Emmi generated sales of CHF 2,017.2 million in the first half of 2024, which, as expected, was below the previous year’s figure (CHF 2,103.4 million). The decline in sales amounted to CHF 86.2 million or 4.1%. The net negative acquisition effects of 2.2% relate first and foremost to the disposal of Gläserne Molkerei last August and, to a lesser extent, the acquisition of Verde Campo in Brazil, which was completed at the end of May this year and therefore had a slightly positive effect on sales. Sales performance was also negatively impacted by currency effects of 1.9%, which were largely due to the devaluation of the Chilean peso, the euro and the US dollar against the Swiss franc. After adjusting for acquisition and currency effects, organic sales growth was flat (0.0%), which, as expected, was below our forecast for the year as a whole (1% to 2%).
The division Switzerland saw an organic decline in sales of 0.2%, which was largely attributable to the milk price reduction during the first half of 2024. It is anticipated that the increase in milk prices in the second half of the year will provide a positive dynamic to growth in the division Switzerland. The fresh products segment performed well, despite the negative milk price effect in the first half of the year. Proven brand concepts such as Emmi Caffè Latte, Emmi Energy Milk and Aktifit continued to be growth drivers. By contrast, organic sales were down in the other major segments – dairy products due to the reduction in milk prices and cheese in part due to a renewed increase in cheese imports. The division Americas generated modest organic growth of just 0.1%. However, the slightly negative price effects, which were primarily driven by milk prices, a decline in sales in Tunisia due to a milk shortage, and the expected decline in volume in the US dessert business in the first half of the year, slowed down the division’s sales growth considerably. Brazil, Chile, California-based Darey Brands and the Mexideli trading business were, however, able to drive growth. At 2.0%, organic growth in the division Europe exceeded expectations for the year as a whole. Positive factors included sales of Emmi Caffè Latte in the UK, the dessert business in Italy, the export business with cheese from Switzerland and the goat’s milk powder business in the Netherlands.
The acquisition effects were attributable to the following factors:
Positive impact:
Negative impact:
Internal shifts in the distribution channels of certain customers also resulted in acquisition or divestment effects in the divisions Global Trade and Europe. However, these shifts between individual divisions did not have any impact on the Group.
Sales development in the divisions Switzerland, Americas, Europe and Global Trade are explained below.
|
in CHF million |
Sales 1HY 2024 |
Sales 1HY 2023 |
Difference 2024/2023 |
Acquisition effect |
Organic growth |
|
Dairy products |
334.1 |
337.7 |
-1.1% |
– |
-1.1% |
|
Fresh products |
191.4 |
190.9 |
0.3% |
– |
0.3% |
|
Cheese |
188.4 |
190.4 |
-1.0% |
– |
-1.0% |
|
Fresh cheese |
56.1 |
59.1 |
-5.1% |
– |
-5.1% |
|
Powder/concentrates |
46.9 |
41.1 |
14.2% |
– |
14.2% |
|
Other products/services |
37.9 |
37.6 |
0.9% |
– |
0.9% |
|
Total Switzerland |
854.8 |
856.8 |
-0.2% |
– |
-0.2% |
The division Switzerland generated net sales of CHF 854.8 million compared with CHF 856.8 million during the same period in the previous year. While the resulting organic decline in sales of 0.2% in the first half of the year fell below our own forecast for the full year (0% to 1%), the decline in sales was largely attributable to the reduction in milk prices during the first half of 2024; higher milk prices will, however, apply again from July of this year. Higher sales to industrial customers in the powder/concentrates segment and increased sales in the fresh products segment, which includes Emmi Caffè Latte, had a positive compensatory effect in the first half of the year. The division Switzerland accounted for 42.4% of Group sales (previous year: 40.7%).
In the largest segment, dairy products (milk, cream, butter), sales declined to CHF 334.1 in the first half of 2024, compared with CHF 337.7 million in the same period in the previous year. The organic decline in sales of 1.1% primarily reflects the negative impact of milk prices. While sales of milk increased overall thanks to positive momentum in the retail sector, lower butter sales exerted a negative impact on this segment’s performance.
Sales in the fresh products segment increased from CHF 190.9 million to CHF 191.4 million, representing organic growth of 0.3%. Proven brand concepts such as Emmi Caffè Latte, Emmi Energy Milk and Aktifit continued to perform robustly and more than compensated for certain price-related losses with higher volumes and sales. Innovative new products such as Emmi Caffè Latte in environmentally friendly PET bottles and the Emmi “I’m your meal” drinkable meal also contributed to this. The moderate summer temperatures during recent months have likely had a negative effect on sales, as evidenced by the decline in ice cream sales, among other things.
