Strong financial results in 2024 for Friesland­Campina

• Operating profit, after deduction of the supplementary cash payment, increased to 527 million euros, compared to 75 million euros in 2023.
• Net result increased to 321 million euros, compared to a loss of 149 million euros in 2023.
• Revenue decreased by 1.1 percent to 12.9 billion euros as a result of unfavourable currency translation effects. Revenues increased by 1.3 percent on a constant currency basis.
• Positive operating cash flow of 900 million euros, compared to 831 million euros in 2023.
• Cost savings of 315 million euros, of which 222 million in the supply chain organisation; partially used to offset inflation.
• Total compensation for member dairy farmers increased by 5.5 percent to 4.8 billion euros. Average milk price of 52.95 euros per 100 kilograms of milk, including a supplementary cash payment of 1.21 euros.
• The supply of member milk decreased by 3.4 percent to 9.1 billion kilograms, primarily due to unfavourable weather conditions and dairy farmers shutting down their farms.
• Greenhouse gas emissions at member dairy farms decreased by 853 kt CO2-eq, a reduction of 9.8 percent in comparison to 2023.
• FLAG and non-FLAG 2030 targets were validated by the Science Based Targets initiative (SBTi) to be in line with the 1.5°C scenario of the Paris Climate Agreement.
• Commissioning of large, new production facilities in Malaysia and Indonesia to absorb future growth, also further optimisation of global supply chain network.
• Announced proposed merger with Milcobel, a key strategic step for both cooperatives.

Jan Derck van Karnebeek, CEO Royal FrieslandCampina N.V.:

‘2024 was a year of transformation for FrieslandCampina, characterised by the implementation of Expedition 2030 and a new organisation model with seven business groups, supported by a global supply chain organisation and efficient support services.

With a strong operating profit growth, FrieslandCampina took a tremendous step forward in 2024, mainly due to the improved performance of our business groups, cost reductions by the supply chain organisation and support departments, and favourable market developments, such as higher commodity dairy prices. However, what I am particularly proud of is the commitment and teamwork of our employees. Thanks to their dedication we are able to extra reward our member dairy farmers with a supplementary cash payment of 1.21 euros per 100 kilograms of milk – a result that reflects all the hard work of everyone.

A healthy cash flow furthermore enabled us to invest in the future of our production facilities and take further steps in FrieslandCampina’s sustainability journey. Good income is crucial for our members to enable them to make their dairy farms future-proof and more sustainable. In 2024, we distributed a record 245 million euros in sustainability premiums to our members.

Additionally, we have succeeded in recruiting new cooperative members. In the current milk market this is important for the future of our cooperative and company. The proposed merger between FrieslandCampina and Milcobel, which is expected to be completed by the end of 2025, perfectly fits into this strategic backdrop.

I am grateful for what we have accomplished together this past year. The results for 2024 prove that we are on the right path, and in 2025 and beyond we will continue to work hard on a future-proof and successful FrieslandCampina for members, employees, and all other stakeholders of this great cooperative.’

Revenue dropped slightly due to unfavourable currency translation effects

FrieslandCampina’s revenue in 2024 decreased by 1.1 percent to 12.9 billion euros compared to 13.1 billion euros in 2023, due to currency translation effects. On a constant currency basis revenue increased by 1.3 percent to 13.2 billion euros.

Operating profit and net result increased significantly

FrieslandCampina’s operating profit improved significantly from 75 million euros in 2023 to 527 million euros in 2024, after deduction of the supplementary cash payment. This strong growth is the result of an improved volume mix, the growth of consumer brands in Southeast Asia and Friso infant nutrition in China, the elimination of the cost impact of expensive stocks, and higher commodity dairy prices, combined with a positive difference between these commodity dairy prices and the guaranteed price for regular raw milk. In 2024, the number of FTEs was reduced by almost 1,400 compared to 2023. FrieslandCampina achieved cost savings of 315 million euros through Expedition 2030 and Performance+, a programme that has driven significant process improvements and cost savings in the supply chain. The supply chain realised savings of 222 million euros. Part of the savings were used to offset inflation effects. In 2024, FrieslandCampina achieved a net result of 321 million euros, compared to a loss of 149 million euros in 2023.

Development business groups

The business groups Specialised Nutrition and Asia achieved excellent operating profits in 2024, driven respectively by Friso infant nutrition in China and consumer products in Southeast Asia. The business groups Retail & Americas and Professional & Trading recovered after a challenging 2023. Retail & Americas implemented a new strategy, which is delivering the first positive results. Due to a strong second half of the year, Ingredients improved its operating profit. The operating result of business group Middle East, Pakistan & Africa was negatively impacted by currency translation effects in Nigeria and the implementation of value-added tax in Pakistan. Despite a lower operating profit, business group Europe performed as planned in challenging market conditions with stable volumes. The latter two business groups reinforced the market positions of their strategic brands through a targeted marketing approach.

