Emmi reports growth in 2020
In 2020, Switzerland’s largest dairy group Emmi generated net sales of CHF3.7 billion (€3.4 billion). The growth of 6.1% compared to the previous year (CHF3.4bn, €3.2bn) is composed of organic growth of 1.9%, a positive acquisition effect of 8.7% and a currency effect of -4.5%.
The tendencies from the first half of the year, which were strongly influenced by the global coronavirus, continued in the second half of the year.
Retail trade grew globally, while the food service business, convenience products and some of the branches of the food industry relevant for Emmi suffered massive losses.
Overall, organic sales growth was almost the same in the first and second half of the year. However, a detailed analysis reveals considerable geographical differences.
In Emmi’s Swiss business, for example, the sales-driving effects of the pandemic still predominated in the first half of the year, while the factors, which inhibit sales, increased in the second half of the year and the increase in imported dairy products, which has persisted for years, increased disproportionately.
On the other hand, important growth markets such as Chile and Tunisia recovered and strong European business made a significant contribution to the group’s sales growth.
The resilience of Emmi’s strategy in 2020 was not only reflected in the compensatory effect of geographical diversification. The many years of work on selected brand concepts also bore fruit. Emmi Caffè Latte was able to continue on its growth path even under difficult conditions and the business with Swiss cheese specialities – especially Kaltbach – supported growth in all divisions.
In 2020 the Switzerland division generated sales of CHF 1.6 billion (€1.6bn). Adjusted for acquisition effects (primarily the sale of Emmi Frisch-Service AG to Transgourmet), organic sales growth of 1.4% resulted in an organic sales development in line with our own expectations (1% to 2%). The outlook for the second half of the year, formulated cautiously and optimistically despite the positive half-year results for 2020, turned out to be realistic due to the sometimes very negative effects of the measures to combat the corona virus.
After a solid summer business, sales in catering and out-of-home consumption came under massive pressure in some cases, as did selected industrial customers.
In addition, foreign competition is latent and Swiss dairy products lost market share in 2020. The increased consumption of dairy products in the retail business was largely covered by imports, also because consumers are increasingly turning to imported products after a temporary cessation of shopping tourism.
The Americas division comprises the Emmi Group companies in the US, Spain (excluding Lácteos Caprinos), Chile, Brazil, Tunisia, France, Mexico and Canada.
The Americas division generated sales of CHF1.2 billion (€1.1bn) in 2020, which was an increase of 15% is primarily due to acquisition effects.
Strongly negative currency effects are primarily due to the Central and South American currencies, but also to the US dollar and the euro. Taking these effects into account, this resulted in organic growth of 1.6%.
In the cheese segment, corona-related restrictions such as closed sales areas and restaurants led to an organic decline in sales of 0.9%. Cheese exports from Switzerland to the US were still able to increase in this environment.
Due to the coronavirus, Chile and Tunisia were primarily responsible for the significantly higher demand for basic products with corresponding positive effects on the dairy products segment (organic: 12.3%) and losses in the fresh products segment (organic: -2.7%). The positive contributions, for example from Brazil (entry into the yogurt business), were unable to fully compensate for the decline in sales in California and Spain.
The Europe division comprises the Emmi Group companies in Germany, Italy, the Netherlands, Great Britain, Austria, Belgium and Lácteos Caprinos in Spain.
The Europe division generated sales of CHF630.7 million (€583.4 million), which corresponds to a growth of 6.4% compared to 2019. Organically, adjusted for acquisition and currency effects, there was strong growth of 4.4%.
In the fresh products segment, the largest in terms of sales, Emmi Caffè Latte in the UK, Austria and Germany, Italian dessert specialties and Onken yogurts were the main growth drivers (organic: 3.5%).
Significantly higher sales of Kaltbach, fondue and Swiss cheese types in the Netherlands, Germany and Great Britain led to strong organic growth in the cheese segment (organic: 9%).
The growth in dairy products (organic: 8%) is primarily the result of the corona-related higher demand for high-quality organic dairy products from the Gläserne Molkerei in Germany.