FDBusiness.com

Swiss dairy group Emmi increased net sales by 1.4% in 2011 to SFr2.72 billion (Eur2.25 billion) thanks to the encouraging performance of its latest acquisitions, to significant international growth and to newly launched products in Switzerland. The net profit margin for 2011 will be around 3%.

However, in organic terms (adjusted for the effects of acquisitions and currencies) net sales at group level fell by 1.9%. This figure is just short of expectations and is attributable to the adverse economic environment. Emmi has decided to stabilise earnings by not aiming for short-term growth.

Net sales in Switzerland declined by 2.1% to SFr1.91 billion primarily due to the abandonment of unprofitable logistics services for third parties and lower volumes in trading business. In international markets, Emmi achieved a 10.9% increase in sales to SFr811.4 million. This increase is at the upper end of Emmi’s expectations and can be attributed to the outstanding performance of its latest acquisitions (Onken, Cypress Grove Chevre and A-27), growth at Emmi Roth USA and improved sales of Emmi Caffe Latte. Growth was restrained by losses resulting from the strength of the Swiss franc, especially in exports of Swiss cheese. In local currencies and adjusted for acquisitions, growth of 3.2% was achieved.

“Given the extremely challenging environment, the result is an impressive one. I am particularly pleased by the outstanding performance of our most recent acquisitions. Our carefully considered acquisition strategy is paying dividends,” comments Urs Riedener, chief executive of Emmi.

Emmi expects raw milk prices to remain at their present level in the first half of 2012, while prices for other raw materials (coffee, fruit and cereals) and packaging costs are likely to remain stable or increase only slightly. Import pressure will persist in Switzerland. Demand in the retail trade is expected to be volatile.

Emmi expects consumer sentiment in the US and Germany- its most important markets outside Switzerland- to remain stable and to be subdued inItaly. In view of the economic situation and the value of the Swiss franc standing at 1.20 against the euro, Emmi’s success in 2012 will largely be driven by its strong brands and by products produced locally abroad, as well as by further cost savings.