Emmi Geschäftsbericht 2010

Annual Report 2010

Net sales CHF 2,683.7 million

EBITDA CHF 233.6 million

EBIT CHF 135.8 million

Net profit CHF 86.1 million

Total assets CHF 1,728.7 million

Shareholders’ equity incl. minority interests CHF 976.9 million

Headcount (full-time equivalents) 3,701

Emm

i A

nn

uA

l r

Epo

rt

20

10

EmmiHabsburgerstrasse 12CH-6002 LucerneTelephone +41 41 227 27 27Fax +41 41 227 27 37 [email protected]

Key figures 2010

Emmi can look back on a successful 2010 in which sales and

earnings targets were exceeded. The company generated net

sales of CHF 2,684 million, 27.3 % of which came from interna-

tional sales. Net profit was up 14.3 % to CHF 86.1 million in

2010, while earnings before interest and taxes (EBIT) rose by

24.5 % to CHF 135.8 million, resulting in an EBIT margin of 5.1 %

compared with 4.2 % in the previous year. This success is the

result of a robust corporate strategy applied consistently in

the year under review, one which Emmi is looking to further

establish in the future.

2,335

2006

2,501

2007

2,671

2008

2,619

2009

Net sales

in CHF million

3,000

2,500

2,000

1,500

1,000

500

0

2,684

2010

109.0

4.2

EBIT

in CHF million

140

130

120

110

100

90

80

70

60

502006

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2007 2008 2009 2010

102.1

3.8

62.3

2.5

3.2

74.0

as % of net sales

135.8

5.1

54.0

41.3

58.7

75.3

2.3 1.6

2.2

2.9

Net profit

in CHF million as % of net sales

90

80

70

60

50

40

30

20

10

02006

3.5

3.0

2.5

2.0

1.5

1.0

0.5

2007 2008 2009 2010

86.1

3.2

Net sales by product group 2010

35.7 % Cheese

6.2 % Fresh cheese

3.2 % Powder/concentrates

6.7 % Other products and services

27.3 % Dairy products

20.9 % Fresh products

Amounts in CHF million 2010 2009 2008 2007 2006

Net sales 2,684 2,619 2,671 2,501 2,335

Earnings before interest, taxes, depreciation and amortization (EBITDA) 233.6 208.3 184.4 140.1 140.7

as % of net sales 8.7 8.0 6.8 5.6 6.0

Earnings before interest and taxes (EBIT) 135.8 109.0 102.1 62.3 74.0

as % of net sales 5.1 4.2 3.8 2.5 3.2

Net profit 86.1 75.3 58.7 41.3 54.0

as % of net sales 3.2 2.9 2.2 1.6 2.3

Investment in fixed assets (excl. acquisitions) 107.0 77.5 91.0 84.8 76.8

as % of net sales 4.0 3.0 3.4 3.4 3.3

Headcount (full-time equivalents) as at 31.12. 3,701 3,525 3,373 3,350 3,300

Net sales per employee CHF 000s 725 743 792 747 708

Volume of milk and cream processed in kg million 992 943 963 886 849

31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006

Total assets 1,729 1,655 1,683 1,635 1,531

of which shareholder’s equity incl. minority interests and convertible bonds 977 916 835 784 754

as % of total assets 56.5 55.3 49.6 47.9 49.3

Key figures Emmi GroupContinuing along the road to success

Editing Emmi Group Communications, Lucerne

Concept, Design and productionFarner Consulting AG, Zurich

photographyHarry Burst: page 2, 4, 18, 28, 46, 84Matthias Studer: page 7, 34, 41

translationCLS Communication AG, Basel

printingNeidhart + Schön Group, Zurich

The Emmi 2010 Annual Report is available in German and English.

© Emmi, Lucerne, March 2011

Emmi GroupAnnual Report 2010

The information within our annual report is originally published in German. Discrepancies or differences created in the translation are not binding and have no legal effect for compliance or enforcement purposes. If any ques-tions arise related to the accuracy of the information contained in the trans-lation, please refer to the German version of our annual report, which is the official and only binding version.

Every day, Emmi creates extraordinary taste sensations. Flavours, colours and fragrances inspire us. We make no compromises on

raw materials, as they are the basis for Emmi’s premium products. But even the freshest milk, the finest coffee and the tastiest

fruits can only come to the fore if they are processed with care, experience and knowledge. In this report, we introduce you to the

finest raw materials and explain how we make the best from the best.

