Emmi New Profit Rises Slightly, Withstands Impact Strong Swiss Franc

18 Aug 2015 --- Swiss dairy Emmi has generated sales of CHF 1,563.0 million ($1.60 billion) in the first half of 2015, (previous year CHF 1,624.9 million), a drop of -3.8% (organically -1.7 %). This is slightly better than expected. The company claims that it shows that Emmi has coped well with the negative trend of the euro. The overall result was an adjusted net profit of CHF 46.6 million (previous year CHF 45.2 million) and an adjusted net profit margin of 3.0 % (previous year 2.8 %).

This result exceeds Emmi’s expectations and is primarily due to increased earnings and adjustments in foreign operations. For 2015, Emmi is modifying its EBIT outlook to between CHF 170 million and CHF 180 million (forecast in March 2015: CHF 150 million and CHF 160 million).

In the first six months of 2015, Emmi achieved sales of CHF 1,563.0 million, -3.8 % (organically -1.7 %), which is below the previous year’s figure of CHF 1,624.9 million. The business divisions Switzerland and Americas performed in accordance with Emmi’s forecasts. The business division Europe performed better than expected.

With an adjusted EBIT of CHF 84.9 million compared with CHF 74.3 million (+14.3 %), the adjusted EBIT margin was 5.4 % (previous year 4.6 %). The adjusted net profit was CHF 46.6 million, compared with CHF 45.2 million in the previous year (+3.1 %), with an adjusted net profit margin of 3.0 % (previous year 2.8 %). Emmi has therefore exceeded its profit targets.

Urs Riedener, CEO of Emmi: “This encouraging performance is mainly due to the range of measures that have been consistently applied since the beginning of the year, as well as enhanced earnings in the Europe and Americas business divisions. Our goal in the second half of the year is to keep the decline in sales within reasonable limits – particularly in Switzerland.”

In the Switzerland business division, sales were 3.0 % below the same period last year at CHF 874.2 million (previous year CHF 900.9 million). This development reflects the decline in retail business, the fierce price competition in the industrial business and flagging tourism due to the currency situation.

All strategic segments in the domestic market posted a drop in sales. The decline in dairy products (milk, cream, butter) was caused by a decline in volumes and lower milk prices. Lower sales of cheese reflected a 7.8 % increase in cheese imports. The almost stable sales of fresh products are due to the good performance of Emmi Caffè Latte, Pure Swiss Yogurt and the new, protein-rich YoQua yogurt. Volumes of fresh cheese remained virtually stable, although prices dropped as a result of high import pressures. Powder/concentrates suffered as a result of the fierce price competition in the industrial business.