The Half-Year Results for 2018; basic dairy products and price competition in infant nutrition putting pressure on profit.

  • Revenue declined by 0.8 percent excluding currency effects and disposals
  • Operating profit under pressure due to low prices for basic dairy products in comparison to the guaranteed price paid for members’ milk
  • Price competition in infant nutrition in Asia putting pressure on volume and margins
  • Negative trend in added value volumes underlines the importance of the transformation process currently underway
  • Transformation and restructuring costs in the first half-year amount to approximately 30 million euros
  • Operating cash flow increased from 29 million euros to 186 million euros, primarily due to working capital improvements
  • Milk price dropped to 36.74 euros per 100 kilos of milk (-4.2 percent)
  • Milk supply dropped to 5,356 million kilos of milk (-1.5 percent)

Hein Schumacher, CEO Royal FrieslandCampina N.V.: “In the first quarter of 2018, similar to the last quarter of 2017, FrieslandCampina faced low prices for basic dairy products, which insufficiently compensated the guaranteed price of milk paid by the Company to member dairy farmers. This puts pressure on the Company’s results. There was a recovery in the second quarter. Strong price competition for infant nutrition in Asia is challenging us to fight for our market position. This requires additional investments and a nimble organisation. In part for this reason, the organisation structure was adjusted effective on 1 January 2018 and an intensive transformation programme is underway. This enables us to operate faster in the market and to structurally lower costs.”