Emmi is the largest Swiss milk processor and one of the most innova-

tive premium dairies in Europe. In Switzerland, Emmi focuses on the

development, production and marketing of a full range of dairy and

fresh products as well as the production, ageing and trade of primarily

Swiss cheeses. Outside Switzerland, Emmi concentrates on brand

concepts and specialities in European and North American markets.

The primary focus in fresh products is on lifestyle, convenience and

health products. In the cheese business, Emmi positions itself as

the leading company worldwide for Swiss cheese. Emmi’s customers

are primarily the retail trade, the food service sector and the food

industry.

Annual Report 2010

6 Editorial

8 The Year 2010 at Emmi

12 Group Report

20 Corporate Responsibility Report

Corporate Governance

31 Contents

32 Group structure and shareholders

32 Capital structure

33 Board of Directors

40 Group Management

43 Compensation, participations and loans

43 Shareholders’ rights of co-determination

44 Change of control and defensive measures

44 Auditors

45 Information policy

Financial Report 2010

49 Contents

50 Financial Situation

52 Consolidated Financial Statements of

the Emmi Group

74 Financial Statements of Emmi AG

83 Share Information

86 Locations

Contents

3contents

The world of coffee is extensive and the history of the prized beans stretches over many

centuries. Once the reserve of the wealthy, coffee has become an everyday beverage

for almost everyone in the western world. Coffee is cultivated on different continents

around the equator. Emmi sources the coffee for its popular Emmi Caffè Latte from

Guatemala, Nicaragua, India, Brazil and Indonesia. The different beans are then blended

to give the desired flavour and caffeine content.

Every bean is different

4 thebestfromthebest

Freshly roasted, freshly madeEmmi Caffè Latte’s success story began with a coffee machine in the research depart-

ment in Emmen. Extensive research was required to find the optimum mixture of milk

and coffee. Even now, only freshly brewed espresso is used. No coffee powder, no

flavourings, just pure coffee – up to 116 beans per cup. The coffee beans are first roasted

in the Rast gourmet roasting facility in Ebikon, before being ground at the Ostermundi-

gen production site. The freshly roasted coffee then goes into an oversized coffee

machine and is made into an expert espresso. Blended with fresh Swiss milk, Emmi

Caffè Latte is then exported to around 15 different countries.

5thebestfromthebest

Dear Shareholders

Emmi can look back on another successful year, having achieved

net sales of CHF 2,684 million, which corresponds to growth

of 2.5 %. Adjusted for acquisitions and currency effects, this

results in organic growth of 1.3 % at Group level, putting sales

above expectations despite the difficult currency situation.

Net profit was up 14.3 % to CHF 86.1 million, while the net

profit margin rose from 2.9 % to 3.2 % and net profit per share

increased to CHF 16.10 (prior year CHF 14.08). This improve-

ment in earnings is the result of consistent implementation

of our strategy and a successful presence in both the Swiss

market and our key international markets, as well as rigorous

cost management. An increase in dividend to CHF 3.40 per

share (previous year CHF 3.00) will be proposed to the Annual

General Meeting.

Emmi achieved its outstanding result against the backdrop

of a challenging economic environment and a strong Swiss

franc. Just like the personalities involved in our sponsorship

commitment as official partner to the FIS Ski World Cup, de-

spite the extremely hard conditions we stayed on course and

forged ahead, right up to the finish line. And for Emmi, like

for the skiers, there is no time to rest on our laurels, as the

next challenge is just around the corner. Market liberalization

will continue, and competitive pressure will go on increasing.

Again this year conditions will be less than ideal, and we will

tackle the hurdles as we come to them. We have everything in

place to do so, having worked hard throughout 2010 to lay the

groundwork.

Solid strategic pillars of successOur corporate strategy has shown itself to be robust, and we

have further reinforced the three pillars. We have defended

our leading market position in Switzerland, achieved stronger

than expected international growth and realized cost savings

as planned. We succeeded in cutting costs while milk prices

remained similar, thanks to efficiency improvements at all

levels of our organization. Cost-cutting measures of over

CHF 10 million were implemented, primarily in our large pro-

duction sites in Ostermundigen, Emmen, Suhr, Dagmersellen

and Langnau. Measures included integrating cheese specialist

Fromalp (acquired in April 2010) into the existing Emmi

organization and its employees into our production locations

in the Berne region. This process is largely complete and will

further strengthen our centre of competence for processed

cheese and fondue in Langnau im Emmental.

