Sales performance 2015

 

International business and branded products support Emmi’s sales


 

 

Media release

 

Sales performance 2015

 

 

 

 

 

 

International business and branded products support Emmi’s sales

 

 

 

 

 

Lucerne, 4 February 2016Emmi generated net sales of CHF 3,213.9 million in 2015. In organic terms, i.e. adjusted for currency and acquisition effects, this corresponds to a decline of -3.0 %. Emmi therefore coped well with the euro shock, particularly in the international markets. Organic sales in the business division Europe fell by just -0.8 %, while those in the business division Americas rose by 2.8 %. The business division Switzerland came under greater pressure as a result of increased retail tourism and higher imports, posting a decline of -5.0 %. Brands such as Emmi Caffè Latte, Kaltbach and Jogurtpur grew, which is pleasing.

 

 

 

Emmi Group sales in financial year 2015

 

in CHF million

Business division

Switzerland

Business division

Americas

Business division

Europe

Business division

Global Trade

Group

Net sales 2015

1,793.3

798.1

487.3

135.2

3,213.9

Net sales 2014

1,888.1

840.0

508.8

167.1

3,404.0

Difference 2015/2014

-5.0 %

-5.0 %

-4.2 %

-19.1 %

-5.6 %

 

 

 

 

 

 

Acquisition effect*

-

-1.7 %

7.9 %

-1.8 %

0.6 %

Currency effect

-

-6.1 %

-11.3 %

-

-3.2 %

Organic sales growth

-5.0 %

2.8 %

-0.8 %

-17.3 %

-3.0 %

* Positive acquisition effects came from the increased stake in German dairy Gläserne Molkerei (with effect from 1 October 2014) and the purchase of the cheese business of Canadian company J.L. Freeman (with effect from 15 April 2015). Negative acquisition effects resulted from the sale of Italian company Trentinalatte (with effect from 31 October 2014) and Emmi Penn Yan in the US (with effect from 18 December 2014).

 

In 2015, Emmi generated sales of CHF 3,213.9 million, a decline of -5.6 % over the previous year (CHF 3,404.0 million). In organic terms, i.e. adjusted for currency and acquisition effects, sales at Group level fell by -3.0 %. The cheese segment came under strong pressure. By contrast, the performance in fresh products (e.g. yogurt, milk drinks) was positive, as important brands such as Emmi Caffè Latte, Jogurtpur, Onken, Bontà Divina and Rachelli delivered growth.

 

Emmi’s CEO Urs Riedener stated: “Our international business made a major contribution to mitigating the considerable drop in sales in Switzerland. The fact that this was achieved despite the necessary price increases for export products demonstrates how robust our brands are. Price and import pressure is a challenge in Switzerland, which we will continue to face in 2016.”

 

 

Business division Switzerland: stronger competitive pressure in the second half

 

Sales by product group: business division Switzerland

in CHF million

Sales
2015

Sales
2014

Organic
growth

Dairy products

678.5

710.1

-4.5 %

Cheese

503.5

554.9

-9.3 %

Fresh products

350.5

343.3

2.1 %

Fresh cheese

116.6

126.0

-7.4 %

Powder/concentrates

61.9

73.2

-15.4 %

Other products/services

82.3

80.6

2.1 %

Total Switzerland

1,793.3

1,888.1

-5.0 %

 

Sales in the business division Switzerland fell significantly more than expected, by -5.0 % from CHF 1,888.1 million to CHF 1,793.3 million. Volume effects accounted for -3.3 % and price effects for -1.7 %. Emmi had forecasted a decline of between -4 % and -3 %.

 

This performance is due, among other factors, to the increase in imports, which was particularly marked with regards to cheese. In addition, retail tourism in areas close to the Swiss border rose significantly again due to the low euro exchange rate, putting pressure on Swiss retailers and food producers. The resulting price and cost pressure is set to continue.

 

Despite the challenging situation, there were also positive developments in the Swiss market. Various brand concepts proved to be extremely robust and recorded increased sales. These include the fresh products Emmi Caffè Latte, Jogurtpur and YoQua, the new protein-rich yogurt.

 

Sales of dairy products (milk, cream, butter) fell in line with the market. In the cheese segment, AOP cheeses posted significant declines, while the Kaltbach specialities and Der Scharfe Maxx generated slightly higher sales. Strong import pressure also left its mark on fresh cheese, both in terms of price and volumes.

 

The business division Switzerland accounted for 56 % of Group sales (previous year: 55 %).

 

 

Business division Americas: good organic growth in the US and Tunisia

 

Sales by product group: business division Americas

in CHF million

Sales
2015

Sales
2014

Difference
2015/2014

 

Acquisition
effect

Currency
effect

Organic
growth

Cheese

329.5

315.4

4.5 %

 

3.2 %

0.1 %

1.2 %

Dairy products

239.1

267.1

-10.5 %

 

-4.3 %

-10.1 %

3.9 %

Fresh products

175.5

197.7

-11.2 %

 

-6.6 %

-10.8 %

6.2 %

Powder/concentrates

1.1

5.5

-80.8 %

 

-

-1.8 %

-79.0 %

Other products/services

52.9

54.3

-2.4 %

 

-

-5.6 %

3.2 %

Total Americas

798.1

840.0

-5.0 %

 

-1.7 %

-6.1 %

2.8 %

 

The business division Americas includes not only the US, Canada and Chile, but also Spain, France and Tunisia.

