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Abonner Emmi Schweiz AG

Emmi Schweiz AG

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

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