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Letter to Shareholders

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Ricarda Demarmels, CEO and Urs Riedener, Chairman of the Board of Directors

Dear Shareholders,

In 2024, we continued to operate in a challenging environment with geopolitical tensions, persistent inflation and advancing climate change, which continues to place great demands on us as individuals, as a society and as a company.

This makes it even more crucial to have a shared set of values, a proven strategy and strong partnerships across the entire value chain that we can rely on at Emmi. Once again this year, they form the foundation of our business success and our ongoing development. Guided by our strategy and values, we have successfully grown our business through our expertise, innovations and agile approach, all while staying focused on our purpose: “Together, we create the best dairy moments – today and for generations to come”. Our carefully crafted products create moments of joy for millions of people around the world. Since 1907, we have taken responsibility as a manufacturer of high-quality food, both for today and for future generations.

We are Emmi

Robust business model

In the 2024 financial year, the Emmi Group increased its annual sales to CHF 4,348.8 million. At 2.4%, this strong, fully volume-driven organic growth exceeds our guidance. All divisions of the Emmi Group contributed to this strong organic growth, despite ongoing market challenges. The broad-based growth across countries and product groups reflects the consistent implementation of our strategy and shows that we can further expand our strong market positions with innovative brands and concepts in strategic market niches as well as our balanced geographical presence with an attractive product and customer portfolio. Above all, it highlights the tremendous dedication of our global teams, who put our customers at the heart of everything they do.

“Thanks to broad-based acceleration in the second half of the year, the Emmi Group achieved strong organic growth in 2024. The volume-driven organic growth reflects the consistent implementation of the strategy and strong market positioning with innovative brands and concepts in attractive market niches. And above all, the exceptional performance of our teams, who put our customers at the heart of everything we do, every day.”

Ricarda Demarmels

Acceleration in growth in the second half of 2024

In its home market of Switzerland, Emmi achieved volume-driven organic growth of 0.3% in line with its own expectations, with sales of CHF 1,771.4 million (previous year: CHF 1,762.0 million). Innovative brand concepts such as Emmi Caffè Latte, Emmi Energy Milk, Aktifit and Luzerner Rahmkäse made a significant impact on the market and made a positive contribution to revenue growth, as did higher sales of milk powder for industrial customers. Together with our partner Coop, we launched recyclable PET packaging for dairy products. This sustainable packaging innovation marks another step on our journey towards achieving our sustainability goals within the circular economy, and we are making a difference here in Switzerland.

The dairy leader in Switzerland

Division Americas exceeded sales of CHF 1,707.7 million (previous year: CHF 1,698.8 million) and organic growth of 3.7%. The key markets of Brazil, Chile, Mexico and the USA in particular contributed to the strong growth. A significant contribution in the USA came from locally established businesses such as US feta market leader Athenos, goat’s milk products from the only nationwide brand in the USA, Meyenberg, as well as speciality cheeses imported from Switzerland. However, sales of premium desserts by Emmi Dessert USA also rebounded in the second half of the year following the expected decline in the first half of the year. Sales in the strategic niche of ready-to-drink coffee from the Kaiku Caffè Latte brand in Spain also performed very well.

In May 2024, Laticínios Porto Alegre, Emmi’s Brazilian subsidiary, acquired a majority stake in Verde Campo in the state of Minas Gerais. The innovative Verde Campo brand enables Emmi to strengthen its existing market position in the key market of Brazil with functional premium dairy products made from high-quality protein, in which it is considered a pioneer.

Division Europe sales increased by 13.1% to CHF 747.7 million (previous year: CHF 661.4 million). This significantly exceeded expectations, with strong organic growth of 5.5%. Emmi Caffè Latte, Italian speciality desserts and Kaltbach speciality cheese delivered a strong performance. Sales of goat’s milk powder and fresh cheese in the Netherlands also increased significantly.

A strong international market player

Strengthening strategic niches and leading brands

Emmi celebrated a historic dairy moment in 2024. Exactly 20 years ago, Europe’s first ready-to-drink coffee, Emmi Caffè Latte, came onto the market. This popular, iconic drink is representative of the innovative strength with which Emmi has developed its brands and business over the years. The acquisition of the renowned Lucerne-based coffee roastery, Hochstrasser, enabled Emmi to strengthen its coffee expertise and the innovative advancements of its iconic Emmi Caffè Latte brand in the year under review.

The acquisition of the leading French specialist in premium patisserie, Mademoiselle Desserts Group, was completed in October 2024, enabling Emmi to take a decisive step towards becoming a “category captain” in the dessert category. The newly created dessert division, consisting of all Emmi dessert companies in the Group, is allowing Emmi to double its sales in the strategic niche that it has built up over the past ten years, enabling the Group to occupy a leading position in this growing market.

An innovative leader in selected niches

Strong results in a challenging market environment

Profitable broad-based volume growth, combined with continuous and systematic efficiency programmes and strict cost discipline, led to higher operating results and margins. The significant increase in personnel costs was expected due to inflation. Even though this weakened growth at the gross profit margin level, overall margin improvements were pleasing at all levels thanks to further significant operational progress in the international business.

Excellent in what we do

The operating result at EBIT level amounted to CHF 302.7 million, thus exceeding the 300 million mark for the first time. As expected, the pleasing operating results of Mademoiselle Desserts were more than offset by non-cash and one-off purchase price allocation effects. Excluding Mademoiselle Desserts, EBIT was expected to be CHF 308.8 million compared to EBIT adjusted for the loss on the sale of Gläserne Molkerei of CHF 295.4 million in the previous year. Net profit amounted to CHF 220.3 million and the net profit margin was 5.1% (previous year adjusted: 5.0%), CHF 227.6 million and 5.4% excluding Mademoiselle Desserts. Both at EBIT level and in terms of the net profit margin, the Emmi Group managed to meet the expectations communicated in February 2024 at the upper end of the range.

In view of the strong balance sheet and good results, the Board of Directors is proposing, as part of a consistent payout policy and dividend growth, to increase the dividend by 6.5% to CHF 16.50 per share (previous year: CHF 15.50).

Acting responsibly

Taking responsibility and shaping the future of the company consciously and successfully is a top priority for the Emmi Group. True to our heritage, sustainability is an integral part of our business model and strategy. Our purpose underscores our belief in creating the best dairy moments together – today and for generations to come.

Sustainable, profitable growth requires a long-term perspective that takes into account economic, social and environmental aspects. In doing so, Emmi focuses on the strategic pillars: people, communities and planet. During the year under review, Emmi continued to press ahead with its sustainability efforts and made important progress.

“Sustainable, profitable growth requires a long-term corporate strategy that fully integrates sustainability. As a strong, reliable partner, Emmi assumes responsibility within the value chain to shape our future together and achieve long-term success.”

Urs Riedener

Since February 2024, 100% of our milk suppliers in Switzerland have been meeting the Sustainable Milk industry standard and producing according to standards that exceed the local average. In addition, the pioneering “KlimaStaR Milk” project made a significant contribution to advancing climate- and resource-friendly milk production in Switzerland and made a strong impact in the industry and beyond national borders. In the second year of the project, we were able to compile a successful interim assessment of the reduction of greenhouse gas emissions and the reduction of feed-food competition and land competition.

Sustainability objectives

A role model in sustainability

Sustainability Report

Continuity in supervision and leadership

Emmi’s Board of Directors, chaired by Urs Riedener since April 2023, will see three changes at the helm at the 2025 General Meeting. At the General Meeting held on 10 April 2025, the Board of Directors of Emmi AG will propose Rebekka Iten and Christian Troxler to replace Diana Strebel and Werner Weiss, neither of whom will stand for re-election at the upcoming General Meeting. The Board of Directors would like to thank Diana Strebel for her significant contribution to Emmi over the past 13 years. In addition to her duties as a member of the Board of Directors, she successfully chaired the Market Committee for a number of years and played a key role in shaping Emmi’s strategic direction. We would also like to thank Werner Weiss for his unwavering dedication. He will no longer be able to contribute to the Emmi Board of Directors in future due to the term of office limitation rule set by ZMP.

Rebekka Iten is a seasoned international executive with broad experience in consumer goods, strategy, marketing, sales, innovation management, M&A, the transformation of large organisational units and digitalisation. Her expertise in Emmi’s key target markets will add significant value to the Board of Directors.

Christian Troxler is an independent agricultural expert and milk producer. He manages a modern farm, has been a member of the ZMP Board of Directors since 2023, is also a member of the Board of Directors of the brand association Emmentaler Switzerland and performs other managerial tasks in the agricultural sector. His activities have enabled him to build a strong political network and an in-depth understanding of the dairy and agricultural industries.

With great sadness, the Board of Directors also announces the death of Board member Christina Johansson. Board member Dominik Bürgy will take over as Chairman of the Audit Committee on an interim basis. The Board of Directors will provide information in due course on the nomination of her successor, who will be proposed for election at the General Meeting on 10 April 2025.

Oliver Wasem took over the role of CFO on 1 July 2024 within the eight-member Group Executive Management, which has been headed by Ricarda Demarmels as CEO since the start of 2023.

Outlook

The Emmi Group expects the economic conditions – shaped by a strong Swiss franc, geopolitical tensions, high input costs and subdued consumer sentiment – to continue in 2025. The Group will therefore continue to act with foresight and remains committed to its strict cost discipline and Group-wide efficiency programmes. In addition, Emmi will continue to convince with its well-diversified product portfolio and innovative brand concepts.

For the 2025 financial year, Emmi expects organic sales growth of 1.5% to 2.5% at Group level. Growth in Switzerland is expected to be between 0% and 1%. In the international business, sales growth of 3% to 5% is expected in division Americas and of 1% to 3% in division Europe.

At EBIT level, Emmi expects a result of CHF 330 million to CHF 350 million and a net profit margin of between 4.8% and 5.3%.

Dear Shareholders, Thank you for the trust you have placed in us. We would also like to thank our more than 12,000 employees for their outstanding dedication and creative drive. They make Emmi what it is and are committed to delivering “heartfelt indulgence” every day.

Urs Riedener

Chairman of the Board of Directors

Ricarda Demarmels

CEO