2023 when we exclude this one-off impact. We had a new record, as I have mentioned, more than 2,900. And I think it's even more impressive when you compare that versus 2021. We're actually up by more than 40%. So I think it's in a very difficult environment. We shouldn't forget that, right? 2024 was a very difficult environment, as you have seen, because cocoa prices went through the roof.
So I think we have managed the overall numbers quite well. Very good execution, I think. Net financial position came down. Free cash flow CHF 635 million. You have given back quite exactly the same amount to the shareholders, CHF 627 million, combined between the dividend and the share buyback. And that brings us to this CHF 882 million. It's interesting to compare that versus the EBITDA of more than CHF 1.1 billion.
It gives us a multiple of 0.75, which is actually quite low. We have a very solid position still in our balance sheet, high liquidity, relatively low net debt. I think that's good in a very difficult environment. Our equity ratio is also very high at 52.8%. If you compare our equity ratio with peers, we are much higher on the equity ratio.
We have a high equity ratio, we have a high liquidity, we have a low net debt. I think overall a very good story here in terms of the balance sheet as well in very volatile times in which we are living right now. The shareholder return is again solid. CHF 1,500 is the dividend we are proposing to the AGM. That's up CHF 100. It's actually the 30th time in a row that we are increasing the ordinary dividend.
That brings the dividend yield to 1.5% and the payout ratio target is roughly 50%. And we are more or less there slightly above, but 50% is more or less the target for the payout. And the market cap at the end of the year was CHF 23.3 billion. If we look as per today, this has gone up, right? I mean, at that time, the share price was CHF 100,000.
As of yesterday, it was more or less a bit higher than CHF 110,000. So if we looked at the market cap as per today, we would be closer to CHF 26 billion, which is then the second highest market cap that we have seen at year-end. 2021 was a bit of an anomaly because shares were in general quite high at the end of the calendar year 2021. So that's my summary on the financials. I move on now with sustainability.
Sustainability is a key priority for our business. It is really a strategic business driver for us as well. And as a chocolate manufacturer, cocoa is, of course, our most important raw material. And I'm giving you a bit of a quick overview about the cocoa, the different projects in cocoa. So in 2024, we joined the ICI, the International Cocoa Initiative.
So that supports actually an industry-wide kind of initiative to work against the child labor, right? We don't want child labor, so we are really working on that together with peers and with the industry. We also engaged the ICI to basically review our child labor monitoring and remediation system, which is implemented by our suppliers because they are really an organization that knows about child labor and how to basically what best in class looks like.
We have also improved our traceability systems in line with the requirements of the EUDR, the European Deforestation Regulation, which has now been postponed by one year, but we were ready basically on the 1st of January, so we have improved a lot our traceability systems as well. We have introduced Rainforest Alliance on top of our farming program as well.
We started to design our living income program, which we announced, right? That we will pilot with 5,000 farmers till 2027, so we have started with the design and we will announce more details once we are ready, and last but not least, we have also initiated the agroforestry program in Côte d'Ivoire, so that helps our Science Based Targets initiative and it helps to reduce our emissions basically going forward. In terms of farming program highlights, I mean, we have heard about the 84%, right?
We will have a target by end of 2025 to get to 100% of cocoa sourced through the farming program or other responsible sourcing programs, and we will achieve that in 2025. So we'll achieve, we'll go up another almost 16% in 2025. We have invested more than CHF 33 million in those responsible sourcing programs in cocoa, and some of these funds went into drinking water systems. I mean, since 2008, when we started the farming program, we have built more than 250 drinking water systems.
We have built 75 schools as well since 2008. We are training individuals to have additional income basically, right? So one thing you can think about is that they have multiple crops, not just cocoa. So we are really supporting the farmers in this area of income-generating activities, and we have trained almost 12,000 farmers in 2024.
Since 2008, it's more than 65,000 farmers that we have trained on this initiative. And then overall, in the seven countries of origin, we are working with roughly 118,000 farmers as part of our farming program. How about science-based targets? We launched the Science Based Targets initiative, the science-based target project in 2023. At the end of 2023, our SBT targets were actually approved by the Science Based Targets initiative. In 2024, we started to work on a roadmap, so we became more concrete.
