Assets, financing and cash flow

Total assets as at 31 December 2022 increased by 6.6% or CHF 164.0 million compared to 31 December 2021 to CHF 2,635.4 million (previous year: CHF 2,471.4 million). This increase is primarily attributable to the price-driven higher net working capital as well as investments in property, plant and equipment, which were higher than depreciation.

Operating net working capital (consisting of inventories as well as trade receivables and payables) amounted to CHF 686.9 million. Compared to the previous year (CHF 589.4 million), this increased by a total of CHF 97.5 million or 16.6%, largely driven by price trends and the build-up of safety stocks in inventories to ensure the ability to deliver. In relation to sales, net working capital increased disproportionately to 16.2% compared to 15.1% in the previous year.

Non-current assets rose by CHF 80.5 million or 6.7% from CHF 1,197.5 million in the previous year to CHF 1,278.0 million. Property, plant and equipment of CHF 1,100.2 million account for the majority of non-current assets, and with an increase of CHF 84.8 million are also responsible for the increase in non-current assets. With overall slightly negative foreign currency effects, investments in property, plant and equipment – which were significantly higher than depreciation – were the main reason for the increase.

Liabilities as at 31 December 2022 amounted to CHF 1,351.5 million compared to CHF 1,289.7 million at the end of the previous year. The increase of CHF 61.8 million relates in roughly equal parts to the increase in financial liabilities and trade payables. Current liabilities rose due to the CHF 200.0 million bond maturing in July 2023, but declined due to the longer-term refinancing of bank debt that was still short-term in the previous year. With profit including minority interests exceeding distribution, the equity ratio increased from 47.8% as at 31 December 2021 to 48.7%. Lower cash and cash equivalents compared to the previous year, combined with higher financial liabilities, resulted in net debt of CHF 473.2 million as at 31 December 2022, compared to CHF 389.4 million in the previous year. The ratio of net debt to EBITDA also rose accordingly from 0.99 in the previous year to 1.25 at the end of the year under review.

Cash inflow from operating activities amounted to CHF 208.3 million in the year under review, a significant reduction of CHF 51.6 million compared to the previous year (CHF 259.9 million). While profit including minority interests was significantly below the previous year, cash flow before changes in net working capital, interest and taxes was CHF 377.2 million, a positive difference of CHF 3.1 million compared to the previous year (CHF 374.1 million). The majority of this positive variance is attributable to the impairment at Gläserne Molkerei as well as other non-cash items, where non-cash currency losses and gains are reflected accordingly. The change in net working capital had an overall negative impact on cash flow from operating activities of CHF 111.2 million in the year under review. Although the change in net working capital also burdened the cash flow from operating activities in the previous year, in 2021 the impact was significantly lower at CHF 60.0 million. The main driver of this deviation is operating net working capital, which has increased sharply due to price-related factors, but also due to the build-up of safety stocks in inventories to ensure the ability to deliver. Interest and taxes paid also dented the cash flow from operating activities by a total of CHF 3.4 million more than in the previous year.

Cash outflow from investing activities amounted to CHF 228.2 million in the year under review, compared to CHF 428.7 million in the previous year. This decrease is attributable to the significantly lower cash outflow from acquisition activities. In the year under review, this amounted to CHF 23.5 million compared to CHF 276.8 million in the previous year, which was marked by the acquisition of the Athenos business in the USA. By contrast, net investments in property, plant and equipment were up sharply to net CHF 198.3 million versus CHF 147.0 million in the previous year.

Not including cash flow from acquisition activities, the level of free cashflow generated in the year under review amounted to CHF 3.7 million. Compared to the previous year (CHF 108.1 million), this corresponds to a significant decrease of CHF 104.4 million, which is due in roughly equal parts to the lower cash flow from operating activities and the simultaneously higher investments in non-current assets.

There was a cash outflow from financing activities in the year under review totalling CHF 23.1 million, while the previous year saw a cash inflow from financing activities totalling CHF 121.3 million due to the issuance of a bond in the amount of CHF 200.0 million. In the year under review, cash inflows resulted from the refinancing of euro promissory notes and the capital increase at companies with minority interests. Cash outflow, on the other hand, increased due to the higher dividend paid to Emmi AG shareholders.

