Emmi: Annual results 2018
Date 02.28.2019 | Category: News
Emmi increased its sales by 2.8 % (2.3 % in organic terms) to CHF 3,457 million in 2018. Earnings before interest and taxes (EBIT) rose by 5.3 % to CHF 217 million. Adjusted net profit amounted to CHF 175 million, 8.6 % higher than in the previous year. The medium-term forecasts have been adjusted slightly upwards in terms of net profit margin.
Based on the good sales performance in all three major business divisions, earnings generated slightly exceeded the Group’s expectations. The business division Europe and recent acquisitions made an important contribution to this result. EBIT increased by 5.3 % from CHF 205.8 million to CHF 216.7 million, resulting in an EBIT margin of 6.3 % (2017: 6.1 %). Adjusted net profit was CHF 175.5 million, compared with CHF 161.6 million in the previous year, resulting in an adjusted net profit margin of 5.1 % (2017: 4.8 %).
Conditions in Switzerland remain challenging for Emmi. The competitive environment will continue to be tough, and some of the predicted increase in retail sales will be attributable to further growth in imports. Sales in the business division Switzerland will therefore remain under pressure, especially as the positive effect of a higher milk price is likely to be eliminated in 2019. Emmi’s goal is to achieve stable to slightly higher organic sales in Switzerland through strong brand concepts.
Strong brands and added-value concepts are also an important success factor in the business division Europe. While it is currently very difficult to assess the impact of Brexit on Europe as a whole, Emmi anticipates organic growth in the business division Europe. The Italian dessert companies and goat’s milk products from the Netherlands are likely to play a key role here. The abandonment of sales that will become unprofitable due to price pressure, on the other hand, will have a dampening effect. Emmi is also hoping for a positive impact from exports of speciality cheeses and Emmi Caffè Latte from Switzerland.
In the business division Americas, Emmi expects further significant growth in demand in Tunisia (milk, fresh products), the US (cheese, goat’s milk specialities) and Chile (milk, fresh products) in 2019. Foreign currency effects in countries such as Chile, Mexico and Tunisia will remain an issue, however.
With regard to raw material prices, Emmi expects milk to remain largely stable in its most important markets. The price level for the most important non-dairy raw materials (e.g. coffee and fruit) should be stable to slightly higher. Emmi expects higher prices above all in the energy and transport sectors and in packaging.Source: EmmiAuthor: Sossna