Emmi reports improved sales in first half of 2018

In the first six months of 2018, dairy giant Emmi has done well and generated consolidated sales of CHF1,675 million (€1.5bn) compared to CHF1,600 million in the same period of 2017. “The positive sales development is broadly based. We are pleased that we were able to grow organically in the three major divisions,” says Urs Riedener, CEO of Emmi.
While earnings before interest and taxes (EBIT) rose by 5.1% from CHF90.4 million to CHF95 million, net income nearly doubled in the first half of 2018, from CHF66 million to CHF129 million.
The strong increase is due to the sale of the minority interest in The Icelandic Milk and Skyr Corporation (“siggi’s”). Shareholders benefited from this in spring 2018 in the form of a special dividend.
Gross profit rose in the first half of 2018 in step with sales by 4.8% to CHF604.5 million (previous year: CHF577.1 million). The gross profit margin therefore remained constant at 36.1%. Through rationalisation and productivity measures, it was possible to compensate for the negative effects of the continuing high price pressure.
Net profit including minority interests was CHF132.9 million and was significantly impacted by the gain on the sale of the minority interest in siggi’s. This amounted to CHF56.9 million after taxes. As a result, adjusted net income was CHF76 million. It was thus CHF7 million higher than the previous year’s profit.
The revenue and earnings targets for the full year 2018 are still valid (revenue growth 1.5% to 3.0%, EBIT CHF205-215million, net profit margin 4.5% to 5.0%). Only the sales forecast for the Europe division will increase the bandwidth from 2% to 4% (instead of 1% to 3%).
In the second half of 2018, Emmi will face an unchanged competitive environment.
The price pressure is undiminished. In addition, important cost blocks will increase due to inflation.
The growth curve in sales is likely to flatten, as the strong fourth quarter of 2017 will be difficult to beat. Furthermore, it is currently not possible to assess all the effects of heat summer on the agricultural markets, the company says.

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