We really worked on the projects with our subsidiaries as well. And within Scope 1 and 2, some of the initiatives we are working on is we are basically using renewable energy, and we are also working on energy efficiency. So compared to our 2020 baseline, we have been able to improve our emissions, so to reduce our emissions by about 9%.
In the area of Scope 3, we are working on basically reducing the emissions in the area of cocoa, right? I mean, one area is about deforestation, right? We want to avoid deforestation. We're also working with dairy farmers to improve farming practices, as an example. We are redesigning some of our packaging to make it more sustainable. And we are also trying to improve our shipping efficiency, which doesn't only help emissions, it also helps costs.
So those are a few areas that we are working on. And in 2024, compared to 2023, we were able to reduce the emissions in the Scope 3 by about 8%. It's slightly higher than in 2020 because of volume growth, but I think we have a good path going forward to reduce emissions also in Scope 3. So that's the summary of sustainability.
I've just shown you two areas of sustainability in the interest of time. Today, we actually also published the sustainability report, so you can check the sustainability report online for those of you who are interested. It's quite a big report with a lot of details. I mean, in terms of a summary of 2024, you have just seen sustainability. In terms of the financial, I think the two extraordinary KPIs that we have been able to improve is on the one side, EBIT margin, which we increased to 16.2%, as we have seen, mainly driven by North America.
And then we have also massively increased our free cash flow in a very difficult environment with high cocoa bean prices. We have been able to improve our free cash flow by more than 30%, which is something we are quite proud of. With that, I now hand over to Adalbert again, who will talk about the growth agenda and also give you an outlook. Thank you.
Thank you, Martin. I'm coming to our plans to grow in the future and an outlook. This is our strategy in a nutshell, as we call it. Our strategy, how do we enchant the world with chocolate? First of all, as you know, we have a growth agenda. This means we want to expand. We have a very strong position in Europe, but we have also proven that we can grow nearly double digits despite this strong position or because of this strong position. And so that's clearly also our intention for the years to come to use this strong position, the strong muscles that we have in advertising, brand support, also for future growth in Europe.
We have North America as a second big geography. Here we have still weak market shares. We operate with three brands, with Lindt, Ghirardelli, and Russell Stover. And of course, we want to come back to overproportional growth in North America. And then we have the huge geography of the rest of the world where we see that chocolate is getting more and more relevance. The markets are growing, and we take a lot of effort to accelerate our growth in these areas.
We also use our retail channel as a spearhead to conquer these markets. Good examples are Brazil, Japan, but also now South Africa or Chile, where we enter first with the retail stores to create brand awareness and experience and then capitalize our strong position in the wholesale channel. But we are not only leveraging the geographies, we are also exploring new premium chocolate-related segments.
One way was, for example, the launch of our wafer chocolate. In our retail channels, we also go into baking products. We have launched a Dubai Chocolate also now, so we are also trying to expand the portfolio. How to win consumer centricity is the key of everything that we do. First of all, market research has always been a very important part to understand better what the consumer needs are, but also social listening, again referring to
Dubai Chocolate, where we have been the only big company responding to this viral trend that we have experienced in TikTok and in other social media platforms, and we have our own direct-to-consumer channel, which gives us a lot of insights about consumer behavior, so this is very important to come up with innovation to respond directly to consumer needs.
Of course, quality is the centerpiece of our strategy, highest quality in everything we do and best taste, as we have products where you can immediately identify if you like it or not, unlike other categories like in cosmetics where you have to wait for years if it performs or not. The underlying enablers for our success are written in the columns down there. Entrepreneurial culture. We have a very experienced management team.
We have a high continuity in Lindt & Sprüngli, and this allows us to empower the managers out there. As you know, we have a decentralized culture. It means that the local organizations have a high accountability for their results, and therefore they also have a high freedom to operate. This makes us more agile and also more responsible to the trends that we experience out in the markets. Sustainability.
Our company celebrates 180 years of existence in this year, and this shows that sustainability is already in our DNA. We are here for the long term, and therefore sustainability is a real purpose for all of us in the management and, of course, also high business ethics. Operational efficiency is a precondition to stay competitive. And of course, we also embrace any technological progress which is out there.
We invest at the moment a huge amount in a new ERP system for the whole group. So we will have one ERP backbone in a couple of years with common master data, etc. We are working on AI solutions in different areas to make us more effective. And all this together should help us to win also in the years to come. What is our outlook? We want to continue to grow faster than the market.
