1. Segment reporting

Emmi does not publish segment results since this would cause significant competitive disadvantages in Switzerland and abroad vis-a-vis customers, unlisted and larger listed competitors.

The divisions are not defined strictly according to geographical considerations. The division Americas includes the Emmi Group companies in the USA, Brazil, Spain, Chile, Tunisia, Mexico and Canada. The division Europe comprises those in Italy, France, the Netherlands, the UK, Germany, Austria and Belgium. The division Global Trade primarily comprises direct sales from Switzerland to customers in countries where Emmi has no subsidiaries. These include the Asian and Eastern European markets, most South American countries and the Arabian Peninsula.

2. Other operating income

3. Other operating expenses

The decrease in other operating expenses is primarily due to the loss incurred in the previous year from the sale of Gläserne Molkerei.

4. Depreciation and amortisation

5. Financial result

6. Income taxes

The effective average tax rate of the reporting year amounted to 15.2% (previous year: 13.7%). The effective average tax rate of the previous year, adjusted for the tax effect from the disposal of Gläserne Molkerei and Ambrosi S.p.A., amounted to 14.9%.

Net accruals for current income taxes increased from CHF 18.1 million in 2023 to CHF 32.8 million in 2024. Deferred income taxes are calculated for every company using the effective applicable tax rate. As at 31 December 2024, the resulting weighted average tax rate was 19.6%. The weighted average tax rate of the previous year was 16.7% (reported) and 18.2% adjusted for the non-recurring effects related to the disposals of Gläserne Molkerei and Ambrosi S.p.A. Deferred income taxes include recognised tax claims from tax loss carryforwards amounting to CHF 11.5 million (previous year: CHF 5.4 million).

The Emmi Group falls within the scope of the OECD tax reform, which provides for a global minimum tax rate (Pillar II) of 15%. In Switzerland as well as in other countries where the Emmi Group has a presence, the Pillar II regulations came into force in the 2024 financial year. On the basis of the analyses carried out, the implementation of these regulations has no material impact on the consolidated financial statements of the Emmi Group.

The net change of recognised tax claims from tax loss carryforwards decreased the income tax expenses in the reporting year by CHF 2.4 million (previous year: decrease by CHF 2.8 million).

7. Earnings per share

Earnings per share is calculated by dividing the net profit attributable to the shareholders of Emmi AG by the average number of shares outstanding. There are no treasury shares that need to be considered in the calculation of the average number of shares outstanding.

In the previous year, earnings per share of CHF 34.82 includes the loss from the sale of Gläserne Molkerei and the gain from the sale of Ambrosi S.p.A. Excluding this non-recurring effect, earnings per share amounted to CHF 39.70.

8. Trade receivables

9. Other receivables

10. Inventories

11. Prepayments and accrued income

Other prepayments and accrued income in the reporting year and the previous year consist mainly of prepayments, various refunds and accrued income for advertising costs and milk invoices.

12. Loans and other receivables

The carrying amount of loans and other receivables from third parties includes impaired loans in the amount of CHF 1.4 million (previous year: CHF 1.4 million).

13. Property, plant and equipment

14. Intangible assets

All intangible assets were acquired.

15. Trade payables

16. Other payables

17. Accrued liabilities and deferred income

Other accrued liabilities and deferred income in the reporting year and the previous year comprise in particular contributions to brand organisations, expected earn-out payments for acquisitions, energy costs, advertising costs, HGV road tax and various services.

18. Financial liabilities

18.1 Bonds

The CHF 0.3 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 30 October 2024. This accrual will be released over the term of the bond. The issue price at 100.029% led to premium income of CHF 0.04 million. The actual interest rate on the bond is thereby increased from 1.1% to 1.21% per year.

The CHF 0.5 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 22 September 2023. This accrual will be released over the term of the bond. The issue price at 100.13% led to premium income of CHF 0.3 million. The actual interest rate on the bond is thereby increased from 2.0% to 2.04% per year.

The CHF 0.4 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 21 June 2017. This accrual will be released over the term of the bond. The issue price at 100.4% led to premium income of CHF 0.4 million. The actual interest rate on the bond is thereby increased from 0.5% to 0.51% per year.

In 2020, securities with a nominal value of CHF 0.5 million were repurchased from the stock exchange for investment purposes.

The CHF 0.4 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 30 October 2024. This accrual will be released over the term of the bond. The issue price at 100.014% led to premium income of CHF 0.03 million. The actual interest rate on the bond is thereby increased from 1.35% to 1.4% per year.

