Royal FrieslandCampina (RFC) H1 2024 earnings summary

Executive summary

• Operating profit surged to €301 million from €47 million year-over-year, driven by improved volume mix, lower inventory costs, and cost savings from the Expedition 2030 strategy.

• Net result rose to €183 million from €8 million in the first half of 2023, despite a 6.7% revenue decline to €6.4 billion, mainly due to lower milk prices and currency effects.

• Healthy operating cash flow of €397 million, up from €90 million year-over-year, with significant cost savings and reduced FTEs by 1,146.

• No interim supplementary cash payment to member dairy farmers due to global dairy market volatility and economic uncertainties.

Financial highlights

• Revenue: €6,433 million, down 6.7% year-over-year; decline before currency effects was 2.9%.

• Operating profit: €301 million, up from €47 million; net result: €183 million, up from €8 million.

• Operating margin improved to 4.7% from 0.7% year-over-year.

• Operating cash flow: €397 million, up from €90 million.

• Pro forma milk price decreased by 3.1% to €50.09 per 100 kg, with higher sustainability premiums partly offsetting lower guaranteed price.

Outlook and guidance

• Continued economic uncertainties and volatile commodity dairy prices expected in H2 2024.

• Inflation anticipated to rise; increased marketing efforts and ongoing production optimisation planned.

• No results forecast issued for the second half of 2024 due to market uncertainties.