Up and down for Schwälbchen results
Schwälbchen’s two business areas have developed very differently under the coronavirus conditions in the past few months, but the German dairy has reported a slight increase in sales.
“A year like this doesn’t turn us around. As we are a very healthy company, we coped with 2020,” says the Schwälbchen boss Günter Berz-List, referring to both the market position and the financial position and liquidity.
Because of the exit restrictions during the pandemic, there have been declines in cold coffee drinks and ayran for consumption on the go. The reason for the overall increase was an increased demand for regional products milk, quark, sour cream and cream as well as for Spundekäs (a local cream cheese preparation) and green sauce.
According to initial estimates, milk processing increased by 2.4% to 138 million kg. This puts Schwälbchen above the national average for milk deliveries with an increase of 0.3%.
Turnover in the dairy business of Schwälbchen will increase by 1.3% to 95 million.
However, overall results are declining because the annual investment income from the fresh service subsidiary is not the same due to the negative development in this segment. The annual surplus is almost one million euros, but in 2019, earnings after taxes were €1.74 million.
“The bulk consumer fresh service as the second business area, with two locations in Mainz and Ilsfeld in Baden-Württemberg, were the company’s problem child of 2020,” Berz-List notes.
Customers include company canteens, hotels and restaurateurs as well as schools, clinics and canteens. The range of this segment includes around 10,000 items. Tightened Covid-19 restrictions at the end of the year have led to significant losses again, especially in the traditionally strong out-of-home consumption in November and December. Sales have fallen by a third and will be around €65 million. The annual deficit will probably amount to minus €2.3 million.
The CEO of the Schwälbchen Group expects sales of €150 million for the year as a whole due to the developments. In 2019, sales of €184 million were on the books.
According to estimates, earnings after taxes will drop from €3 million in the previous year to a deficit of minus €1.3 million.
Berz-List don’t want to give a specific forecast for the new year, saying, “Our hope rests on spring 2021.”
However, many people will probably work in the home office even after the coronavirus pandemic has subsided. The Schwälbchen fresh service has so far mainly been aimed at business customers, so the company will adjust its strategy in this segment.
“In the large-scale consumer segment, we cannot rely on the fact that previous customers will simply come back with the previous range,” explains Berz-List. “We will strategically rethink our customers and our range of fresh produce.”
He especially sees potential for the company in the gastronomic sector and with higher-quality products as well as pre-prepared meals in the out-of-home market.