This is one of the key performance indicators for our management to grow market share. We know, and Martin has mentioned it, that also in 2025, we will have to go out with significant price increases. As you have seen, the development of the cocoa price, we cannot absorb this with efficiency or cost control. So we will also pass on a significant proportion in terms of prices to the consumers.
But what we will not do, despite all the cost control, we will not cut back on brand support. We believe that the brand support is crucial to keep the momentum, and therefore also in the past years, we were able to protect the spending behind the brand. And in addition, we have the immense impact of our retail channels that also help to strengthen the brand equity. I come to the outlook for 2025.
We have increased our guidance from 6-8% to 7-9%. This is due to the price increases that we have to implement. As Martin said, it will be double-digit price increases. We want to improve our EBIT by 20-40 basis points. The medium to long-term guidance is unchanged, 6-8% NTS growth and 20-40 basis points improvement in the EBIT margin.
With this said, I come at the very end to a highlight that we experienced in our marketing in this year. Probably one or the other of you have noticed it. We experienced a trend in social media with this Dubai Chocolate. In the beginning, we said, how can we respond to this? Because the recipe is very complicated, but we, as a still very artisanal manufacturer, were able to do it handmade.
So, we made it with the Maître Chocolatiers in Germany. Here in our home of chocolate, we made a limited edition of handmade Dubai Chocolates. And we were overwhelmed by the reaction of our consumers. We distributed it only in our own retail stores. Also, this enabled us to do it. If we would only be in wholesale in the big supermarket chains, we wouldn't have been able to cater to thousands of supermarkets.
But so we said it's a limited edition available only in our retail stores. And after, let's say, the reaction of our consumers and also of media, we decided to develop a recipe which was also able to be produced on our lines. And this we called Dubai style chocolate, not to avoid any confusion with the handmade version. And I will show you a short video now how this whole thing developed in the market.
[Foreign language]
Yeah, that was the launch of our Dubai Chocolate. And as you have seen, we got free media or a media equivalent of more than CHF 100 million only in the DACH region. And in the meantime, we are on the way to roll it out globally. It will still be limited because the product is so complicated. It has 45% pistachio cream and this kataifi inside so that the shelf life is only four months. So this is why we decided not to launch it at any shelf of any supermarket because we fear that the product might age. So it will only be in-out with display drives.
We have already our first experience in Germany where the displays were sold within hours or a couple of days. This will be like a limited edition, but in a broad distribution. Of course, we didn't want to leave you here without Dubai Chocolate. Each of you will get a bag like this. In this bag, you find the original handmade Dubai Chocolate.
You know, it's very precious. It was sold on eBay for several hundred CHF. You also find the new Dubai style chocolate that will be sold in the supermarkets, so that you can leave it as a gift, you don't have to open it and try it. You can bring it. Probably you have some teenagers around in the family who will get mad about this gift.
You can try the product when we invite you for the apero. So we have open samples and you can try it here and take your gift home to your beloved ones. So thank you. That was our presentation. And now I would say distribute, please, our small gift that we have prepared for Dubai Chocolate. And then we are ready for the Q&A session for you. Thank you. Please.
I'm John Revill, Reuters. I've got a couple of questions, if I may. Forgive me if you've said this. Sorry. John Revill, Reuters. A couple of questions. What's your outlook for actual cocoa prices this year? I think you mentioned it, but I may have missed that. And because there's some kind of talk of after last year that production may actually be higher than demand, or what's the kind of your outlook there?
And then the second one is Donald Trump. Surprise, surprise. He's announced tariffs today against Canada, Mexico, and China. And I was wondering, how does that affect you guys in terms of if tariffs then go into Europe, will that affect you? And I'm sure you'll probably say you've got production in America and that's probably your way around it.
However, that would lead to a generally inflationary environment in America, generally prices of everything going up. So is that going to squeeze you on top of your double-digit price increase that you've already just said? So with prices going up, prices are going more, and of course, for everything else going up in America, is that going to hit you over there? Thank you.
Let me start with your second question, if you allow. So the good thing is we run five factories in the U.S. We don't run a single factory in Canada or in Mexico. So the tariffs that were announced today or yesterday will not have a direct impact on our business. Your second part of the second question was, what if Trump would impose tariffs also on Europe?