The cheese segment saw a 1.0% decline in sales to CHF 188.4 million, compared with CHF 190.4 million during the same period in the previous year. This development reflects not only the negative effect of milk prices, but also the further increase in cheese imports compared to the same period last year. Sales of Luzerner Rahmkäse increased, despite the challenging conditions.
Sales of fresh cheese fell from CHF 59.1 million to CHF 56.1 million, which corresponds to a decline in sales of 5.1%. This was mainly due to lower sales of mozzarella in the retail and food service sectors as a result of the weather.
The powder/concentrates segment posted sales of CHF 46.9 million compared with CHF 41.1 million during the same period in the previous year. The organic growth of 14.2% reflects higher sales of milk powder and concentrates to industrial customers.
Other products/services saw organic sales growth of 0.9%, up from CHF 37.6 million to CHF 37.9 million. This primarily relates to the increased turnover from services.
|
in CHF million |
Sales 1HY 2024 |
Sales 1HY 2023 |
Difference 2024/2023 |
Acquisition effect |
Currency effect |
Organic growth |
|
Cheese |
300.2 |
310.5 |
-3.3% |
0.4% |
-3.1% |
-0.6% |
|
Dairy products |
208.0 |
223.6 |
-7.0% |
0.2% |
-6.8% |
-0.4% |
|
Fresh products |
180.3 |
187.0 |
-3.5% |
1.2% |
-3.6% |
-1.1% |
|
Fresh cheese |
49.7 |
47.9 |
3.8% |
1.0% |
-1.5% |
4.3% |
|
Powder/concentrates |
24.0 |
22.6 |
6.3% |
– |
-3.3% |
9.6% |
|
Other products/services |
58.3 |
56.9 |
2.6% |
0.3% |
-1.1% |
3.4% |
|
Total Americas |
820.5 |
848.5 |
-3.3% |
0.5% |
-3.9% |
0.1% |
The division Americas includes the Emmi Group companies in the USA, Brazil, Spain, Chile, Tunisia, Mexico and Canada.
Sales in the division Americas fell by 3.3% in the first half of 2024, from CHF 848.5 million to CHF 820.5 million. After adjusting for net negative currency effects and the slightly positive acquisition effect from the purchase of Verde Campo in Brazil, organic growth amounted to only 0.1%. In the first half of 2024, this is therefore below our forecast for the year as a whole (2% to 4%). The slightly negative price effects, which were primarily driven by milk prices, a decline in sales in Tunisia due to a milk shortage, and the expected decline in volume in the US dessert business in the first half of the year slowed down the division’s sales growth considerably. Brazil, Chile, California-based Darey Brands and the Mexideli trading business were, however, able to drive growth. The division Americas accounted for 40.7% of Group sales (previous year: 40.3%).
Sales in the cheese segment amounted to CHF 300.2 million, compared with CHF 310.5 million in the same period last year. After adjusting for negative currency and slightly positive acquisition effects, organic sales declined by 0.6%. Lower sales of locally produced cheese in Chile and the USA hampered sales performance in this segment. Conversely, sales of cheese imported from Switzerland in the USA and Canada and locally produced cheese in Brazil developed positively.
Sales of dairy products declined by 7.0% from CHF 223.6 million to CHF 208.0 million, primarily due to negative currency effects. In organic terms, the decline in sales only amounted to 0.4% and was first and foremost the result of the ongoing raw milk shortage in Tunisia. Lower milk prices in Spain also had an adverse impact on sales growth in this segment, while positive growth drivers were Surlat brand cow’s milk in Chile and Darey Brands in California with Meyenberg brand goat’s milk.
Sales of fresh products fell from CHF 187.0 million in the same period in the previous year to CHF 180.3 million, corresponding to a decline in sales of 3.5%. The organic decline in sales of 1.1% is largely attributable to a reduction in volume within the dessert business in the USA. This was in line with expectations due to portfolio decisions and will have no further impact on sales performance in the second half of the year. Positive contributions in this segment were made by Brazil with yogurts, Tunisia with yogurts and desserts, and Darey Brands in California with goat’s milk yogurts. Spain also recorded significant growth with Emmi Caffè Latte.