The optimized product portfolio helped to contribute to

organic growth, with investments being made in renowned

brands such as Emmi Caffè Latte and Kaltbach. Highlights

included the opening of the expanded cheese-ageing caves in

Kaltbach in the canton of Lucerne last autumn. Both brands

were supported by targeted marketing activities, and around

150 products were newly positioned under the Emmi um-

brella brand.

Successful acquisitionsFurther momentum has been provided by recent acquisitions.

We are delighted with our 2009 purchase of Emmi Roth USA,

with both the US retail trade and hotel and restaurant opera-

tors appreciating the wide range of speciality cheeses. We

have not only increased sales of locally produced cheese but

have also achieved double-digit growth in exports, above all

Gruyère. The purchase of a majority stake in the Geneva firm

Nutrifrais, also carried out in 2009, brought us sales growth in

the area of yoghurts and desserts in particular.

Further companies were added to the Emmi family in 2010.

Fromalp, with an export share of 40 %, brought us sales

growth both in Switzerland and in our key international mar-

kets from mid-year and helped us to achieve a double-digit

increase in fondue sales. The acquisition of global rights to the

Onken yoghurt brand will provide a boost to the UK and Ger-

many, two of our key markets, from 2011 onwards. Here again

we anticipate that, as with Emmi Roth USA, in addition to the

Onken yoghurts produced in Germany we will also succeed

in selling more milk products exported from Switzerland. The

“Swissness” aspect is highly valued in both countries, and per

capita consumption of milk products and cheese is well below

that of Switzerland, particularly in the UK, opening up consid-

erable potential for us.

“Our employees ultimately make the difference.”

KonradGraber

Success despite the strong Swiss franc

6 editorial

Industry solution for stable milk marketThe liberalization of markets is well advanced, and there is no

going back. Emmi is convinced that the Swiss dairy industry

can achieve long-term success with first-class products, and

we believe that this requires market-oriented milk production

as foreseen in the federal government’s agricultural policy.

Emmi therefore supports the federal government’s policy,

while also advocating an industry solution aimed at stabiliz-

ing the milk market via the Milk Sector Organization (BOM).

Well prepared for the futureWhere do we go from here? The strong franc will continue

to shape developments in 2011, and further price increases

in Emmi’s international markets will be unavoidable. Import

pressure will persist in Switzerland. In view of these circum-

stances, it is absolutely vital that Emmi continues to keep

costs under control, while also promoting high value-added

brand products, which are less price-sensitive. This way the

Swiss dairy industry will remain competitive, as consumers

will in future continue to be prepared to pay more for prod-

ucts made with Swiss milk. This will also benefit producers.

In addition to its first-class products, Emmi’s greatest success

factor are its employees, who ultimately make the differ-

ence. They are proactive and hardworking, develop their skills

and expertise constantly and are highly market-oriented. It is

thanks to them that we can maintain our position in a chal-

lenging environment, and we are grateful to each and every

one of them.

We would also like to thank our producers, customers, sup-

pliers, business partners and shareholders for the trust they

place in Emmi. This trust is both our obligation and our mo-

tivation to continue to invest in sustainable growth and help

achieve an efficient Swiss dairy industry. We are confident

that we will maintain our momentum throughout the coming

year and continue to successfully implement our strategy.

KonradGraber Ursriedener

Chairman of the Board of Directors CEO

KonradGraber,chairmanoftheboardofdirectors,andUrsriedener,ceo

“We have defended our leading market position in Switzerland, achieved stronger than expected international growth and realized cost savings as planned.” Ursriedener

87editorial

Innumerable small events shaped 2010 and we would like to a

take a look at some of them on the following pages. The examples

we have chosen show that Emmi’s success is both broad-based

and multifaceted. Inconspicuous on their own, together they

are particularly revealing. And while they are all very different in

nature, they do have one thing in common: they all represent

something special; all of them played a role in forging the solid

foundations on which Emmi is based, and they are testament

to the diversity of our company.