It would have a minor impact, as 95% of the volumes that we sell in the U.S. is produced in the U.S. We have some products like the hollow figures that you see here, Gold Bunnies or Santas or Teddies. They are exclusively produced in one location, and they are shipped to the U.S. So we would see an impact there. In general, we can say for seasonal products, price elasticity is lower than for everyday products. So we would also be able to handle this impact.
So altogether, of course, if it comes to inflation, if, as we know, that competitors are producing in Canada and are producing in Mexico, it will probably have an even bigger impact on price increases in the chocolate market. And this could, of course, have a negative impact on volumes overall. So we will monitor the situation, and we have to see.
But in general, as the volumes dropped already substantially last years, we don't expect that there will be a further dramatic correction in volumes. To the cocoa prices, your first question, Martin made a statement already. I fully support his statement. I think we have reached very high levels. So all the low crops and the low expectations of a yield are priced in. That's what our understanding is. Either we see a flat development or a decline as soon as, either on the demand side or on the supply side, we see some improvements. Martin.
I mean, I would expect more or less a balanced picture between supply and demand in 2024, 2025 crop. But we have seen three crops of deficits. That's why the inventories have come down quite massively. But typically, these commodity markets, they kind of exaggerate, right? Because you have speculation, etc.
So it was probably a bit exaggerated going up. So we'll now see what happens. But to predict what happens this year is really difficult over the midterm. That's why our statement is more about the midterm. We are expecting rather a decline in the cocoa market because in South America, for example, they are planting lots of new trees. So there will be more supply, but that takes some time.
Flat or slight decline in prices?
For this year, difficult to predict. I would say for the midterm, yes, we definitely expect a decline. But not necessarily a price that goes down again to 2000, where it was for a long time. We believe it will be higher than that also going forward.
Mr. Kowalski, as you have the mic already. Sorry.
I would follow up on this. Could you remind us by how much you've increased your prices in 2024? And for 2025, if I'm correct, you said double-digit. Is it towards the lower end of double-digit or higher end? And how will you negotiate that with supermarkets? Because in France, for instance, where it's negotiated annually, it's been a very, very tough decision. So if you could give us an indication on how negotiations with supermarkets are going.
To follow up as well on production, in the U.S., you have some factories in the U.S., but unlike a concrete company that supplies resources locally, all your raw materials are not grown in the U.S. The cocoa beans are not in the U.S. You have a lot of packaging as well. How are the tariffs going to impact you?
First question. For 2024, I can give you a precise answer. As it was also presented, it was 6.3% the price increase. For 2025, we cannot give you a precise answer because we even don't have it at the moment. As you mentioned, the negotiations with our trade partners are ongoing. For example, in France, we had to close them by the end of February. It is even regulated by the law that by the end of February, the annual negotiations have to be closed.
So we closed with our trade partners in France these negotiations, and they accepted the price increase. To your question more general, all our retail partners or trade partners also sell private label. So they have full transparency about the cost calculation. And if you observed the price changes in the market, you will find out that private label was forced to increase prices much more than we were forced because their calculation is different.
So for the retail partners or the trade partners, it's not a surprise when we come with a demand for price increases. They are well aware of the situation on the raw material market. But we have different rhythms of price increases. So for example, in the U.S., the final price increase will be negotiated only by the end of April. In other markets, it's mid of the year.
In other markets, it's beginning of the year, so today, it's too early to tell you where we are in the year the price increases will end. It's also not only an increase of list prices, but at the end of the day, it's a combination of list price increase, promotional depth, promotional frequency, so it is more or less something that will crystallize throughout the first half of the year, what the exact amount will be, then to the last question, tariffs and packaging material. Martin, do you want to take over?
Yes. I mean, if you look at the big raw materials, it's of course cocoa. This is coming from Ecuador and from West Africa, so far, there's been no discussion about tariffs on that. Of course, you never know if it changes, but for the time being, there's no plans, I think, there.
Then the other big raw materials, they are milk and sugar. And milk is domestic in the U.S., 100%. Sugar is to a great extent domestic. So no problems there. And then also packaging. Packaging would be too expensive to ship from far away. So packaging typically is even close to your factory to avoid these transport costs, to avoid negative emissions. So basically everything local, you could say, with very few exceptions, let's say. So from that viewpoint, we're actually not too worried.