While the other segments are of less significance to the division in terms of sales, each made a contribution to the division’s overall organic sales growth. The organic growth of 4.3% in the fresh cheese segment is attributable to higher sales of mozzarella in Brazil, Green Valley brand fresh cheese in California and the trading business in Mexico. In the powder/concentrates segment, increased sales of milk powder in Brazil were responsible for the organic growth of 9.6%. In other products/services, the trading business in Mexico was once again the primary growth engine.
|
in CHF million |
Sales 1HY 2024 |
Sales 1HY 2023 |
Difference 2024/2023 |
Acquisition effect |
Currency effect |
Organic growth |
|
Fresh products |
171.6 |
178.0 |
-3.6% |
-3.4% |
-2.0% |
1.8% |
|
Cheese |
52.7 |
54.2 |
-2.9% |
-1.4% |
-2.3% |
0.8% |
|
Fresh cheese |
24.3 |
23.6 |
3.4% |
-0.6% |
-2.5% |
6.5% |
|
Powder/concentrates |
18.6 |
16.2 |
14.5% |
-0.4% |
-2.9% |
17.8% |
|
Dairy products |
3.2 |
47.2 |
-93.3% |
-92.1% |
-0.2% |
-1.0% |
|
Other products/services |
15.7 |
18.5 |
-15.5% |
-8.8% |
-2.1% |
-4.6% |
|
Total Europe |
286.1 |
337.7 |
-15.3% |
-15.4% |
-1.9% |
2.0% |
The division Europe includes the Emmi Group companies in Italy, the Netherlands, the UK, France, Germany and Austria.
Sales in the division Europe amounted to CHF 286.1 million in the first half of 2024. Compared to CHF 337.7 million during the same period in the previous year, this represents a decline in sales of 15.3%, which is entirely due to the divestment effect of the sale of Gläserne Molkerei. Growth thus came out at 2.0% in organic terms excluding negative currency effects, which exceeded our expectations for the year as a whole (0% to 1%). Pleasingly, Emmi Caffè Latte has been able to maintain its growth trajectory despite the challenging market conditions. In addition, the dessert business in Italy, the export business with cheese from Switzerland and the goat’s milk powder business in the Netherlands also recorded positive growth momentum. The division Europe accounted for 14.2% of Group sales (previous year: 16.1%).
Sales of fresh products amounted to CHF 171.6 million, which corresponds to a decline of 3.6%. Adjusted for negative acquisition and currency effects, however, organic growth was 1.8%. The largest contribution to the company’s growth came from the UK; Emmi Caffè Latte recorded a significant increase in sales, while sales of Onken brand yogurt also rose. Dessert specialities from Italy also made a positive contribution to the division’s growth in this segment.
Sales in the cheese segment amounted to CHF 52.7 million, compared with CHF 54.2 million in the same period last year. After adjusting for negative acquisition and currency effects, the 2.9% decline in sales corresponds to organic growth of 0.8%. The cheese specialities of the Kaltbach brand saw an encouraging increase in sales, with substantial growth in Germany in particular, but also in the Netherlands. Conversely, sales of traditional cheese varieties in these countries had a negative impact on sales.
Sales in the fresh cheese segment were CHF 24.3 million, compared with CHF 23.6 million during the same period in the previous year. The growth of 3.4% – or 6.5% in organic terms – is due to the positive performance of fresh goat’s cheese sales in the Netherlands.
Sales of powder/concentrates increased by 14.5% to CHF 18.6 million, compared with CHF 16.2 million during the same period in the previous year. The organic growth of 17.8% relates to the increase in sales of goat’s milk powder in the Netherlands.
Sales in the dairy products segment fell due to the divestment effect of the sale of Gläserne Molkerei and are no longer of material significance for the division Europe. In the other products/services segment, the division Europe generated sales of CHF 15.7 million, compared with CHF 18.5 million in the same period in the previous year. The organic decline in sales of 4.6% is largely attributable to the business with organic plant-based milk alternatives, which suffered losses in a highly competitive market.
|
in CHF million |
Sales 1HY 2024 |
Sales 1HY 2023 |
Difference 2024/2023 |
Acquisition effect |
Organic growth |
|
Cheese |
26.8 |
28.2 |
-5.1% |
– |
-5.1% |
|
Fresh products |
20.3 |
17.5 |
15.6% |
4.8% |
10.8% |
|
Powder/concentrates |
7.6 |
13.9 |
-45.3% |
– |
-45.3% |
|
Dairy products |
0.4 |
0.5 |
-28.5% |
9.6% |
-38.1% |
|
Fresh cheese |
0.2 |
– |
n/a |
n/a |
n/a |
|
Other products/services |
0.5 |
0.3 |
109.7% |
382.5% |
-272.8% |
|
Total Global Trade |
55.8 |
60.4 |
-7.7% |
3.3% |
-11.0% |
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. The division Global Trade accounted for 2.7% of Group sales (previous year: 2.9%).
