Half-year results 2015
Emmi withstands the strong Swiss franc
Lucerne, 18 August 2015 – Emmi generated sales of CHF 1,563.0 million in the first half of 2015, (previous year CHF 1,624.9 million), a drop of -3.8% (organically -1.7 %). This is slightly better than expected. It shows that Emmi has coped well with the negative trend of the euro. The overall result was an adjusted net profit of CHF 46.6 million (previous year CHF 45.2 million) and an adjusted net profit margin of 3.0 % (previous year 2.8 %). This result exceeds Emmi’s expectations and is primarily due to increased earnings and adjustments in foreign operations. For 2015, Emmi is modifying its EBIT outlook to between CHF 170 million and CHF 180 million (forecast in March 2015: CHF 150 million and CHF 160 million).
Emmi Group key figures
Amounts in CHF million
First half of 2015
First half of 2015, adjusted*
First half of 2014
First half of 2014, adjusted*
of which Switzerland
of which Americas
of which Europe
of which Global Trade
Acquisition effect in %
Currency effect in %
Organic sales growth in %
as % of net sales
as % of net sales
as % of net sales
*Adjusted for non-recurring effects, which were minimal during the reporting period. The extraordinary sale of property, plant and equipment resulted in a loss of CHF -0.5 million at EBIT level and CHF -0.4 million at net profit level. By contrast, there were significant non-recurring effects in the previous year’s period which had an impact of CHF -34.5 million on EBIT and CHF -35.4 million on net profit. These resulted from the extraordinary impairment in Italy as well as the extraordinary gains on the sale of property, plant and equipment.
In the first six months of 2015, Emmi achieved sales of CHF 1,563.0 million, -3.8 % (organically -1.7 %), which is below the previous year’s figure of CHF 1,624.9 million. The business divisions Switzerland and Americas performed in accordance with Emmi’s forecasts. The business division Europe performed better than expected.
With an adjusted EBIT of CHF 84.9 million compared with CHF 74.3 million (+14.3 %), the adjusted EBIT margin was 5.4 % (previous year 4.6 %). The adjusted net profit was CHF 46.6 million, compared with CHF 45.2 million in the previous year (+3.1 %), with an adjusted net profit margin of 3.0 % (previous year 2.8 %). Emmi has therefore exceeded its profit targets.
Urs Riedener, CEO of Emmi: “This encouraging performance is mainly due to the range of measures that have been consistently applied since the beginning of the year, as well as enhanced earnings in the Europe and Americas business divisions. Our goal in the second half of the year is to keep the decline in sales within reasonable limits – particularly in Switzerland.”
Business division Switzerland: pressure due to high import pressures and retail tourism
In the Switzerland business division, sales were 3.0 % below the same period last year at CHF 874.2 million (previous year CHF 900.9 million). This development reflects the decline in retail business, the fierce price competition in the industrial business and flagging tourism due to the currency situation.
All strategic segments in the domestic market posted a drop in sales. The decline in dairy products (milk, cream, butter) was caused by a decline in volumes and lower milk prices. Lower sales of cheese reflected a 7.8 % increase in cheese imports. The almost stable sales of fresh products are due to the good performance of Emmi Caffè Latte, Pure Swiss Yogurt and the new, protein-rich YoQua yogurt. Volumes of fresh cheese remained virtually stable, although prices dropped as a result of high import pressures. Powder/concentrates suffered as a result of the fierce price competition in the industrial business.
The business division Switzerland accounted for 55.9 % of Group sales (previous year: 55.5 %).
Net sales by product group: Switzerland
in CHF million
Business division Americas: good organic growth in USA and Tunisia
The business division Americas includes not only the US, Canada and Chile, but also Spain, France and Tunisia. This is due to the fact that Kaiku’s various markets are allocated to the same division.
In the sales division Americas, sales amounted to CHF 387.3 million (previous year CHF 408.2 million), which corresponds to a decline of -5.1 %. In organic terms, i.e. excluding currency and acquisition effects, this resulted in growth of 3.0 %. The negative acquisition effect is due to the sale of the business activities of Emmi Penn Yan in December 2014. The positive acquisition effect is accounted for by the purchase of the cheese business of J.L. Freeman in Kanada on 15 April 2015. The negative currency effects apply to Tunisia, Chile, Spain and France.