I've got two questions. First one is follow-up on tariffs. Canada announced today that they will have revenge tariffs of 25% of all U.S.-manufactured products. So I assume that must affect you. And the second question would be to Dubai Chocolate. To what extent has this been relevant in sales last year? And what do you expect for this year?
First question, absolutely correct. Mr. Kowalski, while the tariffs in the US have a minor impact, the tariffs in Canada will have an impact. But we have been alerted and we have prepared. So first of all, we have increased our inventory because, in fact, half of the volume that we sell in Canada is sourced from the US and half of it is sourced from Europe.
So we have increased inventories from the products that we source from the US. And at the same time, we prepare to transfer the volumes that are sourced from the US to Europe. So still, it will have an impact because the transportation across the ocean, of course, has some cost impact, but the impact is significantly lower than if we would source, let's say, 100% from the US. The second question, relevance in sales of Dubai Chocolate, a clear answer.
Last year, the relevance in sales was zero. It was a limited edition. It was handmade. It was a huge way to build awareness, sympathy, connection also to a younger target audience that we normally do not reach with our product. So this had a strong value for us, but it was not visible in sales figures. For this year, it will be a substantial impact.
I can tell you, I'm monitoring personally the forecast country by country and have a lot of conversations with the individual CEOs, and the forecasts increased day by day. So it will be a major innovation and have a strong contribution also to our sales performance in this year.
Benjamin Weinmann, CH Media, I have three questions. How much of the negative development in North America do you attribute to GLP-1 medication? Second question, what are your plans for Ghirardelli, which in terms of growth outperformed Lindt in North America last year? And third question, in the past, you mentioned DEI in your presentation a lot. Now you didn't. Does that have anything to do with the Trump administration?
Okay, let me also start with the last one. Easier to remember. I do not remember that we mentioned DEI a lot in our presentations. I thought the structure was pretty similar. But to your question, we have a code of conduct. We have our corporate culture. And this corporate culture, we never had any space for discrimination, no matter which background or whatever. We have a culture where people should grow due to their performance, no matter what their background is.
This is clearly stated in our purpose and mission statement, and we will continue with this like we did in the past years. Plans for Ghirardelli, also clear. You mentioned it. We want to grow stronger with Lindt. It shouldn't be that Ghirardelli outperforms Lindt. There is no reason because Lindt is the brand with the biggest muscle, I would say, with the pipeline of innovations, with the strong advertising where we can also capitalize all the international developments.
It used to grow stronger than Ghirardelli, and we are happy that Ghirardelli had a good run last year. Of course, we have a competitive mindset in the Lindt U.S. organization, and I've been there just two weeks ago. Of course, they want to outperform Ghirardelli again. As long as both brands are growing, we are happy.
Both brands have great preconditions to grow because Ghirardelli has a completely different product portfolio to Lindt, and it's really complementary. How much of the negative development in the USA is because of GLP-1? I think we can both answer on this. We have some studies. In a nutshell, 12% of the American population ever tried GLP-1 medication.
We have to remember it's still an injection. It's still very expensive. It is several hundreds of dollars per month. Only 6% use GLP-1 medication on an ongoing basis. And from these 6%, studies say that they reduce their calorie consumption by around 6%. If you multiply this 6 times 6, you see it's a very small impact on the overall calorie intake of the population.
In fact, there are other studies that say that some categories are impacted stronger than others, and chocolate is certainly one of these categories. However, we also have to differentiate between mass chocolate, these snacking products, or a conscious premium indulgence like we sell it, this moment of bliss. And we believe that even those few customers or consumers who use GLP-1 medication on an ongoing basis, they still will strive for some quality in their life. And this is when they come into our turf. Martin, do you want to?
No, I think in a nutshell, we do not expect a big impact from GLP-1 for the time being.
Mr. Ritter.
Johannes Ritter from the Frankfurter Allgemeine Zeitung. One follow-up on the double-digit price increases you're planning. Nestlé really found out that they did too much in raising these prices and they lost volume. Aren't you afraid that this could happen to you as well this year with this strong price increase? That's the first question.
Then I would like to come back to your slow growth rate in the U.S. Do you think this is also due to this lawsuit you had in the U.S. concerning heavy metals in dark chocolate? Did this have an effect? And you settled this lawsuit. How much did that cost you? And last question, looking forward, Easter time, the Easter date is later this year. So will this give you a boost in sales?
