Schwälbchen reports stability in downturn

Schwälbchen of Germany is struggling with the greatly changed behaviour of consumers and large customers due to the coronavirus crisis. But the dairy business continues to achieve stable results, CEO Günter Berz-List said during the company’s general assembly in Bad Schwalbach.

The manager, however, worries about the foodservice sector. This has been a growth area in recent years, with major customers such as hotels and restaurants as well as canteens and schools being supplied. “Due to the pandemic came restrictions, there was virtually no demand overnight. We felt this drastically in sales and earnings,” the CEO said.

Orders in the fresh produce division, which has around 10,000 products in its range, were cut by 50% at the height of the crisis in March and April. In terms of revenues, the decline was as much as 60%. “Something like this is not easy to make up for,” said Berz-List, referring to Schwälbchen’s half-year figures and the outlook for the year as a whole.

In order to save costs, for example a third of the truck fleet has been deregistered at the Mainz sites and in Ilsfeld in Baden-Württemberg.

The dairy business had an increase in sales of around 2% to around €45 million in the first half of the year. Milk processing has also increased by 1.2% to 58 million kilograms of milk.

In the fresh produce division, however, the revenues dropped by around one-third to €34 million. Overall, sales in the group declined in the first six months by 14 % to €80 million compared to the same period last year. According to preliminary figures, the CEO anticipates a negative consolidated result for both the half-year and the year as a whole.

By comparison, the Schwälbchen Group had sales in 2019 of around €184 million and a profit after taxes of €3 million. Much will depend on how the business develops over the next few months, how the out-of-home market will develop for Schwälbchen’s cold drinks and whether there will be a second wave of coronavirus infections with new restrictions after the holiday season.

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