The CHF 0.7 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 1 December 2021. This accrual will be released over the term of the bond. The issue price at 100.54% led to premium income of CHF 1.1 million. The actual interest rate on the bond was thereby reduced from 0.375% to 0.37% per year.

The proceeds from the bond were used to fund the acquisition of the Athenos business in the USA. Emmi has entered into a cross-currency swap to hedge currency and interest rate risks over the long term. Taking this hedge into account, the net interest rate on the USD nominal value of USD 215.6 million is 2.3% instead of 0.375% on the CHF nominal value of 200.0 million.

The CHF 0.7 million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 30 October 2024. This accrual will be released over the term of the bond. The issue price at 100.207% led to premium income of CHF 0.6 million. The actual interest rate on the bond was thereby reduced from 1.6% to 1.62% per year.

18.2 Maturing structure of financial liabilities

All bonds and the vast majority of bank loans are set at fixed interest rates. For the bond issued in December 2021, the interest rate was applied after including cash flows from the cross currency swap. There are no financing arrangements in place linked to financial covenants.

In the reporting year, financial liabilities increased by CHF 648.0 million to CHF 1,330.3 million. The financing for the acquisition of the Mademoiselle Desserts Group was largely raised by issuing a triple bond for a total of CHF 625 million on 30 October 2024. The three tranches have maturities in 2026, 2030 and 2034, and the weighted average all-in costs amount to 1.53% per year. New financial liabilities totalling CHF 56 million were acquired with the three acquisitions Verde Campo, Hochstrasser and Mademoiselle Desserts Group. In addition, local financing was increased during the reporting year in Brazilian real and reduced in euro, Tunisian dinars, and Chilean and Mexican pesos. At the end of the reporting year, the share of financing in Swiss francs was 85.1% (previous year: 73.4%), mainly relating to the six bonds. 10.6% (previous year: 19.1%) of the financial liabilities are denominated in euro and 0.1% (previous year: 0.0%) in British pound. CHF 55.8 million (previous year: CHF 51.7 million) or 4.2% (previous year: 7.5%) of financing is denominated locally in emerging market currencies such as the Brazilian real, Tunisian dinar, and Chilean and Mexican peso.

19. Provisions

Other provisions include, among others, liabilities for staff expenses in foreign countries as required by law (reporting year: CHF 8.9 million, previous year: CHF 5.7 million) and provisions for pending legal matters and business disputes (reporting year: CHF 2.4 million, previous year: CHF 1.5 million). In all cases, the likelihood of occurrence of such events has been assessed at above 50%.

20. Employee benefit schemes

21. Acquisitions

The companies acquired in the reporting year had the following significant balance sheet items at the time of acquisition and are fully consolidated. No companies were acquired in the previous year.

On 31 May 2024, Laticínios Porto Alegre Indústria e Comércio S.A. (LPA), an Emmi subsidiary based in Ponte Nova, Brazil, acquired 70% of the shares in Laticinios Verde Campo S.A., Brazil. Emmi holds 70% of the shares in LPA and therefore has a 49% stake in Verde Campo. Verde Campo is well established in Brazil, with its innovative dairy products such as yogurt and milk drinks with high-quality protein based on natural whey. In the 2024 financial year up to the date of acquisition, Verde Campo generated net sales of BRL 128 million (CHF 23 million) and contributed BRL 178 million (CHF 29 million) to Group sales since it became part of the Group on 31 May 2024.

On 1 October 2024, Emmi acquired the Lucerne-based coffee roaster Hochstrasser, consisting of the companies Hochstrasser AG Littau, caffè Don George Gourmetrösterei AG and Mediato AG. The acquisition ensures quality and innovative strength of freshly roasted and brewed coffee for Emmi Caffè Latte in the long term. Hochstrasser generated net sales of CHF 13 million in the 2024 financial year up to the date of acquisition and contributed CHF 5 million to Group sales since it became part of the Group on 1 October 2024.

On 3 October 2024, Emmi acquired the French Mademoiselle Desserts Group, which specialises in innovative premium patisserie. Emmi is thus adding French desserts to its dessert portfolio and strengthening its Anglo-Saxon desserts with a leading presence in the in-store bakery and food service sector and can offer its customers a highly innovative full range that combines the great dessert traditions. The Mademoiselle Desserts Group generated net sales of EUR 308 million (CHF 293 million) in the 2024 financial year up to the date of acquisition and contributed EUR 128 million (CHF 122 million) to Group sales since it became part of the Group on 3 October 2024.