It should give us a boost in sales, at least in North America, as these pre-shipments did not take place. Otherwise, we measure about decades what is the impact of the Easter date on the business, and we did not really see a correlation.
So altogether, it doesn't really matter if it's one week before or two weeks later. So we don't see a big boost. But in the U.S., yes, we had a shift last year, and we don't expect a repetition of this shift this year. Slow growth in America due to lawsuit? Certainly not. This lawsuit had no public awareness at all. And the lawsuit was not a Lindt lawsuit.
It was a class action across the whole industry. And it was even surprising that we were part of it because normally they go against the big boys, as we say, and suddenly we were also on the list. So it was even surprising to us. And we could settle it for little money because the accusations were completely wrong. All our products were way below the thresholds that are legally given for these substances.
This was a very short discussion, and we could settle it. And the last point, double-digit price increase, are we afraid? In the last three years, we increased prices combined by 30%, and our volume was stable or even slightly growing. So it demonstrates that we have strong brands, resilient consumers and brands.
And in addition, we have such a strong business model to grow that, of course, the growth came slightly down in volume, but we are still able to grow the top line. And the other question is, what would be the alternative? And we believe if you give away too much margin now when cocoa prices are increasing, you will never get it back when they are declining because then we will stand there in front of our trade partners and have to justify why prices are high.
So altogether, we believed A, there is no alternative then protecting also the margins. And B, we have strong brands, and we believe in excellence in execution. Our teams are keen to grow. They are keen to perform or to convince our consumers with better execution on the POS, with emotional presentation. I give you an example in our retail stores where we have the full presentation under control. We don't see any price elasticity at all because consumers, they are mesmerized by the experience, and they don't look for the price. They look for this experience and for the indulgence.
And then I would also add, I do not think that the growth in the U.S. was slow in North America because actually the market was flat and we grew without a run of 6%. We actually gained market shares in value and in volume in the U.S.
I think it was actually a strong performance in a difficult market environment. Going forward, I think at some point in time, of course, we will accelerate again. I think it was actually a strong performance. Bear in mind, our guidance is 6%-8% for the group. With the 6%, we were even in a difficult environment at the lower end of the 6%-8%. I think in a difficult, if you look behind the numbers, I actually think it's a strong performance in North America.
Sorry, one more follow-up regarding the price increases with a very concrete example at the retailer Coop in Switzerland. Half a kilo of Lindor balls costs almost CHF 24 now. Where do you think in your gut feeling maybe, where's the tipping point? CHF 30 for half a kilo?
I have no answer to this. I think, you know, I give you another example. It's in my mind. I believe that chocolate was selling at too low prices for many, many years. We had even a deflation in the market. I remember when I joined Lindt and Sprüngli, the typical, as you call it, a sweet spot or tipping point was EUR 1. Everyone was afraid to cross EUR 1 with its tablet.
And for many, many years, this EUR 1 was a magical threshold. At the same time, if I go out to the real world and order a cappuccino in Starbucks, I have to pay CHF 7. And today, one tablet of Lindt chocolate is between CHF 3 and CHF 4. And I ask you why?
What is the perception of a consumer for a cappuccino that you drink in 40 seconds or for a tablet of chocolate that you can enjoy a full week? So I think there is still room that a quality product like chocolate, which is a product with natural ingredients from all over the world, can have a higher value and a higher price than it has currently.
Matthias Benz from NZZ. Another question to price increases. Actually, last year in the U.S., has your sales volume declined also because of high prices? And the other question is on inventories. Some of your competitors had to spend a lot more money because of high cocoa prices on their inventories. That doesn't seem to be the case with you. Why is that so?
I mean, the inventory question I can take, it's relatively easy. You know, one year ago and we also talked about that. I mean, first of all, we have to think about our process. We are one of the only ones that buys cocoa beans, right? Most of our peers, they actually buy chocolate mass from Barry Callebaut, from Cargill, you name it. We are buying the cocoa beans.
One year ago, because of actually a fear, let's say, that there is going to be a certain constraint in being able to buy enough cocoa beans, we went quite long on cocoa beans. So we were much longer in terms of our physical inventory of cocoa beans than usual. This was really just a risk mitigating measure. In 2024, because we could see that we have good access to cocoa, etc., good contracts with suppliers, so we were able basically to lower the inventory of cocoa beans.
