Weekly Roundup: Emmi sales rise 2.9 percent, dairy farmers rewarded for sustainability efforts
01 Feb 2019 --- This week in business, Emmi increased its group sales by 2.8 percent and the Swiss milk processor’s organic growth hit a four-year high. In the same week, the company announced it is to sell its trading and supply company Emmi Frisch-Service AG to the Transgourmet Group. Dairy farmers in the province of Drenthe, in the Netherlands, are to be rewarded for their sustainability efforts in the area of biodiversity. Coca-Cola completed its acquisition of beverage supplier Chi Ltd. in Nigeria and Conagra Brands appointed Scott Ostfeld to its board of directors. Finally, CP Kelco announced it is seeking a buyer for its carboxymethyl cellulose (CMC) plant in Taixing, China.
In brief: Business
The Hershey Company reported its net sales and earnings for Q4 and full year ending December 31, 2018. Consolidated net sales were US$1,987.9 million in the fourth quarter of 2018 versus US$1,939.6 million in the year ago period, an increase of 2.5 percent. The net impact of acquisitions and divestitures was a 3.0 point benefit, volume was a 0.9 point benefit and net price realization was a 0.8 point headwind. The company’s fourth-quarter 2018 results included items impacting comparability of US$56.1 million, or US$0.34 per share-diluted. For the fourth quarter of 2017, items impacting comparability totaled US$7.0 million, or US$0.17 per share-diluted. Michele Buck, Hershey President and CEO, notes: “The strategic investments we are making in our core confection business have resulted in improved retail trends and margins. Our recently acquired snacking brands continue to generate strong growth and delivered against our financial objectives. And our International business generated a record year of profitability. We are excited to build on this momentum in 2019.”
Emmi has increased its group sales by 2.8 percent to CHF3,457.4 million (US$3.5 million) in 2018. In organic terms, this resulted in a growth of 2.3 percent, the most substantial increase the company has seen since 2014. This growth was broad-based across the business divisions Switzerland (+0.6 percent), Americas (+5.6 percent) and Europe (+4.4 percent). The business division Switzerland performed slightly above expectations, while the business division Europe significantly exceeded expectations. Success factors included Emmi Caffè Latte (Switzerland and abroad), Italian specialty desserts, international goat’s milk products, particularly in the US and the Netherlands, and dynamic development in Tunisia and Chile, according to the Swiss milk processor. Emmi CEO Urs Riedener says that the company is “pleased” about the organic growth. “With the focus on brand expansion, the good performance of niche areas such as Italian specialty desserts and goat’s milk products, and the upswing in the emerging markets of Tunisia, Chile and Mexico, we are also achieving the right quality of growth. We anticipate that the acquisitions made in recent years will continue to strengthen our sales performance.”
In brief: Acquisitions
In the same week, Emmi announced that it is selling its trading and supply company Emmi Frisch-Service AG to the Transgourmet Group. Emmi Frisch-Service AG is a national trading company that was formed from the merger of Burra and Interfrais. It supplies around 4,000 businesses (food service providers, hospitals and nursing homes, convenience stores, retailers and wholesalers). The purpose of the business was to supply Emmi products to the many independent companies that could not be reached by other means. In the Transgourmet Group, Emmi reports it is pleased to have selected a buyer with the know-how to integrate the business of Emmi Frisch-Service AG effectively and continue it successfully in the long term. All of the business’s 160 employees will also be transferred. The transaction is subject to approval by the competition authority. The parties have agreed not to disclose the purchase price.
Coca-Cola has completed its acquisition of Chi Ltd. in Nigeria. The soft drinks giant first announced a minority investment in Chi three years ago and has now acquired full ownership of the company. Chi is recognized in West Africa as a fast-growing leader in expanding beverage categories, including juices, value-added dairy and iced teas. The company, founded in Lagos, Nigeria, in 1980, produces juice under the Chivita brand and value-added dairy under the Hollandia brand. Coca-Cola acquired a 40 percent stake in Chi in 2016 from Tropical General Investments Group, the holding company for Chi Ltd. Juices and value-added dairy categories rank among the fastest-growing beverage segments in Nigeria and Africa, according to Coca-Cola.
UK-based 2 Sisters Food Group has completed the sale of its Manton Wood sandwich business to Samworth Brothers. Following confirmation of their intention to sell on 31 October, 2018, the transaction received CMA clearance in December 2018 and has now been finalized, allowing the business to focus on strengthening its core operations. The facility, located at Manton Wood, Nottinghamshire, in the UK, produces a range of retailer chilled sandwiches, wraps and rolls.
Margarita Louis-Dreyfus, Chairperson of Louis Dreyfus Company Holdings B.V. (LDCH), has announced that on 25 January, 2019, the group’s majority shareholder completed the buy-out of the minority shareholders. The transaction brings Akira’s stake in the group to 96.2 percent. “The buy-out turns a page in the group's history to a new and exciting chapter,” comments Louis-Dreyfus. “I am grateful for the heritage that is ours today. With a stable ownership structure in place, a clear strategy for our next growth phase and a strong management team, we are well positioned to write our next chapter and fulfill our purpose of creating fair and sustainable value for the long-term,” she adds.
In brief: Sustainability
Dairy farmers in the province of Drenthe, in the Netherlands, can now receive more remuneration for their efforts in the area of biodiversity. The province of Drenthe and Rabobank have agreed to grant rewards on the basis of similar biodiversity criteria to FrieslandCampina. Frans Keurentjes, Chairman of FrieslandCampina, says: “All our members in the Netherlands, Belgium and Germany who score well on biodiversity will be rewarded from this year onwards.” Keurentjes also believes that there are more parties – governments, businesses and consumers – welcome to reward dairy farmers for their efforts. “We are committed to that. We are therefore pleased to see that the province of Drenthe and the Rabobank are taking these steps and would like to invite more parties to take part,” he says.
In brief: Appointments & retirements
Conagra Brands has appointed Scott Ostfeld to its board of directors, effective 16 February, 2019. He will also join the Human Resources Committee of the board, notes the company. Ostfeld is a partner of JANA Partners LLC, which has been a long-term investor in Conagra Brands. “We are pleased to welcome Scott to the Conagra Brands board of directors,” says Rick Lenny, Chairman of Conagra Brands. “As a significant Conagra Brands shareholder for many years, Scott provides valuable perspective and a deep understanding of the industry, our business and the opportunities we have as we navigate this time of transformation and deliver superior shareholder value over the long-term.”
In brief: Other highlights
Finally, producer of specialty hydrocolloid ingredients, CP Kelco is seeking a buyer for its carboxymethyl cellulose (CMC) plant in Taixing, China. According to the company, CP Kelco is not exiting the CMC business and continues to operate a CMC production facility in Äänekoski, Finland. Utilizing its deep applications expertise and technology, the company remains committed to providing the global market with high-quality CMC products, now and in the future.
By Elizabeth Green
