News Annual figures
FrieslandCampina scores slightly less on everything in 2018
A lower milk price, lower turnover and declining profits. For dairy cooperative FrieslandCampina, 2018 was slightly less than the year before, according to the annual figures published by the company on Thursday 28 February. This is mainly due to fiercer competition on the world market.
The profit of the cooperative concern amounts to €2018 million in 203, a decrease of 10,6% compared to 2017. According to the company, this is mainly due to lower revenues from basic dairy products (such as cheese, skimmed milk powder and butter), competition in infant nutrition in Hong Kong and China and some incidental charges.
FrieslandCampina, for example, suffered a loss of €100 million on basic dairy, mainly due to the lower prices compared to the guaranteed price. "We suffered a lot, especially in the first half of the year, but in the second half of 2018 we found our way up again," said Hein Schumacher, CEO of FrieslandCampina, in the explanation of the annual figures.
Battle for infant nutrition
In Asia, the dairy cooperative has been competing in the baby food market for some time, investing in innovation, marketing, sales and distribution. "We are currently number 1 in Hong Kong and number 4 in China. In addition, we are facing a shrinking market in China, which means we have to fight harder for our market share. That also means we have to do more investingSchumacher says.
In addition, additional costs for the restructuring of the company and various non-recurring charges for announced closures of production sites (eg in Germany, the Middle East and Belgium) of approximately €50 million. FrieslandCampina's turnover ultimately fell by 4% to €11,6 billion. According to the group, this is due to the currency effects and cars for sale of soft drink producer Riedel, which took a strong bite out of the turnover.
Drop in milk price
The milk price for member dairy farmers in 2018 is €37,43 per 100 kilos of milk, which is a decrease of almost 6,45% compared to 2017. This includes the guaranteed price, presentation allowance, issuance of member bonds and other allowances. . The guaranteed price was €36,05 per 100 kilos, 5% lower than 1 year earlier. This decrease is mainly caused by the lower milk prices of the reference companies.
Value creation (the performance premium and issuance of member bonds) amounted to €0,59 per 100 kilos, compared to €2017 in 1,33. The decrease is due to the lower result. "It is important to say that last year we paid out a total amount of €3,9 billion to all member dairy farms," said Schumacher. "This is the third highest result in FrieslandCampina's history."
Eric the Thrush
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