The factors that made a positive contribution included the cheese business in the USA, with an increase in imported Swiss cheese and locally produced cheese. Tunisia saw growth in dairy products and fresh products. Spain increased sales of Emmi Caffè Latte and the Kaiku lactose-free range. Sales in Chile, however, experienced a decline, which is primarily due to the stagnating economy.
The business division Americas accounted for 24.8 % of sales (previous year: 25.1 %).
Net sales by product group: Americas
in CHF million
Business division Europe: organic decline lower than expected
The business division Europe includes Benelux, Germany, the UK, Italy and Austria.
Sales in the business division Europe amounted to CHF 230.8 million (previous year CHF 233.9 million), a decrease of -1.3 % (organically -0.7 %). The division therefore withstood the turbulence of the euro better than expected. The negative acquisition effect resulted from the sale of Trentinalatte in October 2014. Positive acquisition effects were also achieved through the increased stake in the German organic dairy Gläserne Molkerei in October 2014.
Fresh products posted organic growth thanks to Emmi Caffè Latte in the UK, Austria and Benelux, and the dessert business in Italy. However, the cheese business in Europe, largely concentrated on Swiss cheese exports, suffered as a result of the weak euro, particularly exports to Italy. Dairy products and cheese included Gläserne Molkerei sales for the first time.
The business division Europe accounted for 14.8 % of Group sales (previous year: 14.4 %).
Net sales by product group: Europe
in CHF million
Business division Global Trade: economic driver in the BRICS countries falters
The business division Global Trade covers direct sales from Switzerland to customers in international markets, mainly in countries where Emmi has no subsidiaries or holdings. These include the Asian and Eastern European markets, as well as certain South American countries (such as Brazil) and the Arabian Peninsula.
The division generated sales of CHF 70.6 million compared with CHF 81.9 million in the previous year. The decrease of -13.8 % (organically -13.3 %) reflects the economic slowdown in many of the markets served. There was also a decline in powder/concentrates as the result of lower milk collection and the associated reduction in exports to decrease pressure.
Global Trade accounted for 4.5 % of Group sales (previous year: 5.0 %).
Net sales by product group: Global Trade
in CHF million
Total Global Trade
Increased earnings in the foreign divisions boost operating result
Adjusted earnings before interest and taxes (EBIT) improved in the first half of 2015 from CHF 74.3 million to CHF 84.9 million, resulting in an adjusted EBIT margin of 5.4 % (previous year 4.6 %). Including non-recurring effects, EBIT increased from CHF 39.8 million to CHF 84.4 million.
Adjusted net profit amounted to CHF 46.6 million. Compared with the adjusted amount of CHF 45.2 million in the previous year’s period, this corresponds to an improvement of 3.1 %. The adjusted net profit margin was 3.0 % (previous year 2.8 %). Including non-recurring effects, net profit increased from CHF 9.8 million to CHF 46.2 million, which is above the outlook published in March.
The rapidly and consistently implemented measures introduced in response to the weak euro contributed to the good result. Other significant factors were earnings enhancements in the business divisions Europe and Americas as a result of price increases, efficiency measures at foreign subsidiaries and last year’s sale of entities with unsatisfactory earnings figures.
Outlook for full-year 2015
Emmi expects the market situation to remain challenging for the rest of 2015. In Switzerland, higher retail tourism and import pressures, the fierce price competition in the industrial business, and declining consumption in the food service sector will be noticeable. The company anticipates that the negative effects of the weak euro on sales in Switzerland might be even greater in the second half of the year.
In the business division Americas, good organic growth is anticipated, especially in Tunisia, while development in Chile and France is likely to remain muted.
In the business division Europe, the northern European markets will be more stable than those in southern Europe. The pressure will be greatest in economically stricken Italy and price-sensitive Germany, while the UK will benefit as a non-member of the eurozone.
At Group level, Emmi is adhering to its sales target and still expects an organic decrease in sales of -3 % to -2 %. Emmi anticipates an EBIT of between CHF 170 million and CHF 180 million (previously CHF 150 million to CHF 160 million). The net profit margin is expected to be slightly over 3 %.
Half-year report 2015:
Investor presentation of 25 August 2015: