For the first half year 2021, FrieslandCampina report revenue slightly down (-1.8 percent) to 5.5 billion euros, before currency translation effects revenue up 0.8 percent driven by recovery in consumer and out-of-home channels. Profit decreased by 42.6 percent to 62 million euros, mainly due to a 57 million euros provision for a court ruling in Thailand and lower infant nutrition results in the business groups Specialised Nutrition and Ingredients as a result of continuing difficult market conditions in Asia.
Underlying operating profit, excluding provision for a court ruling in Thailand and currency translation effects, decreased by 8.6 percent to 202 million euros. Operating cash flow decreased to 46 million euros mainly due to lower results and a one-off contribution of 88 million euros to a pension plan that was committed to in 2005.
The milk price by 1.8 percent to 37.25 euros per 100 kilos of milk compared to the first half of 2020 due to higher basic dairy prices caused by increased demand on the world market. Due to the lagging result in the first half of 2021 there will be no supplementary cash payment for the first half of 2021.
Milk supply decreased by 2.2 percent to 5,029 million kilos due to relatively cold weather in the first months of 2021 and high animal feed prices.
The accelerated implementation of Our Purpose, Our Plan 2.0 strategy, with associated structural cost reductions of at least 100 million euros per year starting in 2022, is on track.
Outlook
For the second half of 2021, FrieslandCampina expects a continuation of the situation in the second quarter. On the one hand, FrieslandCampina is cautiously optimistic about the recovery of the consumer and out-of-home channels that has set in; on the other hand, the Asian infant nutrition market is not expected to recover. Moreover, the development of the corona pandemic and its impact on the company remains uncertain. FrieslandCampina expects basic dairy prices to continue to hover around current levels in the second half of 2021 and, as a result, milk prices are expected to do the same.
