Emmi 2023 growth only half as strong as in the previous year
Published: Thursday, Jan 25th 2024, 08:00
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Emmi grew organically in 2023, but at a much slower rate than in the previous year. Emmi even shrank in the Europe region.
Sales rose by 0.3% to 4.242 billion Swiss francs. Excluding currency and acquisition effects, organic growth amounted to 3.5 percent. In the previous year, Emmi had grown by 7 percent. At 3.5 percent, however, the company is still within its own expectations of 3 to 4 percent organic growth.
As in the previous year, this was price-driven, according to a statement on Thursday. In other words, the Central Swiss milk processor demanded higher prices for its products, which include the Caffè Latte range, the Kaltbach cheese brand and Toni yogurts, for example. However, these have been implemented "responsibly", it says.
Growth in Switzerland and the Americas
The two largest divisions, Switzerland and the Americas, contributed to organic growth. Business grew most strongly in the Americas region, which includes the US, Canada, Mexico, Brazil and Chile as well as Tunisia and Spain. This region grew organically by 5.7 percent. However, according to Emmi, this was slightly below expectations.
"In the USA, our most important foreign market, cheese specialties, which are predominantly in the premium segment, performed poorly overall due to their high price level and tense consumer sentiment," the report explains. And in Tunisia, the milk shortage had a negative impact on sales in the dairy products segment.
One of the growth drivers in the business division Americas was the feta business in the US - Emmi owns the largest feta producer there, Athenos. Chilled premium desserts also performed well in the US. In addition, the markets of Chile, Mexico, Spain and Brazil grew in particular.
With organic growth of 3.8 %, the Switzerland region grew more strongly than Emmi had expected. With a sales contribution of 41.5 %, the region is still the most important region, but is gradually being overtaken by the Americas (40 %).
In Switzerland, growth was attributable in particular to brands such as Emmi Caffè Latte, Emmi Energy Milk, Aktifit, Luzerner Rahmkäse and Gerber. In addition, the milk price increase by the milk industry organization and the recovery of the food service business after the pandemic had a positive impact on growth.
Europe is shrinking
There was a setback in the Europe division, which shrank organically by 0.4 percent. The export business with cheese from Switzerland, particularly in Germany and the Netherlands, hampered sales growth, according to the statement. Emmi attributes this to the price- and exchange rate-influenced slowdown in consumer demand. In other words, Swiss dairy products were too expensive for local consumers.
The Global Trade division, in which Emmi mainly combines direct sales and exports from Switzerland to countries where the company does not have its own factories, recorded an organic decline of 5.7 percent. The discontinuation of business in Russia and slightly lower sales in Asia had an impact on the cheese division there, according to the statement. However, with a contribution to turnover of less than 3 percent, the division is also very small.
The profit figures for the past financial year will then be presented on February 29.
©Keystone/SDA
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