I mean, that's the simple answer. And we were able to go back to a typical coverage, which we would normally have in terms of how many months of cocoa beans we want to have at hand. So that's the key reason for that.
And I would like to tackle the first question. It was also our suspicion and say, why is the U.S.-American market so weak? Did the players increase prices disproportionately? The answer is clearly no. The U.S. market declined 5% in volume and was flat in value. So this means there was a 5% price increase. And that's lower than it was in Europe, but the European chocolate markets grew substantially. So what we have seen is that the sentiment of the U.S. consumers dipped more than in other areas. I also asked what is different to Europe.
I mean, the inflation has been more or less similar. And by the way, it's coming down. So it's a late reaction to this inflation. I think the biggest difference is that the level of debt that the U.S.-American consumers have is significantly higher than for the European or other consumers. They have credit card debts.
They have mortgages on their houses. And the high interest rate was biting them harder than the inflation, let's say, in the grocery stores. And this is why they really cut back on spending. In addition, what we also saw, the retail partners, the trade partners, when they saw the price increases, they also deprioritized partly chocolate and were pushing cheaper categories like candies or wafers.
I think here we could also have some good constructive discussions with our trade partners that we have evidence and proof from Europe that with good support of the category, you can also grow with increased price levels. But our volumes were flat. I mean, if that was also the question, the market was negative, but we were flat in terms of volumes more or less in the US. Sorry, there's another question.
Sorry. Milena Kälin from Blick. I have two questions. You plan to sell more Dubai Chocolate, but it still will be limited. So where can the customers buy it? And the second question would be also about the prices. You already told that you negotiated with the retail partners. And I wonder, are there big differences between the countries? Perhaps you can make a Beispiel. Can you confirm if the price increases for this year will be double-digit or not? Because I heard it, but I'm not quite sure.
Okay. Let me start with your first question. Where can consumers buy Dubai Chocolate? Because that's important for your readers. The first customer in Switzerland, and without making advertising now for someone, will be Coop. He will have exclusivity for a period of time.
He will be the first customer to sell it in a wide distribution. As I understand, it's not literally every Coop outlet, but more or less 90%. This will be, and this will happen pretty soon. I think end of March or mid of March. Prices are negotiated with the wholesale partners. Are there big differences between countries? You know, we have already huge differences from category to category.
A tablet with 70% or 85% cocoa has a completely different cost structure than a Lindor or a Gold Bunny. It depends on the portfolio that a country offers. Some countries are strong in seasonal business. Some countries have more milk tablets. Other countries have more dark tablets. The portfolio determines already the price increase. Then you have also other cost factors to be considered. Yes, there are differences from country to country. But it is, let's say, every country has to come up with its own calculation.
Hi, I'm John again. Just a follow-up to my earlier question. If the tariffs lead to a generally more inflationary environment than in the U.S., will that actually lead to more, sorry, less consumer demand because of prices of everything, kind of cheeseburgers, whatever thing else, going up because of tariffs?
So therefore, people will have less money for Lindt chocolates. That's the first one. And then secondly, you mentioned that the tariffs, like the kind of revenge tariffs from Canada, could affect the Canada market because you supply Canada from the U.S. Are any other markets in the Americas supplied from the U.S.? So I know if Mexico was to respond, would that be affected by sort of countermeasures or anything like that? Because I know the U.S. is not going to be affected by the U.S. within itself, but anywhere else does the U.S. supply to, and then they could be hit by counter tariffs. Thank you.
So first of all, Mexico is a very small portion of our business, while Canada is a significant portion. And as mentioned, the volumes that we source currently from Canada can all be shifted to Europe. So far, we have a plan B to avoid these tariffs also in Canada. The first question, inflation, can always have an influence on consumer behavior. The good thing is we are in food business. At the end of the day, people have to eat.
Let's say what we also experience. If inflation kicks in, the first expenses that you cut are not necessarily the expenses in a supermarket. You probably go out less often to a restaurant because in one visit in a restaurant, you spend what you normally spend in a week in the supermarket. You probably cut back your expenses on refurbishing your apartment, your expensive vacation whatsoever.
I would not say necessarily that this means that chocolate consumption is declining. Chocolate is also the small little treat, you know, that you have in bad times. And especially premium chocolate, as we are standing for indulgence and gifting. So we could even see the opposite.
