Campina improve in 2005

Net turnover in 2005 rose to EUR 3,569 million, EUR 10 million higher compared to the previous year. This, despite pressure on prices in the home market.

20/03/06 International dairy co-operative Campina has reported that product innovations, profitable growth outside the home market and efficiency improvement (net turnover + EUR 10 million to EUR 3.569 million) have ensured satisfactory annual results in 2005 . Campina again improved its result and almost fully compensated for the strong price pressure in Western Europe, rising energy costs and strongly declining subsidies. The investments in the past years in international growth, innovation and efficiency are bearing fruit. Campina has realised profitable growth in Russia, Greece, Spain and the United Kingdom, among other countries. There were successful innovations in the home market, such as Campina Valess, Campina VlaFlip and Campina Optiwell pudding and a large-scale efficiency operation resulted in structural savings. This performance means that Campina can present a satisfactory result to its owners, the member-farmers.

Net turnover in 2005 rose to EUR 3,569 million, EUR 10 million higher compared to the previous year. This, despite pressure on prices in the home market (Germany, the Netherlands, Belgium), the sale of production and logistic activities in Poland and lower cheese production as a result of the fire at the cheese factory in Lutjewinkel at the end of 2004. These developments were counterbalanced by the positive effect of innovations by the Consumer Products Europe group in the home market, the acquisition of Aveve Zuivel, growth in countries outside the home market and turnover growth in the Industrial Products division.

Profitable growth of the activities outside the home market and cost reduction measures compensated for the decline in margins due to declining prices and increasing energy and raw material costs. In all the European countries in which it operates Campina is both successful and profitable, despite severe price competition and the rise of private labels. Campina in the Netherlands, for instance, maintained profitability through product innovation, product concentration and other cost reduction measures. Germany remained profitable thanks to various cost savings. In particular the United Kingdom, Russia and Greece proved that previous investments laid the foundation for continuity and future returns: turnover rose sharply and the results clearly showed further improvement. The activities of the Industrial Products group, too, contributed to growth. The Cheese & Butter group grew through the acquisition of milk fat specialist Aveve Zuivel and realised an excellent result.

J.J.G.M. (Justines) Sanders, CEO Campina BV on the year 2005: “For Campina 2005 has been a satisfactory year. We are clearly on track. Good commercial results are proof that Campina is performing well when it comes to growth with innovative consumer products in Europe and Asia and with specific dairy ingredients world-wide. We have achieved a good result; despite a difficult home market and a reduction in EU support of more than EUR 50 million compared to 2004, due to reforms of the European dairy policy.”

“Innovations, profitable growth outside our home markets and efficiency improvements compensated for the effects of the fierce price competition in Western Europe and the phase-out of the European dairy policy. We set a target of compensating that part of the price decline not compensated by Brussels, as much as possible. We have been more than successful in doing so. Including the premium from Brussels the milk income for Campina members increased with EUR 1 per 100 kg of milk.”

Campina said that a future decline in the milk price seems unavoidable in the light of choices made by European and national governments. Campina will uphold its objective to compensate the price decline for its member-farmers as much as possible. Campina therefore opts for further cost optimisation, organic growth through innovations as well as acquisition-driven growth in the field of consumer activities in Europe, the Middle East and Asia and for ingredients world-wide.