FrieslandCampina reports higher revenue for 2010

Royal FrieslandCampina says that its net revenue rose by 10% to almost EUR9 billion, compared with 2009’s figures. Profit grew by 57% to EUR285 million. “The more favourable market conditions, particularly in Asia and Africa, played a major role in these improvements,” according to the company. “Thanks to FrieslandCampina’s good results and the higher guaranteed price, the milk price for the member dairy farmers, which fell in 2009, increased by 25% in 2010.”
Cees ‘t Hart, CEO of Royal FrieslandCampina comments: “The year 2010 ended with a good result. The market share of most brands were improved or maintained. Volumes rose. Both the revenue and the operating profit increased in line with our ambition to grow and create value. In 2010 the merger between Friesland Foods and Campina, which started at the end of 2008, was completed.”
Higher volumes in Asia and Africa offset declining consumption in FrieslandCampina’s home base of Europe. In 2010 more was invested in the branded products. Compared with 2009, spending on advertising and promotions rose by 12% to EUR395 million. In Asia and Africa this led to both volume growth and larger market shares. In Asia the performance of Frisian Flag and Friso was remarkably good. In Europe the market share of a number of brands, including Chocomel, Fristi, Landliebe, Campina, Friso, NoyNoy Cheese, Milli Mia and Milner cheese, increased.
Compared with 2009, global demand for dairy products from both consumers and industrial customers recovered in 2010, particularly from the second quarter of the year onwards. This acceleration in demand was due to a further recovery of the global economy, the low levels of stock held by various customers and the lower supply of milk products to the global market due, primarily, to droughts.
China showed a sharp rise in demand for milk powder and ingredients. In Russia, substantial growth for consumer products went hand in hand with a drop in milk production due to a heat wave and forest fires in the summer. In Germany and the Netherlands consumption was reasonably stable, but in countries such as Greece, Romania and Hungary economic setbacks put volumes under severe pressure.
In the second half of 2010 the export of dairy products to countries outside Europe received a boost from the weaker euro against other currencies. This made European dairy products more competitive compared to products from other regions. The price levels of the different commodities, such as skimmed and full-cream milk powder, whey powder, butter and foil cheese remained above the 2009 level for virtually the entire year. These price levels are also guidelines for the price developments of other dairy products.
Global demand for dairy is expected to pick up slightly in 2011, especially as a result of increasing consumption in emerging countries, the company says. However, dairy consumption in Europe is expected to remain under pressure.