Emmi increases half year sales
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Emmi Group in Switzerland increased its half-year sales by 7.1% compared to last year and has earned CHF2.02 billion (€2.05bn) in a persistently challenging environment and sees itself confirmed on its strategic course.
Foreign business, differentiated brand concepts such as Emmi Caffè Latte and innovative desserts as well as the recovery in the food service business primarily contributed to the broad-based organic growth of 5.4%.
Emmi also made progress in the portfolio transformation, for example with the consolidation of the Athenos business in the US and in its commitment to sustainable dairy farming with the launch of the ‘KlimaStaR Milch’ resource project.
Due to the sales price increases caused by input costs, which had a delayed effect, sales developed more strongly than the operating result with an EBIT of CHF108.6 million (€110.6m) and a net profit of CHF78.1 million (€79.6m).
According to Emmi, in 2022 as a whole there is no foreseeable improvement in the gloomy economic and geopolitical conditions, which are characterised by inflation, massively higher input, logistics and energy costs, as well as the war in Ukraine and the resulting pressure on margins. In addition, there are increasing risks of a wage-price spiral as well as interest rate, currency and pandemic developments. The biggest uncertainty factor is the energy supply with gas and electricity.
The sales price increases will continue to have an effect in the second half of 2022. However, also due to the uncertain consumer demand in the overall economic context, these will not fully compensate for the losses in the first half of 2022.
Through the consistent and disciplined implementation of strategic priorities with a focus on differentiated brand concepts, the development of profitable niches and the acceleration of ongoing excellence and efficiency programs, Emmi believes it is on course to successfully counteract these strongly negative effects, which will continue in the second half of 2022.
The company says it is strategically well positioned and it is sticking to its medium-term forecast. For 2022 as a whole, Emmi expects organic growth of 5% to 6% (previously 2.5% to 3.5%) at group level, driven by higher input costs and inflation.
In a market for dairy products that continues to be intensely competitive, with high import and price pressure including shopping tourism, which is being intensified by the weakness of the euro, Emmi is forecasting stable to slightly growing organic sales development of between 0.5% and 1.5% (previously -1% and 0%) for the Switzerland division.
The international business is expected to continue its dynamic development with organic growth in the Americas division of 10% to 12% (formerly 6% to 8%) and in the Europe division of 6% to 8% (previously 3% to 5% ).