Positive operating cash flow

In 2024, net cash flow from operating activities increased to 900 million euros from 831 million euros in 2023. This increase was primarily due to the improved operating profit and better working capital management. As at 31 December 2024, the net debt was 270 million euros, a decrease of 365 million euros compared to 31 December 2023.

Good progress on Nutrition, People and Planet with sustainability strategy

In 2024, FrieslandCampina combined all sustainability activities under a single overarching sustainability strategy structured around three pillars: Nutrition, People and Planet.

With respect to Nutrition, 76 percent (2023: 75 percent) of consumer products sold complied with the FrieslandCampina Global Nutritional Standards and the company improved its position on the leading ATNI Global Index, moving up from third to second place, thereby emphasising the company’s strong focus on health and nutritional values. Under the pillar People, FrieslandCampina supported 63,126 local dairy farmers in dairy development countries with training designed to improve their milk production and increase its sustainability. The share of women in senior management positions remained unchanged compared to 2023 (29 percent).

With respect to the Planet pillar, the implementation of the Climate Plan 2030 is on track: Greenhouse gas emissions at member dairy farms decreased by 853 kt CO₂-eq, a reduction of 9.8 percent in comparison to 2023. FrieslandCampina entered into new partnerships with large international customers, such as Mars and Danone, to support and financially compensate dairy farmers for the accelerated reduction of greenhouse gas emissions. Agreements have also been made with multiple suppliers to reduce their greenhouse gas emissions. In addition, the FLAG (Forest, Land and Agriculture) and non-FLAG targets pertaining to FrieslandCampina’s 2030 climate ambitions were validated by the Science Based Targets initiative (SBTi). As such, the overall climate goal for 2030 meets the 1.5°C scenario of the Paris Climate Agreement. The share of recyclable packaging increased to 92 per cent in 2024 (2023: 91 per cent).

Less milk, higher remuneration for member dairy farmers

The total volume of supplied member milk decreased by 3.4 percent, from 9,369 million kilograms in 2023 to 9,050 million kilograms in 2024. This decrease is primarily due to a decrease in the number of member dairy farms, which declined from 9,417 to 9,001. This decline is partly the result of dairy farmers who have ceased operations, for example due to a lack of succession, and the outflow of members through the DMF scheme, which ended in 2023, with the last dairy farmers having left by 1 January 2024. A positive development is that the influx of new members increased again in 2024.

Despite the decrease in the total volume of supplied member milk, the total compensation paid to member dairy farmers for their supplied milk increased by 5.5 percent from 4,521 million euros in 2023 to 4,769 million euros in 2024. This is due to a higher guaranteed price, a higher Foqus planet premium and the supplementary cash payment.

Higher milk price

FrieslandCampina aims to pay a leading milk price to its member dairy farmers. In 2024, the milk price increased by 10.1 percent, from 48.08 euros in 2023 to 52.95 euros per 100 kilograms of milk. This was made possible by a higher guaranteed price of 49.48 euros (2023: 46.26 euros), a higher Foqus planet premium of 1.65 euros (2023: 1.21 euros) and a supplementary cash payment of 1.21 euros (2023: 0.00 euros). The increase in the guaranteed price was the result of higher milk prices from the reference companies.

Supplementary cash payment for member dairy farmers

The 2023-2025 reserve policy states that 60 percent of the net profit will be added to the retained earnings, while 40 percent can be distributed as a supplementary cash payment to member dairy farmers. Due to the higher result in 2024, 1.82 euros (2023: -3.22 euros) per 100 kilograms of milk was added to the retained earnings, and member dairy farmers will receive a supplementary cash payment of 1.21 euros (2023: 0,00 euros) per 100 kilograms of milk.

Outlook

FrieslandCampina expects inflation to persist in 2025. Driven by the Expedition 2030 and Performance+ programmes, additional cost reductions of between 100 to 150 million euros are expected in 2025, which will be used to offset inflation, facilitate growth, and support the company’s profitability. FrieslandCampina expects the higher commodity dairy prices compared to the guaranteed price, and the positive effect of stocks that in 2024 contributed to a better result will not reoccur in 2025. Investments will be somewhat lower in 2025, due to the completion of large projects in 2024. Finally, FrieslandCampina aims to complete the proposed merger with Milcobel prior to year-end 2025, following approval by shareholders, the Members’ Council and competition authorities.