Emmi sees sales, earnings increase

7 Mar 2018

Swiss dairy group Emmi increased its sales by 3.2 % (0.5 % in organic terms) to CHF 3,364 million in 2017. Earnings before interest and taxes (EBIT) rose by 1.6 % to CHF 206 million.

Emmi sees sales, earnings increase

Swiss dairy group Emmi increased its sales by 3.2 % (0.5 % in organic terms) to CHF 3,364 million in 2017. Earnings before interest and taxes (EBIT) rose by 1.6 % to CHF 206 million. Net profit amounted to CHF 162 million, 15.1 % higher than in the previous year. This significant increase in net profit, the company said, is primarily attributable to the reduction in minority interests.

Despite the competitive environment, growth of 1.5 % to 3 % is realistic for 2018, and Emmi has slightly raised its medium-term forecast for the net profit margin.

Urs Riedener, CEO Emmi Group, said: “Emmi made up a good deal of ground in the second half of the year, boosted by the good sales performance in the US and Tunisia, a well-functioning cheese business and more favourable economic conditions. Our earnings were also supported by the efficiency programme currently running in Switzerland and several international subsidiaries.”

The global economy has accelerated, Emmi notes, which it says will benefit the growth markets of Emmi’s business division Americas in particular. The company expects a continued increase in demand in Tunisia and the US, while the Chilean market should also confirm signs of a recovery. Foreign currency effects in countries such as Chile, Mexico and Tunisia will continue to be an issue, however. In addition, the European markets in this division (Spain and France) will once again inhibit growth this year.

Although the economy in the eurozone is expected to grow in 2018, Emmi’s forecast for the business division Europe takes account of several inhibiting factors such as continued strong competition, the consequences of Brexit and the performance of the British pound. This will affect the performance of Emmi’s UK business (Onken yogurts, exports from Switzerland and dessert exports from Italy). Combined with the recent appreciation of the euro, this business division should make a positive contribution to sales performance overall, taking into account all markets, Emmi said.

Given favourable conditions, sales growth may also be possible in Emmi’s home market of Switzerland in 2018, the company said. This is supported by the outlook for Swiss retailers, which ranges from stable to at best slightly increasing sales in the food sector, as well as by the higher milk price (price increase on 1 October 2017) and strong brand concepts. There is still massive import pressure, however, and retail tourism remains at a stable, high level. There are therefore considerable challenges to be overcome if the company is to achieve sales growth, Emmi said.

Overall, Emmi expects organic sales growth almost in line with the medium-term forecast in 2018.

To support earnings, Emmi will also continue its efficiency and cost-saving programme and step this up above all at its international production sites. We therefore expect operating profit to be higher year-on-year in 2018.