8 theYear2010atemmi

Looking back on an eventful 2010

January• Emmi celebrates a successful appearance at the Lauberhorn Races in Wengen in the Ber-nese Oberland as spon-sor of the FIS Alpine Ski World Cup, with a prominent presence on perimeter boards, bibs, on the slope and at the finish line.

• Roth Käse USA Ltd., acquired in 2009, begins a successful year in the key US market.

February• The winning “Shades of Milk” project by the Lucerne-based archi-tects Rüssli Architekten AG is to become the new Emmi headquar-ters in Lucerne, with apartments and com-mercial space also to be built on the site.

• Emmi publishes its sales figures for 2009, with its net sales of CHF 2,619 million exceeding expectations in the difficult environ-ment.

March• Fritz Wyss, Delegate of the Board of Directors from 1992 to 2003 and Chairman from 2003 to 2009, is named Honor-ary Chairman of Emmi.

• Emmi results press conference: net profit is up 28.3 % to CHF 75.3 million, and the net profit margin stands at 2.9 %.

April• Important visitor to the Emmen site: Doris Leuthard, President of the Swiss Confederation, learns about milk pro-cessing and is impressed by the innovative products.

• A new arrival in the Luzerner cheese family: Rustico forms a tangy addition to the mild, creamy Rahmkäse range.

9 theYear2010atemmi

May• Launch of Emmi Caffè Latte Intenso – a cup of extra strong passion with a unique intense character.

• Emmi General Meeting: over 1,200 shareholders attend and approve the CHF 0.40 increase in the share dividend to CHF 3.00 and the election of Domi-nique Christian Bach to the Board of Directors.

June• The Competition Commission approves the acquisition of Fromalp AG. Emmi will now be able to strengthen its interna-tional business, leverage synergies and further increase efficiency through the integration of the cheese specialist, which has an export share of around 40 %.

• The new spray tower for the production of powdered milk is com-missioned in Dagmer-sellen.

July• Nantwich Interna-tional Cheese Show – Emmi wins six awards at the world’s largest cheese show, with Emmi KALTBACH Le Gruyère AOC receiving two golds.

• Emmi presents encouraging half-year results, with sales almost flat year on year and net profit up 21.5 % to CHF 39.9 million.

August• 150 products are positioned under the “Emmi” umbrella brand and given a new look with typical Swiss sym-bols and the silhouette of a mountain peak in red and white.

• Emmi supports the 1 August cultural celebrations with a red and white light instal-lation at five different locations throughout Switzerland.

• Emmi acquires the US goat’s cheese specialist Cypress Grove Chèvre and strengthens its market position in the USA.

September• Emmi invests in the Basel region, taking over the Regio Molkerei beider Basel dairy in Frenkendorf. A range of dairy products with milk from the region will be manufactured here as of spring 2011.

• The new communica-tion campaign – “Real Swiss indulgence” – is launched to underline the high quality of Emmi’s products made with Swiss milk.

October• Work on expanding the cheese-ageing cave in Kaltbach to 2,130 m took two years, and now up to 156,000 cheeses can be stored and matured in the cave’s passages.

• The new KALTBACH Extra, a cave-aged, semi-hard cheese, is launched to coincide with the opening of the cave.

• Emmi presents its products to an interna-tional audience at the SIAL food fair in Paris.

November• Emmi acquires the global rights to the Onken brand from Dr. Oetker. Onken yoghurt is sold primarily in the UK and Germany, two key Emmi markets that will help significant-ly strengthen Emmi’s market position and improve market access for Swiss exports.

• The recently launched Emmi KALTBACH Extra and the classic Emmi KALTBACH Emmen-taler AOC achieve great success at the World Cheese Awards in Birmingham.

December• Emmi announces the acquisition of the “Le petit chevrier” brand from Fromagerie Bettex in Champtauroz. The goat’s milk specialities will in future be manu-factured in Kaltbach and at the Regio Molkerei beider Basel in Frenk-endorf.

• Natalie Rüedi, Head of HR for the Emmi Group, is promoted to member of Group Management.

• Emmi achieves mar-ket capitalization of CHF 1 billion.

