Total assets as at 31 December 2024 were up year on year by CHF 645.0 million or 23.8% to CHF 3,359.5 million (previous year: CHF 2,714.5 million). This increase is entirely attributable to the acquisitions of Verde Campo, Hochstrasser and, in particular, Mademoiselle Desserts during the financial year, and is primarily reflected in significantly higher non-current assets.
Operating net working capital (consisting of inventories and trade receivables and payables) amounted to CHF 708.9 million. The increase of CHF 55.8 million or 8.5% compared with the end of the previous year (CHF 653.1 million) is entirely attributable to acquisition effects. As a percentage of sales, operating net working capital amounted to 16.3%, compared with 15.4% in the previous year. However, taking the full-year sales of the acquired companies into account, net working capital as a percentage of sales would be in line with the previous year.
Non-current assets increased significantly, up CHF 542.9 million or 42.9%, from CHF 1,264.1 million in the previous year to CHF 1,807.0 million. Property, plant and equipment accounted for CHF 1,283.3 million (previous year: CHF 1,105.4 million) of this, making up the large majority of non-current assets and increasing by CHF 177.9 million, primarily as a result of acquisitions, but also due to investments that slightly exceeded depreciation. Intangible assets increased by CHF 351.6 million, largely due to the recognition of revalued customer relationships from the acquisition of Mademoiselle Desserts.
Liabilities as at 31 December 2024 amounted to CHF 2,229.7 million, compared to CHF 1,299.6 million at the end of the previous year. The increase of CHF 930.1 million was mainly due to the CHF 625.0 million of new long-term bonds issued to finance the acquisition of Mademoiselle Desserts. The acquisitions were also primarily responsible for the increase in trade payables, bank overdrafts and finance lease liabilities, other payables, accrued liabilities and deferred income and deferred income tax liabilities included in non-current provisions. The equity ratio fell from 52.1% as at 31 December 2023 to 33.6% as a result of the offset of goodwill from the acquisitions and in combination with the additional financial liabilities. The increase in financial liabilities compared to the previous year due to acquisition activity resulted in net debt of CHF 1,003.7 million as at 31 December 2024, compared to a low CHF 298.3 million in the previous year.
Cash inflow from operating activities amounted to CHF 406.9 million in the reporting period, an increase of CHF 36.8 million from CHF 370.1 million in the previous year. While the increase of CHF 14.7 million in cash flow before changes in net working capital, interest and taxes largely reflects the operating improvement at EBITDA level, the higher cash flow from operating activities is also due to the positive trend in net working capital. The decrease in net working capital had a positive impact of CHF 37.7 million on cash flow from operating activities in the year under review. Compared to the positive impact of CHF 21.9 million in the previous year, this resulted in a positive difference of CHF 15.8 million, which primarily reflects the further improvement in operating net working capital. Interest and taxes paid impacted cash flow from operating activities by a total of CHF 6.3 million less than in the previous year.
Cash outflow from investing activities amounted to a high CHF 962.9 million in the period under review, compared with CHF 135.8 million in the previous year, driven by acquisition activities. The acquisitions of Mademoiselle Desserts, Hochstrasser and Verde Campo and the acquisition of minority interests resulted in cash outflows from acquisition activities totalling CHF 844.9 million in the year under review, compared with a net cash inflow of CHF 10.8 million in the previous year. Investments in property, plant and equipment generated a net outflow of CHF 111.3 million in the year under review, compared with CHF 145.4 million in the previous year.
Excluding cash flow from acquisition activities, a very pleasing free cash flow of CHF 288.8 million was generated in the year under review. The significant increase compared to the previous year (CHF 223.5 million) is attributable to higher cash flow from operating activities and lower investments in non-current assets.
There was a total cash inflow from financing activities of CHF 508.0 million in the period under review, compared with a cash outflow of CHF 81.1 million in the previous year. The majority of the year-on-year difference relates to the issue of bonds to finance the acquisition of Mademoiselle Desserts, which generated a cash inflow of CHF 624.2 million in the period under review. There were higher cash outflows than the previous year due to the repayment of other financial liabilities and the higher dividend to the shareholders of Emmi AG and minority shareholders
As a result of the cash flows described, cash and cash equivalents decreased by CHF 45.4 million in 2024 from CHF 349.1 million in the previous year to CHF 303.7 million as at 31 December 2024.
Economic conditions will remain challenging in 2025 and beyond. Persistent geopolitical tensions are causing uncertainty all over the world and also weighing on global economic growth. Ongoing megatrends such as deglobalisation, decarbonisation and demographic change are also putting pressure on prices and are likely to help keep inflation stubbornly high in many countries. Several markets relevant to Emmi expect only subdued economic growth for the current year, and consumer sentiment is correspondingly cautious.
In terms of operating expenses, pressure on personnel costs will remain high due to wage adjustments as a result of inflation and the sustained acute shortage of skilled workers in various countries. Procurement markets and global supply chains are also likely to remain volatile, leading to further increases in prices, for example for commodities such as coffee, cocoa and packaging materials. Overall, Emmi therefore expects input costs to continue to rise in 2025. The Swiss franc is also likely to strengthen further, which not only has a negative impact on the Emmi Group’s sales and results in Swiss francs, but in particular also has a negative impact on export competitiveness from Switzerland. When it comes to interest rates, however, further monetary policy easing can be expected from the major central banks, which will bring down interest rates.
At Emmi, we firmly believe that high quality, strong brands and innovative concepts are particularly important, especially in times of great uncertainty and when consumer sentiment is cautious. Emmi will therefore continue to act with the usual discipline and prudence and counter pressure on margins with further efficiency and cost-saving initiatives and, in particular, pursue the ongoing portfolio transformation in line with the strategic priorities.
Conditions in the division Switzerland remain challenging for Emmi. The current import pressure will persist. 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 influences with strong brand concepts, trend-focused innovations, a strong customer and consumer focus and high-quality products.
In the division Americas, Emmi expects demand to continue rising in the growth markets of Brazil, Chile and Mexico in the year ahead. Good momentum in the key US market should also make a positive contribution to the division’s growth. Whether Tunisia can also expect positive growth momentum again depends on the normalisation of milk production, which is difficult to assess due to the challenging macroeconomic environment in the country. As the generally high volatility and inflation in the growth markets in the division Americas are likely to entail growth risks, Emmi expects organic sales growth in the short term to be a little below the medium-term targets.
Innovative speciality desserts and Emmi Caffè Latte are important success factors in the division Europe and will continue to generate organic growth in the current year. Mademoiselle Desserts will significantly increase sales in the division Europe as a whole, but will represent an acquisition effect for the first three quarters and not contribute to organic growth until the fourth quarter. The powder business in the Netherlands, where Emmi already achieved significant growth in 2024, should also boost sales. On the other hand, the expected further appreciation of the Swiss franc is having a negative impact on the competitiveness of the export business from Switzerland, particularly in the cheese segment. Nevertheless, Emmi expects organic sales growth in the division Europe to be in line with medium-term targets.
Emmi expects organic sales growth of 1.5% to 2.5% at Group level in the 2025 financial year. In Switzerland, Emmi expects organic sales growth of 0% to 1%, despite the challenging conditions mentioned. Organic growth of 3% to 5% is expected for the division Americas and 1% to 3% for the division Europe. 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%).
Despite the many uncertainties and persistently high cost and price pressure, Emmi expects operating profit at EBIT level to increase from CHF 330 million to CHF 350 million in the 2025 financial year thanks to further operational progress, the ongoing portfolio transformation and the acquisition-related contribution from Mademoiselle Desserts. As expected, additional financing costs in connection with the acquisition of Mademoiselle Desserts will have a negative impact on the net profit margin, so Emmi forecasts this to be between 4.8% and 5.3% for the 2025 financial year. Emmi also confirms the medium-term targets for net profit margin (5.5% to 6.0%), ROIC (improving trend) and the distribution rate (35% to 45%).