February 6, 2014

 

Emmi generated net sales of CHF3,298.2 million (US$3.65 billion) in the 2013 financial year, an increase of 10.6%, thereby slightly exceeding its own targets.

 

The good result is attributable to the strengthening of international business and the encouraging performance in the Swiss market, which saw organic growth for the first time since 2008, following various revisions. Success factors included Emmi Caffè Latte, Kaltbach and other cheese specialities in Switzerland and abroad, as well as the newly launched brands "Jogurtpur" (Pure Swiss Yogurt) and "good day" in Switzerland. Further positive effects were generated by recent acquisitions.

 

In organic terms, such as adjusted for acquisition and currency effects, net sales at Group level rose by 1.6%. All product segments of Emmi's core business made positive contributions. Butter and milk powder exports to reduce excess milk in Switzerland fell, due to low milk volumes. This led to a decline in sales in the first half-year, which will, however, not have a significant impact on income. Adjusted for these exports, organic growth at Group level was 2.7%, which is at the upper end of our medium-term forecast of 2% to 3%.

 

Emmi's CEO Urs Riedener commented: "Group sales performed according to plan, and in Switzerland we even exceeded our expectations. The encouraging growth in our domestic market is a clear sign that we are steering our product portfolio in the right direction, and that we have set our priorities well. With the new organisation and creation of the Switzerland, Europe and Americas divisions that came into being on January 1, 2014, we took another important step towards further strengthening our business in Switzerland and abroad."

 

In the Swiss market, net sales rose from CHF1,842.1 million to CHF 1,863.1 million (US$2 billion to US$2.1 billion).The increase of 1.1% is based on positive developments in the three high-turnover segments dairy products, cheese and fresh products. Emmi Caffè Latte again put in an excellent performance, with growth also being achieved by cheese specialities such as Kaltbach, Le Gruyère AOP and raclette cheese, and further momentum coming from the new "Jogurtpur" (Pure Swiss Yogurt) and "good day" product ranges. Adjusted for acquisitions, sales rose by 1.4%. Switzerland accounted for 56% of Group sales.

 

In international business, net sales were up 26.0% to CHF1,435.1 million (US$1.6 billion) against 2012's CHF1,139.1 million (US$1.3 billion ), with several factors contributing to this development. Emmi Caffè Latte also performed well internationally, particularly in Austria, the UK and Spain. Exports of various cheese specialities including fondue and raclette increased, and the locally produced range in the USA, as well as Chile and Tunisia (cheese, fresh products, dairy products) also performed very well.

 

In dairy products (milk, cream, butter), net sales were up 1.3% to CHF698.0 million (US$772 million) against 2012's CHF688.9 million (US$762 million). This is attributable to higher sales volumes and increased milk prices.

 

In the cheese segment, Emmi generated net sales of CHF541.7 million (US$599 million) in 2013 compared with CHF529.5 million (US$585 million) in the prior year, an increase of 2.3%. In fresh products, Emmi posted net sales growth of 1.0% to CHF345.9 million (US$382 million), compared with CHF342.6 million (US$379 million) in 2012. Positive factors included the growth of Emmi Caffè Latte, as well as the newly launched "Jogurtpur" and the lactose-free range "good day" (yogurts, drinks, drinking milk), while the declines in milk-based beverages and the sale of the Nutrifrais stake as per the end of March put pressure on sales. Organic growth, such as adjusted for disposals, amounted to a strong 4.5%.

 

In fresh cheese, net sales remained almost stable at CHF121.5 million (US$134 million) versus prior year's CHF121.6 million (US$134 million). Mozzarella prices fell as a result of significant import pressure, but the volume sold increased. Organic growth, adjusted for the disposal of Nutrifrais, amounted to 0.4%.

 

Fresh products grew by 22.1% to CHF474.7 million (US$525 million) from CHF388.9 million (US$430 million) the previous year. The Italian desserts from A-27 and Emmi Caffè Latte made a positive contribution, while the Onken yoghurts and the business of Trentinalatte in Italy saw slight declines. The acquisition effect is attributable to the increase in the stake in Kaiku and the acquisition of Rachelli. Kaiku performed very well in Tunisia and Chile. In organic terms, net sales increased by 1.9%.

 

Dairy products posted net sales of CHF283.8 million (US$314 million), in comparison with CHF154.0 million (US$170 million) the previous year. The growth of 84.3% is due above all to the acquisition effect generated by Kaiku. Growth was however held back by the sharp decline in butter exports to reduce excess milk, resulting in an organic decline of 2.7%.

 

For the first half of 2014, raw material prices are expected to be stable, or slightly higher in certain cases, and Emmi also anticipates slightly higher prices for packaging. In Switzerland, retail tourism is set to stagnate or even fall slightly, while import pressure remains high. Slightly improved consumer behaviour can be expected in the US, Emmi's most important international market, while growth is anticipated in the emerging markets Chile and Tunisia. Consumer sentiment remains muted in Southern Europe, in Italy and France in particular, while Spain is showing clear signs of stabilisation. Emmi does not expect to see any major changes in the Central European states, and is also anticipating a stable currency situation overall. Strong brand concepts in and from Switzerland, specialities produced locally abroad, continued development of recent acquisitions and consistently strict cost management, including in foreign markets, will make positive contributions to Emmi's performance in 2014.