And you said about the Europe plan, would that be to supply Canada then from Europe?
Yes.
If I may, I will have a few questions around Easter. If you could tell us how much Easter represents in the annual turnover. And if I'm not mistaken, you were talking about the chocolate bunnies. If I'm correct, they're made in Aachen in Germany. The tariffs. It's big in your press release. You explain that hollow figures are part of the keys to success for the increase in sales. What does that mean? If you have to ship these from Germany to the U.S. with tariffs, how is that going to impact Easter? And my last question around Easter is you talked a lot.
The big question with the pricing increases is how the consumers are going to adapt to, how are they going to react to that environment? If you could explain to us through the example of Easter, what you've seen so far, you talked about the consumers either going towards cheaper private label or more premium ones. If you could explain to us what you're expecting for Easter, how are the consumers adapting to this? And what are the kind of products that make people still want to buy some Lindt chocolate? How do you adapt your product range?
So first of all, all Easter products to the U.S. are shipped already a long time. So the tariffs that are valid as of today have no impact on this year's Easter business. And if these tariffs are still around next year, it remains to be seen.
Total size of the Easter business is in the area of 5%-10% of our total business. So it is not the major bulk of the business. What is important to mention, most of our products are available in different sizes. So we have the Easter bunny, for example, from a 10-gram bunny, which is supposed to be a decoration item, to a 50-gram small bunny, 100-gram, 200-gram.
We have a 500-gram, and you can see on top even a one kilo. So I think we have a product offer for every wallet. And if, let's say, certain price thresholds, as you have mentioned in your question, are, let's say, crossed, then consumers can still make their choice and say, "I go for a smaller size." The same is, by the way, true for Lindt.
We offer Lindor in different sizes, be it for self-consumption or for sharing or for impressive gifting. So I think we really offer a choice in different price points, different demand occasions, and therefore we are not too much worried. And then there is another point. When it comes to gifting and when it comes to seasonal events, we see a significantly lower price elasticity than when it comes to everyday snacking, where you also remember the price points. Most of the customers do not remember what they spent one year ago for their 100-gram Gold Bunny. Did we miss out on? Actually,
it's okay.
Jan Bolliger, Tages-Anzeiger. I have two questions. First question is, you said you have to increase prices because of the high cocoa prices, but at the same time, your margin gets better every year. So there could be a perception from consumers that you kind of overraised the prices for your own margin. First question. And second, last year you joined ICI. Why did it take you so long to join ICI?
Let me start with the first question, and then I will hand over to Martin. So I'm thankful for this question because what you state is not true. Our margin did not improve. The opposite. Martin has mentioned that the material costs have substantially increased in our calculations.
So it means we have compensated with other expenses, with savings in other areas, the loss of margin on the gross margin. So otherwise, you would be right, and we could say, "Oh, we have increased prices higher than the raw material cost increase burdened us." No, it's not the case. The opposite is the case.
We have improved the profitability, but this is due also to a different mix. You have seen that the U.S. has improved, that our retail business has an ever bigger impact on the total profitability, that we were saving in other areas, ratios were coming down. So that's the answer to the first question,
and it's a lot, actually, if you think about it. We have lost on the material ratio 200 basis points. I mean, that brought us from 15.6 last year to 13.6, and from there, we started again. So actually, we were not able to pass through the price increase to the consumer entirely in reality. So I think that's important. In terms of the ICI, you know, we chose to first roll out our CLMRS, so this Child Labor Monitoring and Remediation System, in the countries jointly with our suppliers.
Our goal is to reach 100% by 2025. We did not see a reason to join ICI before we have even rolled out the CLMRS. We rolled it out, and now that we have rolled it out, together with them, the expert organization to battle or to tackle child labor. I think it's the right timing now to work with them and get even better.
Okay. One more? One last question, I would say.
[Foreign language] Just one question because of Easter coming up. You mentioned the Gold Bunny. Is the Gold Bunny, and you mentioned that people don't remember the price they paid for it last year. This year, how much more expensive is the Gold Bunny in, say, Germany?
In the area of 10%.
Okay. Thank you.
Thank you. Okay.
If there are no further questions, and I see Rachel is correct, there are no questions from the live stream and from the webcast. In this case, I thank you very much for your intention, for your interest, for your.