11theYear2010atemmi

Emmi generated net sales of CHF 2,684 million in the 2010 financial

year, 2.5 % more than the previous year. Net profit rose by 14.3 % to

CHF 86.1 million in 2010, while earnings before interest and taxes

(EBIT) increased by 24.5 % to CHF 135.8 million, resulting in an EBIT

margin of 5.1 % versus 4.2 % the previous year. This significant increase

in earnings was largely attributable to strong performance by our

latest acquisitions, encouraging international growth and consistent

cost management.

Sales and earnings targets exceeded

GroUpreport12

Products and markets

Emmi generated net sales of CHF 2,684 million in 2010,

which corresponds to an increase of 2.5 % on the previous

year (CHF 2,619 million). Adjusted for acquisitions and foreign

currency effects, growth at Group level amounted to 1.3 %,

putting sales above expectations despite the challenging

currency environment.

Both earnings before interest and taxes (EBIT) and net profit

increased significantly, with EBIT up 24.5 % from CHF 109.0

million in 2009 to CHF 135.8 million and net profit up 14.3 %

from CHF 75.3 million to CHF 86.1 during the same period.

In Switzerland, net sales rose by 0.4 % to CHF 1,952 million

(prior year CHF 1,944 million), due to positive factors, includ-

ing strong performance of brand concepts like Emmi Caffè

Latte, Kaltbach and Luzerner, as well as the acquisition of

Fromalp and Nutrifrais. Contrasted with these positive fac-

tors are price reductions due to lower milk prices and the loss

of a major customer in 2009, the impact of which are seen in

the figures for the last time and has been compensated by

volume. Adjusted for acquisitions, sales fell slightly by 1.5 %.

In its international markets, Emmi posted a sales increase of

8.4 % to CHF 732 million (prior year CHF 675 million), thanks

above all to the encouraging performance of Emmi Roth USA,

growth in the export of cheese and Emmi Caffè Latte, the

partnership with Venchiaredo and expansion of the Tren-

tinalatte brand in Italy, as well as the acquisition of Fromalp.

Emmi Group net sales, EBIT and net profit

in CHF million Switzerland International Group

Net sales 2010 1,952 732 2,684

Net sales 2009 1,944 675 2,619

Change in % 0.4 % 8.4 % 2.5 %

Acquisition effect 1.9 % 3.8 % 2.4 %

Currency effect – -4.8 % -1.2 %

Organic sales growth -1.5 % 9.4 % 1.3 %

Earnings before interest and taxes (EBIT) 2010 135.8

Earnings before interest and taxes (EBIT) 2009 109.0

Change in % 24.5 %

Net profit 2010 86.1

Net profit 2009 75.3

Change in % 14.3 %

Net sales

in CHF million

3,000

2,500

2,000

1,500

1,000

500

0

1,826

509

2,335

2006

1,914

587

2,501

2007

2,045

626

2,671

2008

1,944

675

2,619

2009

International

Switzerland

+8.4%

+0.4%

+2.5%

732

2,684

2010

1,952

Improved consumer sentiment in Emmi’s key markets both

contributed to this result and helped mitigate the effects

of the strong Swiss franc. In local currency and adjusted for

acquisitions, growth amounted to 9.4 %. International busi-

ness accounts for 27.3 % of total Group sales.

GroUpreport 13

Developments in SwitzerlandWith the exception of dairy products and fresh cheese, all

product groups achieved sales growth, thanks largely to

the positive trend in fresh products, in particular continued

growth of Emmi Caffè Latte, as well as the acquisition of

Fromalp and Nutrifrais.

Emmi posted net cheese sales of CHF 546.0 million in 2010,

signifying growth of 2.7 % compared with CHF 531.7 million

the previous year. Contributory factors included the positive

development of the Kaltbach and Luzerner brands, as well as

the Fromalp acquisition, which brought growth in the second

half-year. At the same time, however, price pressure on own-

brand products in the lower price segment had a negative

impact, due to increasing import volumes of products such as

processed cheese. Organic decrease (adjusted for acquisitions)

amounted to 1.6 %.

Net sales of fresh cheese were down 2.0 % to CHF 131.9 mil-

lion, from CHF 134.6 million the previous year. This was attrib-

utable to price reductions due to lower milk prices and, here

again, increasing import pressure on own-brand products.

Organic decrease was 2.3 %.

