News Half-year figures
Significant drop in profit for FrieslandCampina
FrieslandCampina achieved less turnover in the first half year than last year. Profits have even fallen by 43%. According to the dairy group, this is due to the disappointing results in the infant nutrition segment.
FrieslandCampina achieved a total of €2021 billion in turnover in the first six months of 5,5. This is a decrease of 1,8% compared to the same period last year. Profit fell much more sharply, by 42,6% to €62 million. This decrease is mainly due to a €57 million reserve for a Thailand judgment and disappointing results from infant nutrition due to ongoing difficult market conditions in Asia. Operating cash flow decreased to €46 million, mainly due to lower results and a committed one-off contribution of €2005 million in 88 to a pension plan.
CEO Hein Schumacher during a press conference this morning (July 21): "This is a challenging start and not one you wish for after a difficult year in 2020. The reservation for the judgment in Thailand is a disadvantage, we are also going against that. profession and we are working hard on that, but it is not a reflection of how the company actually stands."
Poison cup on children's food market
Sales of Specialized Nutrition and Ingredients were under pressure due to the difficult infant nutrition market. Sales of Friso Gold in China and Hong Kong in particular fell, Hong Kong still made a significant profit last year, but there was no profit this year. "We know that infant nutrition in Asia has normalized since its peak in 2014-2015, but it has now declined at a very rapid pace. The infant nutrition market has had to empty the poison cup for a while. It was a good source of profit for the company at the time, but we now have to do without that source of profit, which is difficult, but we just have to work hard to make up for that," added Schumacher.
Structurally lower costs
The implementation of the transformation of the company with a focus on growth, structurally lower costs and optimization of the organizational structure is on screen. Compared to the end of June 2020, about 700 jobs have already been lost this year, the target by the end of 2021 is a reduction of 1.000 jobs. From 2022, structurally lower costs are expected and FrieslandCampina assumes a decrease of at least €100 million per year.
Higher milk price
FrieslandCampina's average milk price increased by 1,8% in the first half of the year to €37,25 per 100 kilos. This increase comes from an increase in basic dairy prices as a result of increased market demand in combination with a lower milk supply. The milk supply from member dairy farmers fell by 2,2% in the first half of the year to 5,029 million kilos. This is due to cold weather conditions in combination with higher feed costs. Due to the lack of results, no interim payment will be made in the first half of the year. Last year there was an interim payment of €0,22 excluding VAT per 100 kilos.
cautious optimism
FrieslandCampina is cautiously optimistic about the recovery of consumer and out-of-home channels for the second half of the year. However, a recovery of the Asian infant nutrition market is not expected. There is also a lot of uncertainty surrounding the corona crisis.
"We are positive about out-of-home developments, especially in the third quarter. Commodity prices on dairy are actually holding up quite well, we have seen slightly lower prices in recent weeks, but we think prices will remain at a reasonably good level. we also see stability for the guaranteed price," said Schumacher.
Chanti Oussoren
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