Emmi on target in the first half year thanks to innovations
Lucerne (ots)
- Increase in sales despite restructuring in the international cheese business
- Successful integration and acquisition projects in Switzerland and abroad
- Chilled products: increase in export sales over 50%
- Successful product launch for Caffè Latte - the Benecol and Aloe Vera success story continues
Outlook for 2004
- Further growth in sales and profits
- Promising innovation in the cheese sector about to be launched
- Preparations underway for strategic co-operation with an international partner
Key data for the 1st half of 2004
in million CHF 2004 2003 % Income from business activities 938 921 +2 Gross profit from business activities 279 262 +6 Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) 61.9 60.5 +2 Group profit 22.0 21.5 +2 Cashflow 53 49 +7
The Emmi Group's business developed in line with expectations during the first half of 2004. Against a background of increasing competition and continuous developments in the discount business, it succeeded in maintaining its position as the Swiss market leader and in continuing to push ahead in the key European markets. In comparison to the first six months of last year, Emmi was able to increase its income from business activities (net sales) by 2 per cent to CHF 938 million. At the same time, the company racked up a group profit of CHF 22.0 million, which represents a small increase compared to the first half year of 2003. Both the gross profit (+6%) and the cash flow (+7%) were significantly improved in the period under review. Despite the discontinuation of special business in cheese export (stock reduction in the previous year) foreign sales enjoyed a substantial increase thanks to the chilled products. The market success in the Chilled Products Division made a major contribution to the generally good result. The first signs of recovery could be discerned with Emmentaler although the situation in the cheese business remains unsatisfactory.
It proved possible to conclude the preparatory work for the integration of the former Nestlé production facilities in Hirzel (ZH) on schedule at the end of June. As a result of the transaction already announced in November 2003, Nestlé owns a 4.6% shareholding in Emmi.
Emmi has also improved its market position in the Benelux countries through the acquisition of the Dutch cheese importer Craamer. The Benelux market has considerable development potential for Swiss milk and cheese products in the premium sector.
The planned building projects with an investment value of more than CHF 50 million are proceeding according to schedule. The central deep freeze store for ice cream production in Ostermundigen will be able to go into service in the course of September. The building extension at the cheese service centre in Kirchberg will be completed by mid 2005, the first production areas being ready for occupation in the autumn.
The chilled product success story continues
In the first half of the year, Emmi amalgamated the two divisions Chilled Products and Dairy Products in order to make the most of the available synergy potential and to avoid duplications. The chilled product area in particular was able to achieve a good result and consequently notched up an increase of 6% in sales in the first six months of the current year to CHF 247 million. The growth is primarily due to the encouraging trend in export business. The increasing demand made it possible to more than double sales in the period under review.
With Caffè Latte, the Emmi Group was able to launch an innovative product in several markets simultaneously for the first time in the company's history (Switzerland, Germany, the Netherlands, Austria, Spain and Portugal). The two products Benecol and Aloe Vera were also able to increase sales. The successful progress made with these products abroad has led to an increase of CHF 6 million in advertising expenditure. Ice cream sales, on the other hand, experienced a slight decline, attributable primarily to the less favourable weather in the months of May and June compared to last year.
The butter and cream business lives up to expectations
Butter and cream sales proceeded according to budget and within the anticipated range of expectations in the months January to June. With sales of CHF 246 million, the product area was able to grow by 2 percent over the comparable period last year. During the reporting period, Emmi again launched consumer-friendly innovations in the form of a new tub concept and resealable packagings in this product area. As a consequence of a decline in campaigns among the major retailers, the milk business experienced a decline in the same period.
Modest recovery in the cheese business
Against a background of sustained pressure on margins and prices for Emmentaler, the Cheese Division (including fondue/processed cheese) is able to look back on a generally satisfactory first half-year. It was almost possible to sustain the gross revenue at CHF 439 million (-1%). The Gruyère and Tête-de-Moine types in particular exhibited a positive trend whereas exports of Emmentaler cheese to Italy continue to prove difficult. In future, Emmi intends to concentrate increasingly on the premium segment and outstanding product quality with specialities such as the cave-matured Emmentaler and Gruyère both in its domestic market of Switzerland as well as abroad
Outlook for the second half of 2004: innovations and further growth
As a consequence of the remarkable success in the chilled product area, for the second half of the year Emmi will continue to focus on well-directed activities in the domestic market and especially in the key markets in Europe. The investment funds earmarked for increasing production capacities were released. Innovations will be rigorously pursued in the two divisions Chilled Products / Dairy Products and Cheese. In the course of the autumn, the cheese area will be presenting a promising and trend-setting innovation in Switzerland and at international trade fairs abroad. As part of the planned growth, the Emmi group is preparing a co-operation with an international partner and is investigating a number of opportunities in Switzerland and abroad.
Based on the progress achieved in the first half year, the Emmi Group is anticipating an increase in sales and profit in the order of 3 - 5 percent compared to the previous year.
An Extraordinary General Meeting of Emmi approved the creation of CHF 10 million authorised capital for Emmi's stock market flotation. The Board of Directors and the Group Management will initiate the relevant preparatory work in the course of the autumn and set about the project work in conjunction with the lead bank.
Contact:
Stephan Wehrle
Head of Group Communication
Tel. +41/41/227'27'86
E-Mail: stephan.wehrle@emmi.ch
Internet: http://www.emmi.ch