22. Goodwill from acquisitions

Goodwill from acquisitions of companies or the purchase of interests in associates or joint ventures is offset against retained earnings at the date of acquisition. The theoretical capitalisation of goodwill and its amortisation over the expected useful life of usually 20 years as well as the theoretical recognition of negative goodwill as a liability over the expected useful life of 5 years would have the following effects on the consolidated financial statements as at 31 December 2024:

Theoretical capitalisation of goodwill

Theoretical recognition of negative goodwill

Theoretical impact on shareholders’ equity incl. minority interests

Theoretical impact on earnings before interest and taxes (EBIT)

Theoretical impact on net profit

23. Disposal of companies

No companies were sold in the reporting year. Gläserne Molkerei, which was sold in the previous year, had the following key balance sheet items at the time of sale:

On 14 August 2023, Emmi sold Gläserne Molkerei (consisting of the companies Gläserne Molkerei GmbH, Gläserne Molkerei Münchehofe GmbH and Hofmolkerei Münchehofe GmbH) to Munich-based Mutares, which specialises in turnaround situations. Gläserne Molkerei generated annual sales of around EUR 100 million with over 120 employees. The loss from this transaction amounts to CHF 37.2 million (before tax) and CHF 28.9 million (after tax) and is recognised in the income statement in other operating expenses and tax expenses.

24. Unsettled derivative financial instruments

Similar to the underlying transactions, currency forwards, interest rate swaps and other forward transactions used to hedge future cash flows are not recognised in the balance sheet. The result of these derivative instruments is recognised in the income statement on occurrence of the transaction hedged. Derivative financial instruments used to hedge balance sheet positions in foreign currencies are recognised as securities in the current assets or other payables in the current liabilities, respectively. Corresponding changes in value are recognised in the financial result.

In connection with the CHF 200 million bond issued in December 2021 to fund the USD acquisition of the Athenos business in the USA, Emmi entered into a cross-currency swap. This hedges currency and interest rate risks in USD over the entire term of the bond. While the fair value of the currency portion serves as a hedge of balance sheet items and is therefore accounted for in the same way as the hedged item, the fair value of the interest portion is a hedge of future cash flows. Accordingly, the fair value of the interest portion is not recognised.

Emmi also has options to acquire additional shares in a number of Group companies with minority interests. At the same time, put options have been granted in general to the counterparties. These options are not recognised in the balance sheet as they represent derivatives on equity instruments of the own organisation, which are explicitly excluded from the scope of Swiss GAAP FER 27. The strike price of these options is generally based on the corresponding enterprise value at the exercise date and cannot currently be reliably measured. The exercise date varies depending on the agreement. The maturities range from short term to time-unlimited options.

25. Government grants

In 2024 asset-related government grants of CHF 1.6 million (previous year: CHF 1.0 million) were recognised that were deducted directly from purchase costs. The grants recognised in the year under review relate to the installation of a solar power facility in the USA; those in the previous year were mainly for investments in property, plant and equipment in Tunisia.

In 2024 Emmi received income-related government grants of CHF 1.1 million (previous year: CHF 1.1 million), which mainly originate from export contributions in Switzerland and were recognised as a reduction in the cost of materials.

26. Contingent assets and liabilities

Emmi is involved in legal disputes as part of normal business activities. Although the outcome of the lawsuits currently cannot be predicted with certainty, Emmi assumes that none of the disputes will have any significant negative impact on operating activities or on the Group’s financial situation. Expected outgoing payments are provided for accordingly. As at the date of the financial statements, the Group had no major contingent assets.

27. Pledged assets and off-balance sheet leasing/rental obligations

28. Investment obligations and other off-balance sheet liabilities

Furthermore, there are milk purchase agreements that cannot be quantified.

The long-term commodity contracts are purchase agreements for coffee that will be settled at the market price valid in the period of delivery.

29. Transactions with related parties

Business transactions with related parties are based on arm’s length conditions. All transactions are reported in the consolidated financial statements for 2024 and 2023, and consist of deliveries of products and raw materials, loans, and services to and from related parties. The corresponding receivable and payable balances are reported separately in these financial statements (see notes 8, 9, 11, 12, 15, 16 and 17).