News Dairy
FrieslandCampina is having a hard time in the market
FrieslandCampina is struggling with persistently difficult market conditions as a result of high inflation and sharply reduced prices for basic dairy products. The brand new CEO Jan Derck van Karnebeek and CFO Hans Janssen stated this on Wednesday at the cooperative's members' council meeting.
At the end of February, the top of FrieslandCampina – with the then CEO Hein Schumacher still in charge – already sounded the alarm and circumstances have not improved in the meantime. The sharp drop in basic dairy prices at the end of last year has continued into the first half of 2023, according to the current management. FrieslandCampina will officially present its half-yearly figures on 20 July, but today's reports already give a warning in advance.
Sales volumes under pressure
Due to the high inflation, the dairy company's sales figures are under pressure. This is not only happening in the home markets, but worldwide. High energy and raw material prices, rising wage costs, unfavorable exchange rate effects and interest rate rises are also driving margins down. FrieslandCampina also makes it clear that the guaranteed price - which is declining - has not been in line with the value of milk in recent months, but is relatively high.
In the second half of 2023 FrieslandCampina expects a better balance between the milk money and the benefits in the market. As a result, it will probably no longer be necessary to write off stocks, which had to be done in the first half of the financial year. Nevertheless, FrieslandCampina is not positive about the prospects. Due to the persistently high inflation and associated purchasing power restrictions, sales volumes will probably remain under pressure. This takes into account unfavorable exchange rates and rising interest rates.
Little bright spots
The newly appointed CEO Jan Derck van Karnebeek is currently still in its training phase, but can already roll up its sleeves given the turbulent market conditions. Yet there are also bright spots for the CEO. The Specialized Nutrition and Ingredients divisions had a good start to the year. On balance, however, FrieslandCampina speaks of a significant negative impact on the financial results in the first half of this year. And Van Karnebeek does not sit completely still. With the announcement of a simplified top structure and the discontinuation of the Food & Beverage business group, he anticipates further announcements in October. With the closure of the business group, the boss of this division, Roel van Neerbos, will also step down.
LTO North
The cooperative also announces that Trienke Elshof, director of LTO Noord, will join the cooperative board as of December. Elze Jellema is appointed for a new term. She and Sandra Berendsen are also appointed to the Supervisory Board for a new term. Newly appointed as external supervisory director is Petri Hofsté, who comes from the financial world. She succeeds the departing Angelien Kemna.
Wouter Job
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