Acquisitions Boost Emmi
Acquisitions enabled Emmi, the Swiss dairy group, to achieve 1.4 % sales growth to SFr3.259 billion (€3.047 billion) in 2016. In organic terms (adjusted for currency and acquisition effects), sales declined by 1.0 %, which is at the lower end of the -1 % to +1 % range forecast in August 2016.
However, earnings increased more than sales. Earnings before interest and taxes (EBIT) rose by 7.3 % to SFr202.7 million. Net profit amounted to SFr140.3 million, 16.7 % higher than in the previous year, resulting in a net profit margin of 4.3 %, up from 3.7 % in 2015.
Emmi expects conditions to remain challenging in 2017, but nonetheless plans to achieve slightly higher sales and to stabilise its improved earning power.
Urs Riedener, chief executive of Emmi Group, comments: “Given the pressure on the Swiss business, this is a pleasing result. This success has been driven by further progress abroad, the geographical expansion of the Operational Excellence programme and the good performance of higher-margin brands. Switzerland remains at the heart of our strategy.”
Sales in the Switzerland business division fell by 2.9 % to SFr1.74 billion. This was the result of a price effect of -1.3 % and a volume effect of -1.6 %. The business division Switzerland accounted for 53 % of group sales in 2016, down from 56% in 2015.
The acquisitions that impacted favourably on Emmi’s overall results were:
* Purchase of the cheese business of JL Freeman (Canada, 15 April 2015);
* Acquisition of Redwood Hill (USA, 31 December 2015);
* 60 % stake in Bettinehoeve (Netherlands, 2 February 2016);
* Increased stake in SDA Chile (Chile, 19 May 2016);
* Acquisition of Cowgirl Creamery (USA, 31 May 2016).
