Strong Sales of Italian Desserts Help Emmi Report Profits up Over 30 Percent

23 Aug 2016 --- Strong sales of Italian desserts and Caffè Latte in its Americas business helped Emmi report that its profits were up over 30 percent to 60.8m Swiss francs in its financial first half year results.

But, the Swiss company lowered its sales expectations for the year, amid difficult economic conditions in Spain and Chile and low milk prices in the US.

Emmi now anticipates sales growth of between -1 percent to 1 percent compared to previous guidance of between 0 percent to 1 percent.

Switzerland’s largest milk processor, which acquired California-based dairy company Cowgirl Creamery Corporation, earlier this year, reported sales of 1.6bn Swiss francs in the first half, which was around level with the previous year. Profits were up 32 percent.

Urs Riedener, CEO of Emmi, said: “The half-year sales reflect the challenging economic environment and the strong competition, with high milk volumes being one of the reasons. The profit development is the result of improved earnings abroad and the strong position in niches.”

“The international subsidiaries contributed again to the profit increase. A further earnings uplift resulted from the more recently acquired companies.”

In its native Swiss business, which accounts for 54 percent of total sales, sales were down 2.4 percent year-on-year to 853m Swiss francs, primarily due to declining retail business, low milk prices and tough competition.

However, there were some high points, such as growth of fresh products such as Caffè Latte and Energy Milk.

In its Americas business, which includes the US, Canada, Chile, Spain, France and Tunisia, sales were up from 387.3m Swiss francs to 416.4m Swiss francs.

However, growth in Americas was below expectations, mainly due to low milk prices in the US.

In its cheese business, locally produced goat’s cheese in the US and exported cheese specialities from Switzerland recorded growth. Fresh products and dairy products benefited from strong sales in Tunisia.

By contrast, sales growth in cow’s milk cheese produced in the
US remained modest due to the low milk prices.

Sales in Chile were stable, while those in Spain declined slightly, with the exception of the lactose-free range.

In Europe, which accounts for 16 percent of sales, sales came in at 254m Swiss francs, up over 10 percent.

The fresh products (primarily Caffè Latte and Italian desserts), cheese (exports of speciality cheeses such as Kaltbach and Der scharfe Maxx) and dairy products (Gläserne Molkerei, Germany) segments had positive impacts on the results.