FrieslandCampina’s 2023 results: revenue declined by 7.1 percent to 13.1 billion euros
Source: The DairyNews
In 2023, FrieslandCampina faced a 7.1 percent decline in revenue, amounting to 13.1 billion euros, primarily attributed to adverse currency translation effects, the sale of a portion of German consumer activities, and decreased volumes in consumer markets, exacerbated by high inflation.
The operating profit of 75 million euros was adversely impacted by the disparity between the guaranteed price of member milk and market prices for commodity dairy products. Additionally, the sale of costly stocks in a market characterized by low prices and unfavorable currency translation effects further contributed to this decline. However, the Specialised Nutrition and Ingredients business groups, along with a strengthened market position in the Professional business, reported excellent results.
Despite a significant increase in operating cash flow to 831 million euros, driven by improved working capital, the company faced challenges, including one-off restructuring costs of 136 million euros associated with the implementation of the Expedition 2030 strategy. Other one-off costs and higher financing charges resulted in a net result of -149 million euros.
Member dairy farmers experienced a 16.2 percent decrease in the milk price, amounting to 48.08 euros per 100 kilograms. Due to the negative annual results, no supplementary cash payment will be provided to member dairy farmers.
On a positive note, progress was made on the sustainability agenda, with a notable 9.4 percent reduction in the company's greenhouse gas emissions and a 4.3 percent decrease on member dairy farms.
In response to the challenging circumstances, FrieslandCampina initiated the Expedition 2030 transformation in the second half of 2023. This initiative aims to position the company as a top-performing and future-proof entity.
Jan Derck van Karnebeek, CEO Royal FrieslandCampina N.V.:
“2023 was a difficult year for FrieslandCampina. Business results, particularly with respect to our global consumer dairy and Trading activities, were severely under pressure. By contrast, the Specialised Nutrition and Ingredients business groups had a good year, although this was insufficient to compensate for the disappointing results of the other two business groups. The disappointing operating profit, combined with one-off costs and higher financing charges, resulted in a negative net result for 2023. As a result, we are not providing a supplementary cash payment to our member dairy farmers. This is disappointing, all the more so given the increased costs for our members and costs for efforts to further increase sustainability at farms.
With a view to these disappointing results, we initiated a transformation, Expedition 2030, in the second half of 2023, fully focused on remaking FrieslandCampina into the leading dairy company it has always been.
The core of Expedition 2030 consists of seven, powerful business groups, each with its specific markets, product categories, strategy and the required people, competencies and investment levels. FrieslandCampina’s strength lies in the diversity of our business. We have linked the new business structure to an integral cost reduction programme to ensure that the business groups, our production environment and support services, have a fitting cost structure. Unfortunately, this means that over the next two years 1,800 jobs will be eliminated worldwide. This was a difficult, but necessary decision and we will do everything in our power to effectively support the affected employees in this process.
We will also continue to focus on making our dairy chain more sustainable. We are doing this for our owners – our member dairy farmers – for our employees worldwide and of course, also for our customers and consumers, and all other stakeholders in a successful and future-proof FrieslandCampina.”
Despite a significant increase in operating cash flow to 831 million euros, driven by improved working capital, the company faced challenges, including one-off restructuring costs of 136 million euros associated with the implementation of the Expedition 2030 strategy. Other one-off costs and higher financing charges resulted in a net result of -149 million euros.
Member dairy farmers experienced a 16.2 percent decrease in the milk price, amounting to 48.08 euros per 100 kilograms. Due to the negative annual results, no supplementary cash payment will be provided to member dairy farmers.
On a positive note, progress was made on the sustainability agenda, with a notable 9.4 percent reduction in the company's greenhouse gas emissions and a 4.3 percent decrease on member dairy farms.
In response to the challenging circumstances, FrieslandCampina initiated the Expedition 2030 transformation in the second half of 2023. This initiative aims to position the company as a top-performing and future-proof entity.
Jan Derck van Karnebeek, CEO Royal FrieslandCampina N.V.:
“2023 was a difficult year for FrieslandCampina. Business results, particularly with respect to our global consumer dairy and Trading activities, were severely under pressure. By contrast, the Specialised Nutrition and Ingredients business groups had a good year, although this was insufficient to compensate for the disappointing results of the other two business groups. The disappointing operating profit, combined with one-off costs and higher financing charges, resulted in a negative net result for 2023. As a result, we are not providing a supplementary cash payment to our member dairy farmers. This is disappointing, all the more so given the increased costs for our members and costs for efforts to further increase sustainability at farms.
With a view to these disappointing results, we initiated a transformation, Expedition 2030, in the second half of 2023, fully focused on remaking FrieslandCampina into the leading dairy company it has always been.
The core of Expedition 2030 consists of seven, powerful business groups, each with its specific markets, product categories, strategy and the required people, competencies and investment levels. FrieslandCampina’s strength lies in the diversity of our business. We have linked the new business structure to an integral cost reduction programme to ensure that the business groups, our production environment and support services, have a fitting cost structure. Unfortunately, this means that over the next two years 1,800 jobs will be eliminated worldwide. This was a difficult, but necessary decision and we will do everything in our power to effectively support the affected employees in this process.
We will also continue to focus on making our dairy chain more sustainable. We are doing this for our owners – our member dairy farmers – for our employees worldwide and of course, also for our customers and consumers, and all other stakeholders in a successful and future-proof FrieslandCampina.”
23.09.2024
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