 

Sales fell by -5.0 % from CHF 840.0 million to CHF 798.1 million. In organic terms, i.e. excluding currency and acquisition effects, this resulted in growth of 2.8 %. This was below the original expectations of 3 % – 5 % due, among other factors, to persistently low milk prices. Strong negative currency effects resulted in all markets except the US. The positive acquisition effect is attributable to the cheese business of J.L. Freeman, while the negative acquisition effect resulted from the sale of Emmi Penn Yan.

 

Organic sales growth was due primarily to the good performance in Tunisia and the US. In Tunisia, yogurts, milk and desserts sold under the Vitalait brand generated significantly higher sales, adjusted for currency effects, with a corresponding positive impact on the dairy and fresh products segments. The latter was also boosted by growth in Kaiku’s lactose-free products and clear double-digit growth of Emmi Caffè Latte in Spain. In the US, both cheese exports to the US (primarily Kaltbach) and locally manufactured cow’s and goat’s milk cheese experienced a boost.

 

Chile and France were limiting factors, with both markets facing difficult economic conditions.

 

The business division Americas accounted for 25 % of Group sales (previous year: 25 %).

 

 

Business division Europe: notably robust sales despite price increases

 

Sales by product group: business division Europe

in CHF million

Sales
2015

Sales
2014

Difference
2015/2014

 

Acquisition
effect

Currency
effect

Organic
growth

Fresh products

212.2

257.5

-17.6 %

 

-11.6 %

-8.1 %

2.1 %

Cheese

122.6

136.3

-10.0 %

 

2.8 %

-11.7 %

-1.1 %

Dairy products

91.1

42.0

116.8 %

 

153.7 %

-29.8 %

-7.1 %

Fresh cheese

39.9

56.8

-29.8 %

 

0.2 %

-9.7 %

-20.3 %

Powder/concentrates

14.9

7.0

111.7 %

 

17.8 %

-29.0 %

122.9 %

Other products/services

6.6

9.2

-28.5 %

 

1.8 %

-9.8 %

-20.5 %

Total Europe

487.3

508.8

-4.2 %

 

7.9 %

-11.3 %

-0.8 %

 

In the business division Europe, sales fell by -4.2 % from CHF 508.8 million to CHF 487.3 million. In organic terms, i.e. adjusted for currency and acquisition effects, sales declined by just -0.8 %. This is remarkable given the weakness of the euro, lower milk prices and the rigorously implemented price increases, and exceeded Emmi’s expectations. The original forecast was a decline of between -4 % and -2 %.

 

Increasing the stake in Gläserne Molkerei resulted in a positive acquisition effect. The negative acquisition effect was due to the sale of Trentinalatte.

 

In fresh products, sales of Emmi Caffè Latte and Onken (in the UK) as well as those of the Italian speciality desserts of A-27 and Rachelli increased in organic terms. In cheese, the Kaltbach specialities and Der Scharfe Maxx proved resilient. Both brands saw increases in Germany and Austria.

 

By contrast, the cheese business suffered clearly in the AOP cheese area due to negative currency developments. The organic decline in dairy products was primarily due to the lack of availability of organic milk at Gläserne Molkerei.

 

The business division Europe accounted for 15 % of Group sales (previous year: 15 %).

 

 

Business division Global Trade: fewer butter and milk powder exports, weak emerging markets

 

The business division Global Trade covers direct sales from Switzerland to customers in international markets, primarily in countries where Emmi has no subsidiaries. These include Asian and Eastern European markets, as well as most South American countries and the Arabian Peninsula.

 

Sales amounted to CHF 135.2 million compared with CHF 167.1 million in 2014. This corresponds to a fall of -19.1 %, or -17.3 % in organic terms.

 

The negative performance was due primarily to lower butter and milk powder exports (effect 2015: CHF -17.2 million). Other reasons include the decline in contract manufacturing and the economic slowdown in countries such as Japan, Brazil and Russia. By contrast, the strong position of Swiss Premium Yogurts in Asia was expanded.

 

Global Trade accounted for 4 % of Group sales (previous year: 5 %).

 

 

Outlook

 

Emmi’s evaluation of the economic environment in the half-year report published in August has not changed significantly since. The same applies to the conditions within the Emmi Group. As a result, Emmi maintains its profit forecast for 2015.

Emmi will announce its forecast for sales and net profit in 2016 when the results for the financial year 2015 are published. The analysts’ and media conference will take place on 24 March 2016 in Lucerne.

 

 

 

 

 

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