Revenues rose to €5,524 million while profit rose to €164 million euro. The company said that higher sales prices and the sale of more products with added-value contributed towards the revenue increase and improved result. The Consumer Products International and Ingredients business groups once again improved their revenue and results with the most robust growth being achieved by infant and toddler nutrition in both the consumer and business to business markets. The Cheese, Butter & Milkpowder business group achieved a positive result thanks to higher sales prices. The Consumer Products Europe business group’s revenue and result lagged behind due to reduced consumer spending in Europe. The company’s performance in respect of its member dairy farmers rose by 28.7% to €3.05.
“FrieslandCampina achieved a good result in the first six months of 2013,” said Cees ’t Hart, CEO Royal FrieslandCampina. “We are strategically on course. Nevertheless, FrieslandCampina must also find an appropriate way to deal with the consequences of lagging consumer spending in Europe.”
In the first half of 2013 the Consumer Products Europe business group was confronted with a further worsening of market conditions in Europe. Consumer spending dropped further due to the sombre economic outlook, rising debt levels and increasing unemployment. Consumer Products Europe’s net revenue from third parties was €1,484 million. Volume fell as sales of both branded and supermarkets’ private label dairy products declined.
Volumes were most under pressure in Hungary, Romania, Germany and the Netherlands. The higher guaranteed price for raw milk could be passed-on, albeit with some delay due to existing contracts. The market share of most brands was under pressure. Operating profit fell to €48 million despite fixed costs being lower due to earlier reorganisations, cost management and reduced spending on advertising and promotion campaigns. Ways to adjust the organisation to difficult market conditions are being studied, said the company.
The Consumer Products International business group’s revenue from third parties in the first half of 2013 rose by 17.1% to €1,606 million. Sales of both infant and toddler nutrition and dairy-based beverages (especially condensed milk) showed good growth. In a number of countries the higher raw milk and raw materials costs could not be passed on in the sales price due to local government restrictions. In most countries the market share was better than in 2012, in part thanks to increased investments in advertising and promotion campaigns. The integration of Alaska Milk Corporation, which was acquired in 2012, proceeded smoothly.
During the first half of 2013 the Cheese, Butter & Milkpowder business group’s revenue from third parties rose by 12.2% to €1,380 million. Although the sales volume was comparable to the first half of 2012, revenue rose as a result of price increases throughout the business group. Operating profit rose by €51 million to €19 million due to improved market conditions. Operating profit as a percentage of revenue amounted to 1.4% (first half of 2012: -2.6%). During the first half of 2013 the European Commission approved FrieslandCampina’s acquisition of cheese specialist Zijerveld and its packaging unit Den Hollander Food.
The Ingredients business group once again performed well with net revenue from third parties amounting to €905 million – a 6.8% increase compared with the first half of 2012. The increase in revenue was due to higher demand for high-quality ingredients for infant and toddler nutrition and the passing on of price increases. The volume of added-value products rose and, as a result, fewer commodities were produced. Operating profit rose by 17.6% to €140 million.
Friesland Campina anticipates that in 2013 the global offering of milk will increase only slightly and will not exceed the 2012 volume until the end of the year. The global consumption of dairy products is stable to slightly higher in the emerging markets. In Europe the consumption of dairy products is under pressure. Small fluctuations in supply and demand on the world market have major consequences for the price development of dairy products. FrieslandCampina said that it cannot make any concrete statement regarding the expected result for the whole of 2013.
“FrieslandCampina achieved a good result in the first six months of 2013,” said Cees ’t Hart, CEO Royal FrieslandCampina. “We are strategically on course. Nevertheless, FrieslandCampina must also find an appropriate way to deal with the consequences of lagging consumer spending in Europe.”
In the first half of 2013 the Consumer Products Europe business group was confronted with a further worsening of market conditions in Europe. Consumer spending dropped further due to the sombre economic outlook, rising debt levels and increasing unemployment. Consumer Products Europe’s net revenue from third parties was €1,484 million. Volume fell as sales of both branded and supermarkets’ private label dairy products declined.
Volumes were most under pressure in Hungary, Romania, Germany and the Netherlands. The higher guaranteed price for raw milk could be passed-on, albeit with some delay due to existing contracts. The market share of most brands was under pressure. Operating profit fell to €48 million despite fixed costs being lower due to earlier reorganisations, cost management and reduced spending on advertising and promotion campaigns. Ways to adjust the organisation to difficult market conditions are being studied, said the company.
The Consumer Products International business group’s revenue from third parties in the first half of 2013 rose by 17.1% to €1,606 million. Sales of both infant and toddler nutrition and dairy-based beverages (especially condensed milk) showed good growth. In a number of countries the higher raw milk and raw materials costs could not be passed on in the sales price due to local government restrictions. In most countries the market share was better than in 2012, in part thanks to increased investments in advertising and promotion campaigns. The integration of Alaska Milk Corporation, which was acquired in 2012, proceeded smoothly.
During the first half of 2013 the Cheese, Butter & Milkpowder business group’s revenue from third parties rose by 12.2% to €1,380 million. Although the sales volume was comparable to the first half of 2012, revenue rose as a result of price increases throughout the business group. Operating profit rose by €51 million to €19 million due to improved market conditions. Operating profit as a percentage of revenue amounted to 1.4% (first half of 2012: -2.6%). During the first half of 2013 the European Commission approved FrieslandCampina’s acquisition of cheese specialist Zijerveld and its packaging unit Den Hollander Food.
The Ingredients business group once again performed well with net revenue from third parties amounting to €905 million – a 6.8% increase compared with the first half of 2012. The increase in revenue was due to higher demand for high-quality ingredients for infant and toddler nutrition and the passing on of price increases. The volume of added-value products rose and, as a result, fewer commodities were produced. Operating profit rose by 17.6% to €140 million.
Friesland Campina anticipates that in 2013 the global offering of milk will increase only slightly and will not exceed the 2012 volume until the end of the year. The global consumption of dairy products is stable to slightly higher in the emerging markets. In Europe the consumption of dairy products is under pressure. Small fluctuations in supply and demand on the world market have major consequences for the price development of dairy products. FrieslandCampina said that it cannot make any concrete statement regarding the expected result for the whole of 2013.