Sales in the division Global Trade amounted to CHF 55.8 million in the first half of 2024. Compared to the CHF 60.4 million recorded in the same period in the previous year, this represents a decline of 7.7%. Adjusted for the acquisition effect from the shift in distribution channels, the organic decline in sales was 11.0%. However, since this primarily concerns exports of surplus milk powder and cheese, it is of secondary importance from a margin perspective.
The organic decline in sales of 5.1% in the cheese segment was largely the result of lower exports of surplus Emmentaler AOP in Europe. Cheese exports to Asia, on the other hand, saw an overall increase. The fresh products segment posted organic growth of 10.8%, due primarily to the positive development of yogurt drinks in Northern Europe and yogurts in Asia. The decline of 45.3% in the powder/concentrates segment reflects lower sales of surplus skimmed milk powder from Switzerland.
Despite the lower sales, gross profit increased by CHF 8.8 million or 1.1% to CHF 784.2 million in the first half of 2024 (previous year: CHF 775.4 million). This increase is due to the significantly higher gross profit margin, which rose from 36.9% to 38.9% compared to the previous year. This encouraging development is primarily the result of further operational progress at various foreign companies, such as the dessert companies in Italy and the USA, the Kaiku Group companies in Spain, Chile and Tunisia, as well as in Brazil. The divestment of Gläserne Molkerei and the continued productivity and procurement measures also had a contributory effect.
Operating expenses rose by CHF 5.1 million or 0.9% compared to the previous year to CHF 588.7 million (previous year: CHF 583.6 million). Due to the overall lower sales, operating expenses as a percentage of sales increased to 29.2% (previous year: 27.7%). The main reason for the increase was a significant rise in personnel costs, which accounted for approximately two thirds of the increase relative to sales, negatively offsetting approximately half of the increase in the gross profit margin.
Personnel expenses increased to CHF 297.5 million from CHF 289.7 million in the same period in the previous year. The increase of CHF 7.8 million is a secondary effect of the high inflation rates during recent years, which have resulted in higher wage costs in many places due to wage increases. As a percentage of sales, personnel costs increased to 14.8% from 13.7% in the same period in the previous year, which was lower due to strong price-driven sales growth.
Other operating expenses amounted to CHF 291.2 million (previous year: CHF 293.9 million), a decrease of CHF 2.7 million compared to the previous year. As a percentage of revenue, however, they rose from 14.0% in the previous year to 14.4%. This increase is largely due to higher costs for marketing and sales, as well as maintenance and repair costs. Energy costs remain high. However, lower logistics costs compared to the previous year had a compensating effect.
Other operating income amounted to CHF 2.3 million in the first half of the year, compared to CHF 3.1 million in the same period in the previous year.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) recorded a slight increase of CHF 2.9 million to CHF 197.8 million in the reporting period (previous year: CHF 194.9 million). The EBITDA margin consequently amounted to 9.8%, compared with 9.3% in the same period last year. Driven by an encouraging increase in the gross profit margin, the EBITDA margin increased significantly despite a disproportionate increase in operating expenses.
Depreciation of property, plant and equipment increased by CHF 1.6 million in the reporting period, from CHF 50.2 million to CHF 51.8 million. However, amortisation of intangible assets decreased slightly from CHF 6.1 million to CHF 5.7 million.
Earnings before interest and taxes (EBIT) were CHF 140.3 million in the period under review, up CHF 1.8 million or 1.3% on the previous year (CHF 138.5 million). As a result of the margin trend described above, the EBIT margin also saw an encouraging increase to 7.0% in the first half of 2024 (previous year: 6.6%).
No non-recurring effects were recorded in the period under review or in the same period in the previous year. For this reason, Emmi has opted not to disclose adjusted results.
Income from associates and joint ventures recorded a loss of CHF 0.8 million in the first half of 2024 compared with a gain of CHF 0.9 million during the same period in the previous year.
The financial result (net financial expenses) fell by CHF 4.6 million to CHF 7.4 million (previous year: CHF 12.0 million). The improvement reflects both higher interest income and a better foreign currency result.
Income taxes amounted to CHF 19.8 million during the reporting period versus CHF 21.0 million in the previous year. The expected tax rate for the full year 2024 is therefore 15.0%.
Net profit including minority interests was CHF 112.2 million, compared with CHF 106.4 million in the same period in the previous year.
Minority interests in net profit amounted to CHF 7.9 million, a decrease of CHF 0.7 million compared to the previous year.
