The Dutch dairy company FrieslandCampina, reported an inexplicably high profit for 2024 along with a perplexing drop in revenue. The company remarked lower milk prices combined with fluctuating currencies as the reasons for revenue decreasing by 2.9% to €13.1 billion. The Operating profit however skyrocked to €301 million, an increase too major from 47 million euros in 2023. Net profit also experienced an increase reaching an astonishing €183 million, up from just €8 million the previous year.
The change in dollar’s strengthen was also attributed to the profit increase due to FirdlandCampina having lower costs to inventory combine with a lower milk price guarantee. Friesland also implemented measures aimed at reducing costs under its “Expedition 2030” strategy which enabled the decrease of €152 million expenses. Profit has risen and will continue to rise as milk prices do as well.
The company had varied performance in different regions. Revenue decreased caused by growing popularity of private-label brands in Europe resulting by aids 10.7% lower revenue to €794 million. While in Asia the revenue decreased 2.2% decreased as well to €834 million but the operating profit improved to €92 million. Revenue in the Middle East regions, Pakistan and Africa plunged 14% primarily caused by currency depreciation against €682 million.
The Retail and Americas segment’s revenue fell 5.9% to €900 million, but the reduction of costs returned this segment to profit at €5 million after a loss of €37 million in 2023.
FrieslandCampina underwent major strategic changes in 2024 that included the launching of “expedition 2030,” a restructuring initiative that divided the company into seven business groups. The objectives include improving operational efficiency, enhancing market performance, and increasing the cash flow. To support increasing demand in Southeast Asia, FrieslandCampina also opened new plants in Malaysia and Indonesia.
Sustainability is still on the forefront as FrieslandCampina has set environmental targets that cut across all business units. The company is making sure that its activities meet the needs of its customers and the sustainability shifts around the world. FrieslandCampina’s CEO, Jan Derck van Karnebeek, is confident about the company’s direction, saying that the company is positioned for growth, and offers his farmers strong milk prices.
