FDBusiness.com

Dutch dairy co-operative Royal FrieslandCampina increased net revenue by 10% to Eur8.97b and profit by 57% to Eur285m during its 2011 financial year as it benefited from more favourable market conditions, particularly in Asia and Africa. However, in Europe declining dairy consumption put pressure on volume.

FrieslandCampina’s Ingredients and Consumer Products International business groups made a strong contribution to the increase in revenue and operating profit. Cheese & Butter saw an improvement in operating profit. Thanks to FrieslandCampina’s good results and the higher guaranteed price, the milk price its the member dairy farmers, which fell in 2009, increased by 25% in 2010.

The net revenue of the Consumer Products International business group (Asia, Africa, the Middle East and exports) jumped 20.3% to Eur2.28b, due to a combination of volume growth, price rises and currency effects. The net revenue of Consumer Products Europe rose by 1.5% to Eur3.27b. Although growth was achieved in Russia, in most other markets volumes were lower and prices were under pressure due to increased promotional support. Despite the difficult market conditions, the market share of most of the brands was expanded or maintained.

Cees ‘t Hart, chief executive of Royal FrieslandCampina.

Cheese & Butter’s net revenue grew by 7.3% to Eur2.35b, reflecting higher prices for both products and increasing exports of cheese. The volume of cheese produced and sold was lower, partly due to the sale of the Bleskensgraaf cheese factory, but this was offset by the higher cheese and butter prices.

The net revenue of the Ingredients division rose by 37% to Eur2.06b helped by higher income from special ingredients for the food industry, such as milk powder and caseinates.

“The year 2010 ended with a good result. The market share of most brands were improved or maintained. Volumes rose. Both the revenue and the operating profit increased in line with our ambition to grow and create value,” says Cees ‘t Hart, chief executive of Royal FrieslandCampina. “In 2010 the merger between Friesland Foods and Campina which started at the end of 2008 was completed. There is a clear focus on growth, further professionalisation of the organisation and co-operation. Our market focus and efficiency have improved, so that FrieslandCampina is now ahead of schedule in realising its synergy objectives.”

During 2011, FrieslandCampina will continue to follow its ‘route2020’ development strategy, which aims for growth in dairy based beverages, baby and infant food, branded cheeses and specialised ingredients. Investments are planned to expand production capacity and to improve efficiency and innovation.