The maker of Lindor chocolate balls and gold-foil wrapped bunnies said it expected the economic situation to recover slowly in 2014, but high raw material prices and sustained price pressures in retail would continue to pose challenges.

"Thanks to continuous investments in the brand and in the markets, Lindt & Spruengli is perfectly equipped to master these challenges and to attain its long-term strategic goals again in the financial year 2014," the group said on Tuesday.

Chocolate makers faced sluggish growth last year, but Lindt has fared better than many rivals as it can generate high growth rates in markets where it is still small and is also still winning market share in its biggest market, Europe.

Net profit rose 23.7 percent last year to 303 million Swiss francs ($345 million), Lindt said. Its operating margin improved to 14.0 percent, from 12.4 percent the year before.

In January, the company posted a better-than-expected 8.6 percent rise in underlying sales for 2013 on the back of double-digit growth in North America, where it is expanding from a low base.

The group's global retail division, with some 200 outlets, boutiques and Lindt chocolate cafes, is growing steadily and represented around 9 percent of group sales in 2013.

"Own distribution concepts are vitally important, especially in gaining access to new markets with no strong chocolate tradition, in order to establish the premium brand values of Lindt and enhance familiarity with the brand," the group said.

It said on Tuesday it had set up its first own subsidiary in South America via a joint venture with Brazilian chocolate maker CRM Group as it continues to expand in emerging markets.

Lindt shares, which have risen more than 10 percent this year and climbed 35 percent last year, are trading at almost 30 times forward earnings, a large premium to Barry Callebaut at 20 times.

The group's new share buyback programme initiated in autumn last year will be completed by the end of 2014, Lindt said.

Lindt said it would propose a 13 percent increase in its dividend to 65 francs per participation certificate and 650 francs per registered share.

($1 = 0.8781 Swiss francs)

(Reporting by Silke Koltrowitz; Editing by Mark Potter)