Reported Jan Derck van Karnebeek, CEO, Royal FrieslandCampina N.V.: “In the first half of 2024, we have worked hard on improving our results on the basis of the Expedition 2030 strategy that we launched at the end of 2023. Starting this year, FrieslandCampina is focusing on specific product/market combinations with its seven business groups. Collectively, these business groups have the task of optimally valorising the milk of our member dairy farmers. The business groups are hereby supported by a single supply chain organisation, efficient support departments and a smaller head office. The goal we have set for ourselves is to improve our performance on the basis of the three dimensions of our performance triangle: ‘winning in the market, expanding our margin and generating cash’. We have achieved good progress on all of these dimensions.
“We are seeing that the changes that we have implemented since the end of 2023 have led to a strong start in 2024. In the first half of the year, our operating profit significantly increased due to improvements in the volume mix, positive developments of our consumer brands in Southeast Asia and of our Friso infant nutrition brand in China, as well as the elimination of the impact of expensive inventories, and lower costs. This is good news for our member dairy farmers and employees. Additionally, large new production facilities were opened in Malaysia and Indonesia to meet future market demand in the region.
“Due to uncertainty about the future milk supply in the Netherlands, as well as beyond, it is very important for us to maintain scale in our milk volume. This is why the cooperative, in close collaboration with the company, initiated an integrated programme to make the cooperative even more attractive to current and new members.
“FrieslandCampina produces dairy products in balance with people and planet. Moreover, this is also what our customers and society expect from us. With a view to this, we fully integrated our sustainability strategy into the strategies of our seven business groups, support functions and the cooperative in the first half of 2024. This strengthens our focus on sustainability and ensures that all business groups and our members contribute to our collective sustainability objectives.
“I would like to conclude by thanking our employees for all their hard work over the past months. In addition, I would also like to thank the members of our cooperative and the Cooperative Board for their confidence in the collective strategy, focused on paying our members a leading milk price.”
Revenue decreased, profit and margin improved despite a solid performance of value-added products, revenue decreased by 6.7 percent to 6.4 billion euros. This decrease in revenue was primarily due to the lower milk price and currency translation effects. Before currency translation effects, the decline was 2.9 percent.
Thanks to improvements in the volume mix, the elimination of the impact of expensive inventories and a considerably smaller difference between commodity dairy prices and the guaranteed price, as well as cost savings in the context of Expedition 2030, profit and margin improved in the first half of 2024.
The operating profit improved to 301 million euros compared to 47 million euros in the first half of 2023. The increased investments in advertising and promotion were partly offset by cost savings. Higher costs resulting from Collective Labour Agreements were offset by lower staff numbers. Over the course of the first half of the year, the number of jobs (FTEs) decreased by 1,146. For more visit frieslandcampina.com