As a consequence of the cash flows described above, cash and cash equivalents contracted by CHF 45.1 million in financial year 2022 from CHF 247.3 million in the previous year to CHF 202.2 million as at 31 December 2022.

Outlook 2023

The challenging economic conditions are expected to continue in 2023. Although the rise in inflation rates seems to have peaked, this is probably not yet the case when it comes to cost prices, and a return to earlier, significantly lower inflation levels is still nowhere on the horizon. In addition, there are signs of a significant economic slowdown and recessionary risks in many of Emmi’s relevant markets and regions, which will dampen consumer sentiment and put increased pressure on sales volumes.

Emmi therefore expects input costs to continue to rise in 2023. This applies equally to energy costs, even if the uptick has eased slightly in recent months. Due to ongoing high inflation rates, the pressure on personnel costs will also remain high, exacerbated by the acute shortage of skilled workers and labour in various countries. In addition, further interest rate hikes by major central banks to fight inflation are likely to increase financing costs.

As in the previous year, continued rising costs will make it impossible to avoid responsible sales price increases in 2023. Their impact is likely to be partly responsible for organic sales growth above the medium-term forecast. The sales price adjustments which were already executed in 2022 and intensified in the second half of the year will also have an impact, as will the ongoing recovery of the food service business, particularly in Switzerland. This stands in contrast to the increasing pressure on volumes, which is why we expect a normalisation overall and lower organic growth compared to the high levels of 2022.

Persistently high and increasing input costs and personnel expenses will put unrelenting pressure on operating margins in 2023. At Emmi, we will therefore continue to exercise our usual discipline and prudence, and counter the pressure on margins with further efficiency and cost-saving initiatives as well as targeted portfolio transformation along the strategic priorities.


In the business division Switzerland, conditions for Emmi remain challenging. Import pressure will persist, while an increase in shopping tourism in foreign countries close to the border is also to be expected due to the strong Swiss franc. High Swiss milk prices and the limited supply of milk will have an additional negative impact. In addition, new production capacities for milk processing have been built in Switzerland in recent years, which need to be fully utilised and create further price pressure. Emmi will counter these negative developments with its strong brand concepts, trend-led innovations, a strong focus on customers and consumers, as well as robust production output.

Innovative Italian speciality desserts and the product range of Emmi Caffè Latte are key success factors in the business division Europe, which will continue to generate organic growth in the current year. Alongside brand and trend concepts, it is extremely important for Emmi to further expand its strong position in interesting niches such as Italian premium desserts. Sales should also be boosted by the powder business in the Netherlands, where Emmi significantly increased production capacities through targeted investments in 2022.

The business division Americas should continue to see ongoing rising demand in the USA as well as in the growth markets of Brazil, Mexico and Chile in 2023. As long as the milk supply in Tunisia normalises, growth impulses can also be expected from this market. While continued inflation will support organic growth, expected purchasing power devaluations coupled with continued high volatility in these markets are likely to pose growth risks for Emmi.

Sales and profit growth

Emmi expects organic sales growth of  3% to 4% at Group level in 2023, which remains above the medium-term forecast of 2% to 3%. In Switzerland, organic growth is likely to be 1% to 2%. Internationally, Emmi also expects price-supported sales growth above its own mid-term expectations. We therefore forecast growth of 6% to 8% for the business division Americas and 3% to 5% for the business division Europe. However, the ongoing challenging economic environment and potential recessionary trends are likely to create significant uncertainties in terms of volume developments and continued high volatility, especially in the international divisions.

In order to protect the earnings base in the face of the expected continuing negative input cost trend, Emmi will rigorously pursue initiatives to increase profitability and implement responsible sales price increases. Despite ongoing high cost pressure, Emmi expects an operating result at EBIT level of between CHF 275 million and 295 million and a net profit margin of between 4.5% and 5.0% for the financial year 2023. Emmi also confirms its medium-term targets for organic sales growth (Group 2% to 3%, Switzerland 0% to 1%, Americas 4% to 6%, Europe 1% to 3%), net profit margin (5.5% to 6.0%), ROIC (improving trend) and distribution rate (35% to 45%).