After deducting minority interests, net profit was CHF 104.4 million (previous year: CHF 97.8 million). Accordingly, net profit rose by CHF 6.6 million or 6.7%. The net profit margin was an encouraging 5.2% (previous year: 4.6%) and earnings per share for the first half of 2024 amounted to CHF 19.51 (previous year: CHF 18.28).
Total assets as at 30 June 2024 were up 3.9% or CHF 107.1 million compared with 31 December 2023 to CHF 2,821.6 million. Operating net working capital was CHF 681.3 million, an increase of CHF 28.2 million or 4.3% versus 31 December 2023. Non-current assets increased slightly to CHF 32.8 million, which was mainly due to the acquisition effect from the purchase of Verde Campo and a positive foreign currency effect. On the liabilities side, current and non-current financial liabilities saw a slight overall decrease. In combination with the higher level of cash and cash equivalents, this resulted in net debt of CHF 281.8 million as at 30 June 2024 versus CHF 298.3 million as at 31 December 2023. The equity ratio of 51.8% as at 30 June 2024 was slightly lower than the 52.1% recorded on 31 December 2023.
Cash inflow from operating activities amounted to CHF 179.3 million, CHF 11.5 million higher than the previous year’s figure of CHF 167.8 million. The change in net working capital had a positive effect, totalling CHF 2.6 million in the first half of 2024, compared to a positive effect of CHF 4.1 million in the same period in the previous year. Investments in operating net working capital were CHF 27.4 million lower than in the previous year, but this was offset by an increase in other net working capital. While interest paid was in line with the previous year, taxes paid were CHF 12.4 million lower than in the previous year, which had a positive impact on cash flow from operating activities. Cash outflow from investing activities was CHF 68.3 million, CHF 2.5 million lower than the previous year’s figure of CHF 70.8 million. Investments in property, plant and equipment fell by CHF 10.9 million and amounted to CHF 53.4 million in the reporting period. Cash outflow from acquisition activities recorded a slight increase and totalled CHF 11.0 million from a low of CHF 3.3 million in the same period last year. Excluding cash flow from acquisition activities, this resulted in a free cash flow of CHF 122.0 million, compared to CHF 100.3 million in the previous year. Cash outflow from financing activities amounted to CHF 91.4 million. This was the result of dividend payments to shareholders and minority shareholders totalling CHF 84.2 million and the cash outflow of CHF 7.2 million from the reduction in financial liabilities. In the previous year, cash outflow from financing activities amounted to CHF 65.6 million, with a net cash inflow of CHF 13.8 million resulting from the change in financial liabilities. Owing to the cash flows described above, cash and cash equivalents rose by CHF 23.2 million versus 31 December 2023, from CHF 349.1 million to CHF 372.3 million.
The outlook for the full year 2024 continues to be defined by an uncertain and challenging economic environment. Although the high inflation rates of recent years have levelled off or stabilised for the most part, consumer sentiment has only recovered tentatively in many of the markets relevant for Emmi, which can be explained to some extent by the decrease in real wages in many countries over recent years. Pressure on personnel costs will therefore remain high. The high volatility in global supply chains and sourcing markets is also likely to continue, not least due to ongoing and new geopolitical uncertainties.
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 continuous portfolio transformation in line with the strategic priorities. The Emmi Group is convinced that the highest quality, strong brands and innovative concepts are more important than ever during times of restrained consumer sentiment.
Emmi expects sales growth to be slightly higher in the second half of the year than in the first, despite the persistence of volatile market conditions. As a result, Emmi therefore continues to expect organic sales growth at Group level of 1% to 2% for the year as a whole. The division Switzerland continues to operate in a highly competitive market, with import and price pressure exacerbated by the strength of the Swiss franc. Following the decline in sales driven by milk prices during the first half of the year, the increase in milk prices as of July of this year will support the division’s growth in the second half of the year. Emmi therefore continues to forecast organic sales growth of between 0% and 1% for the division Switzerland. In its international business, Emmi expects slightly lower organic growth of 1% to 3% (previously 2% to 4%) in the division Americas and slightly higher organic growth of 2% to 3% (previously 0% to 1%) in the division Europe.
Emmi confirms its earnings forecasts, excluding the possible effects of the contemplated acquisition of the Mademoiselle Desserts Group, and expects EBIT of between CHF 295 million and CHF 315 million and a net profit margin of between 5.0% and 5.5% for 2024. It is not yet possible to reliably estimate the impact of the contemplated acquisition of the Mademoiselle Desserts Group on full year 2024 due to the fact that the closing date has not yet been determined and the effects of the purchase price allocation cannot currently be determined with sufficient accuracy.
Emmi is confirming its medium-term forecast.