Profit increase driven by international business



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Annual results 2016






Profit increase driven by international business






Lucerne, 22 March 2017Acquisitions enabled Emmi to achieve 1.4 % sales growth to CHF 3,259 million in 2016. Earnings increased more than sales. Earnings before interest and taxes (EBIT) rose by 7.3 % to CHF 202.7 million. Net profit amounted to CHF 140.3 million, 16.7 % higher than in the previous year. Based on this positive result – which slightly exceeded expectations – distribution of a dividend from capital contribution reserves of CHF 5.90 gross (2016: CHF 4.90) per registered share will be proposed to the General Meeting on 20 April 2017. Emmi expects conditions to remain challenging in 2017, but nonetheless wants to achieve slightly higher sales and to stabilise its improved earning power.




Emmi generated net sales of CHF 3,259 million in 2016 (2015: CHF 3,214 million), which corresponds to an increase of 1.4 %. In organic terms, i.e. adjusted for currency and acquisition effects, the result was a decline of 1.0 %, which is at the lower end of the -1 % to +1 % range forecast in August 2016.


The acquisition effects are attributable to the following companies:

  • Purchase of the cheese business of J.L. Freeman (Canada, 15 April 2015)
  • Acquisition of Redwood Hill (USA, 31 December 2015)
  • 60 % stake in Bettinehoeve (Netherlands, 2 February 2016)
  • Increased stake in SDA Chile (Chile, 19 May 2016)
  • Acquisition of Cowgirl Creamery (USA, 31 May 2016)


Earnings, unlike sales, exceeded expectations: EBIT increased by 7.3 % from CHF 188.9 million to CHF 202.7 million, with an EBIT margin of 6.2 % (2015: 5.9 %). Net profit was CHF 140.3 million compared with CHF 120.2 million in the previous year, resulting in a net profit margin of 4.3 % (2015: 3.7 %).


Urs Riedener, CEO Emmi Group, comments: “Given the pressure on the Swiss business, this is a pleasing result. This success has been driven by further progress abroad, the geographical expansion of the Operational Excellence programme and the good performance of higher-margin brands. Switzerland remains at the heart of our strategy.”




Sales trends by business division



Switzerland*: consistently high pressure from imports and competition


As communicated in February, sales in the business division Switzerland fell by 2.9 % to CHF 1,741.3 million (2015: CHF 1,793.3 million). This was the result of a price effect of -1.3 % and a volume effect of -1.6 %. The business division Switzerland accounted for 53 % of Group sales (2015: 56 %).



Americas*: solid growth in the US and Tunisia


Sales in the business division Americas rose from CHF 798.1 million to CHF 865.6 million. This corresponds to growth of 8.5 %, or 2.8 % in organic terms (adjusted for currency and acquisition effects). The business division Americas accounted for 27 % of Group sales (2015: 25 %).



Europe*: Brexit hampers sales of desserts from Italy


In the business division Europe, sales increased by 6.5 % to CHF 519.0 million (2015: CHF 487.3 million). In organic terms, however, the result was a decline of 0.2 %. This was primarily a consequence of the weaker pound sterling, which, in particular, made it more difficult to export A-27 desserts from Italy to the UK. The business division Europe accounted for 16 % of Group sales (2015: 15 %).



Sales trend Global Trade*: economic slowdown and weak currencies


Sales in the business division Global Trade fell by 1.7 % (a decline in organic terms of 1.0 %) to CHF 132.9 million (2015: CHF 135.2 million). This is largely attributable to the economic slowdown and weak currencies in various emerging markets. Global Trade accounted for 4 % of Group sales (2015: 4 %).



*Please find more detailed information on Emmi’s sales performance in 2016 in the media release dated 2 February 2017.




Efficiency gains and an improved product portfolio result in increased profitability


Emmi’s gross profit rose by CHF 61.8 million to CHF 1,179.5 million in 2016 (2015: CHF 1,117.7 million). This resulted in a gross profit margin of 36.2 % versus 34.8 % in 2015. This encouraging improvement is the result of further increases in productivity. Branded products also gained in importance in the product portfolio, with a consequent positive effect on the gross profit margin.


