September 2, 2010

FrieslandCampina reports increased revenue and profit in H1

Royal FrieslandCampina N.V. enjoyed a positive first half year of 2010; compared with the first half year of 2009, revenue rose 5.5% to EUR4.3 billion (US$5.5 billion), while profit doubled to EUR156 million (US$198 million).

In particular, the sale of basic and special ingredients to the food industry and consumer products in Asia and Africa contributed to the positive results. Brands such as Frisian Flag (Indonesia), Peak (Nigeria), Foremost (Thailand) and Friso (baby and infant foods) did extremely well. Within cheese, Noord-Holland and Milner cheese performed well.

The guaranteed price for milk supplied by the member farmers of FrieslandCampina rose by 16% to EUR30.25 (US$38.36) per 100kg of milk. The performance payment based on the first half year will be EUR1.33 per 100kg of milk. Thus, the pro forma milk price (guaranteed price plus performance payment) amounts to EUR31.58 (US$40.04) per 100kg of milk.

Cees't Hart, CEOof Royal FrieslandCampina, is satisfied with the performance in the first half of 2010. Hart said, "We are doing well in the market. Furthermore, the strong rise in profits is clear proof of the success of the merger. As a merged company, we are able to take advantage of the developments in the market more easily. We are therefore ahead of realising our synergy goal."

"Volume growth in Asia and Africa is progressing well. Particularly in Asia, we were able to gain from the economic recovery and pass on the increased raw material prices through to our selling prices," Hart commented. "The lower exchange rate of the euro compared with many local currencies and the dollar was also beneficial. With the growing demand for dairy products around the world and the slight drop in the supply of milk, the price levels for products such as milk powder and foil cheese recovered well compared with the poor performance in 2009."

"This is also reflected in improved profits of the business groups Ingredients and Cheese & Butter, where Ingredients now has a positive operating profit and Cheese & Butter has narrowed the loss," Hart said. "The development of consumer activities in Europe is however disappointing. In this region both revenue and profit growth are under pressure. The economic recovery in Europe lags behind developments in other areas in the world. In addition, there is fierce competition and consumers continue to be cautious with their spending."