Background FrieslandCampina
FrieslandCampina: positive result is not yet convincing
FrieslandCampina performed so well last year that there is again a supplementary payment for the members. Sales have increased and profits have more than doubled. CEO Hein Schumacher says he is satisfied with the result achieved. Still, it doesn't look very convincing. The member dairy farmers did receive almost 10% more milk money.
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If you look under the hood of dairy cooperative FrieslandCampina and look at the results per business group, you will see a slightly more nuanced picture than the one outlined above. In the official presentation of the dairy, it was stated that three of the four divisions recorded a higher turnover last year, but only one division achieved a (much) higher operating result.
The business group'trading', partly is that the old group cheese, butter and milk powders, emerged as the gem. Expressed in numbers, the results look very different. Trading made a lot of progress (under the influence of the higher prices for bulk raw materials), but in the meantime also continued to report losses, according to the annual report .
'Get better earnings'
FrieslandCampina hopes to achieve better results this year, partly by better passing on the higher purchase prices to customers. The dairy cooperative also hopes to benefit from the initiated reduction in the workforce. Schumacher also indicated that FrieslandCampina has good hopes of achieving better earnings again, especially in the infant nutrition segment.
According to the CEO, the market has also picked up again in recent months, in both China and countries in Southeast Asia. Schumacher did not answer questions about a possible sale of Friso and possible other infant nutrition activities. In a number of other markets, such as Pakistan, things are slowly moving in the right direction. In Nigeria, there are still problems with earning money. Two years ago there was about €180 million waiting for an opportunity to be booked, last year it was €170 million.
To maintain a certain critical mass, FrieslandCampina believes it is important to keep the milk supply of the member dairy farmers around 10 billion kilos per year. That did not work last year and 'due to the stopping of members and poor roughage quality', more than 300 million kilos less milk was collected than in 2020. The departure of several hundred members was not mentioned. FrieslandCampina lost 536 member companies last year due to the departure and the closure of the business. The total number of member dairy farmers decreased by almost 1.300.
Concern about government policy
Only after further questioning did Schumacher also mention government policy as the reason for the lagging milk supply, something Arla CEO Peter Tuborgh emphatically did two weeks earlier. FrieslandCampina's annual report explicitly mentions concerns about the increasingly unpredictable milk supply as a risk factor and point of concern. Schumacher indicated that FrieslandCampina is looking for opportunities to maintain the milk supply in the coming years.
FrieslandCampina's member dairy farmers received an almost 10% higher cash milk price last year, despite all the challenges. This was mainly possible thanks to the considerably higher warranty price. The supplementary payment hardly contributed.
The considerably higher milk price did not help much to get higher in the ranking of best payers. Two years ago, FrieslandCampina had to tolerate three companies with an average higher milk price, and this was also the case last year. In particular, Cono Kaasmakers and Vreugdenhil Dairy Foods have left FrieslandCampina further behind in terms of total milk price.