Operating expenses increased by CHF 46.7 million, or 5.8 %, to CHF 856.1 million in 2016 (2015: CHF 809.4 million), therefore growing more than sales. The reasons for this are the 5.5 % higher personnel expenses on account of rather personnel-intensive new Group companies as well as the inability of companies whose sales figures were lower than in the previous year to reduce their personnel expenses proportionately. In Switzerland, for example, Emmi again opted not to introduce changes to working hours or to move jobs abroad. Other factors in operating expenses included higher investments in the marketing of branded products (+8.3 %) and increased spending on IT in connection with the rollout of SAP in Switzerland (administrative expenses +20.0 %).


As a consequence, earnings before interest, taxes, depreciation and amortisation (EBITDA) increased by CHF 13.3 million to CHF 328.2 million (2015: CHF 314.9 million).


Depreciation and amortisation declined by CHF 0.9 million in the period under review to CHF 125.8 million (2015:CHF 126.7 million). The depreciation on property, plant and equipment fell by CHF 2.9 million, while amortisation on intangible assets increased by CHF 2.0 million due to acquisitions and the rollout of SAP in Switzerland mentioned above. This meant that earnings before interest and taxes (EBIT) rose by 7.3 % to CHF 202.7 million (2015: CHF 188.9 million). The EBIT margin increased from 5.9 % to 6.2 %.


The net financial result decreased significantly year-on-year, by CHF 7.5 million to CHF 14.6 million (2015: CHF 22.1 million). This was a consequence of negative currency effects from 2015. In the period under review, income taxes increased by CHF 1.9 million to CHF 33.7 million (2015: CHF 31.8 million).


The bottom line result for the 2016 financial year is a net profit of CHF 140.3 million (2015: CHF 120.2 million) and a net profit margin of 4.3 % (2015: 3.7 %). This corresponds to a rise of 16.7 %.





Emmi expects that conditions in the dairy industry will continue to be challenging and that competition will remain intense.


The massive pressure exerted by imports and retail tourism are likely to persist in Switzerland in 2017. Emmi intends, however, to stabilise sales in its home market with strong brands and innovations. It expects that the business division Americas will continue to perform well in the US and Tunisia, while the markets in Spain and France are likely to remain challenging. In the business division Europe, the weak pound sterling is making imports from Italy (desserts), Germany (Onken yogurt), and Switzerland (Caffè Latte and cheese) more expensive. This is going to hamper sales in 2017. It can be assumed that those exports from Switzerland with strong and well differentiated brand concepts, such as Caffè Latte, speciality cheese from Kaltbach and Der Scharfe Maxx, will hold their ground, while easier substitutable products will continue to find it difficult.


Overall, the international business will have a beneficial effect on sales development, mainly because of the acquisitions already made and the good momentum built up in the business division Americas.



Sales and profit development


The factors set out above are likely to increase organic Group sales by between 1 % and 2 % in 2017.


Despite the highly competitive environment and difficult market conditions in various countries Emmi expects earnings can be maintained at the same level as in 2016. Its subsidiaries abroad will again play a major part in this.



Organic sales growth outlook for 2017:

  • Group:                                            1 % to 2 %
  • Business division Switzerland:      -2 % to 0 %
  • Business division Americas:           3 % to 5 %
  • Business division Europe:               0 % to 2 %



Medium-term prognoses for annual organic sales growth (average):

  • Group:                                           2 % to 3 %
  • Business division Switzerland:      0 % to 1 %
  • Business division Americas:         4 % to 6 %
  • Business division Europe:             1 % to 3 %



Due to its low weighting, Emmi does not provide forecasts for the business division Global Trade.




Emmi Group key figures





Net sales in CHF million



   Change vs. 2015 in %



      Acquisition effect in %



      Currency effect in %



      Net sales increase in organic terms (in loc. currency) in %






Earnings before interest, taxes, depreciation and amortisation (EBITDA) in CHF million



   as % of net sales



Earnings before interest and taxes (EBIT) in CHF million



   as % of net sales



Net profit in CHF million



   as % of net sales



Investment in fixed assets (excl. acquisitions) in CHF million



   as % of net sales






Headcount (full-time equivalents) as at 31.12.



   of which in Switzerland



Net sales per employee in CHF 000s (average)



Volume of milk processed in kg million






Total assets



   of which shareholders’ equity incl. minority interests



      as % of total assets



Market capitalisation