Emmi Reports Broad-Based Growth in Switzerland and Abroad

6 Feb 2014 --- In the 2013 financial year, Emmi generated net sales of CHF 3,298.2 million, which corresponds to 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.
 
Emmi generated net sales of CHF 3,298.2 million in 2013, which corresponds to an increase of 10.6% on the previous year (CHF 2,981.2 million). In organic terms, i.e. 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 1 January 2014, we took another important step towards further strengthening our business in Switzerland and abroad.”
 
In the Swiss market, net sales rose from CHF 1,842.1 million to CHF 1,863.1 million. It is highly encouraging to note that this was achieved despite a negative acquisition effect overall (negative effect from sale of Nutrifrais holding, positive effect from the acquisition of Käserei Studer)  and despite the passing on of the frozen goods logistics business to third parties.
 
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 CHF 1,435.1 million (2012: CHF 1,139.1 million), 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.
 
The international acquisition effect is attributable to the increase in the stake in the Spanish firm Kaiku (from 1 July 2012), the acquisition of the French firm Diprola (from 1 July 2012), the stake in the Dutch firm AVH Dairy Trade (from 1 January 2013), as well as the acquisitions of Käserei Studer (from 1 July 2013) and Rachelli (from 1 August 2013). In local currency and adjusted for acquisitions, growth amounted to 2.0%. As mentioned above, sales were inhibited by low butter and milk powder exports to decrease pressure, which fell by CHF 30 million versus 2012. Disregarding this irregular business, growth amounted to 4.8% (in local currency, adjusted for acquisitions). The share of the international business increased further to 44%.

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.