Fresh products were up 3.3 % on the previous year, from

CHF 357.7 million to CHF 369.6 million, thanks again to

double-digit growth by Emmi Caffè Latte and sales growth

achieved by Nutrifrais in Geneva, acquired in 2009. The repo-

sitioning of the Emmi umbrella brand was also well received.

Organic growth was 0.4 %.

Net sales of dairy products (milk, cream and butter) dropped

by 2.5 % in 2010 to CHF 717.2 million, compared with

CHF 735.4 million the previous year. Contributory factors

included price reductions due to lower milk prices and a de-

cline in the sale of generic products following the loss of a

major customer in 2009, although volumes remained stable.

Organic decrease was 2.8 %.

Net sales of powder/concentrates were up 2.4 % from

CHF 65.0 million to CHF 66.5 million in 2010, thanks to slightly

higher sales to the chocolate industry.

Other products and services rose slightly by 0.8 % to CHF 120.7

million from CHF 119.7 million the previous year. This increase

is attributable to slightly higher volumes in logistics services

and trading business. Organic growth was 0.5 %.

Net sales performance by product group: Switzerland

in CHF millionNet sales

2010Net sales

2009Net sales

2008Difference

2010/2009Acquisitions-

effectCurrency

effectOrganic growth

Cheese 546.0 531.7 542.4 2.7 % 4.3 % – -1.6 %

Fresh cheese 131.9 134.6 138.1 -2.0 % 0.3 % – -2.3 %

Fresh products 369.6 357.7 358.7 3.3 % 2.9 % – 0.4 %

Dairy products 717.2 735.4 788.8 -2.5 % 0.3 % – -2.8 %

Powder/concentrates 66.5 65.0 78.1 2.4 % – – 2.4 %

Other products and services 120.7 119.7 139.4 0.8 % 0.3 % – 0.5 %

Group 1,951.9 1,944.1 2,045.5 0.4 % 1.9 % – -1.5 %

GroUpreport14

Development in international marketsWith the exception of fresh products, sales rose in all product

groups. Cheese performed particularly well, achieving signifi-

cant growth. Improved consumer sentiment in the US and

Germany, Emmi’s two largest international markets, also con-

tributed to this result and helped mitigate the effects of the

strong Swiss franc.

Net sales of cheese amounted to CHF 411.6 million in 2010,

signifying an increase of 6.2 % in comparison with CHF 387.7

million the previous year. Thanks to the extremely strong

performance of Emmi Roth USA, we succeeded in increasing

not only sales of locally produced cheese in the US but also

of cheese exports from Switzerland. Fondue sales increased

significantly in almost all key markets. Further factors contrib-

uting to the rise in sales included the acquisitions of Fromalp

and the US firm Cypress Grove Chèvre. Adjusted for currency

and acquisitions, organic growth was 4.1 %.

Net sales in the area of fresh cheese rose from CHF 0.6 million

to CHF 33.2 million in 2010, thanks to the new partnership

with Venchiaredo and expansion of the Trentinalatte brand

in Italy.

Fresh products posted a 7.2 % decline in net sales to CHF 191.5

million from CHF 206.3 million the previous year. This is pri-

marily attributable to the exchange rate effect and to slight

declines in Germany, which we had anticipated as a result of

reduced marketing activities. The new Emmi umbrella brand

campaign has been running in Germany since October and

has been having a positive impact since the end of the year.

The Italian company Trentinalatte’s low-priced private-label

products also showed certain losses. Emmi Caffè Latte, with

its double-digit growth, was again a success factor. Organic

growth in net sales was flat.

Dairy products achieved net sales of CHF 16.5 million. Com-

pared with CHF 10.3 million the previous year, this figure

signifies an increase of 59.8 % and was attributable to bag-in-

box business for the food-service industry generated via

CASP USA.

Net sales of powder/concentrates rose by 0.5 % to CHF 20.6

million in 2010, following CHF 20.5 million in 2009. In contrast

to the previous year, there were no additional exports to take

the pressure off the Swiss milk market.

Net sales of other products and services increased by 17.4 %

to CHF 58.4 million from CHF 49.8 million the previous year,

thanks to a positive development of the manufacture of

private-label soya products and logistics services. Organic

growth was 24.0 %.

Net sales performance by product group: International

in CHF millionNet sales

2010Net sales

2009Net sales

2008Difference

2010/2009Acquisition

effectCurrency

effectOrganic growth

Cheese 411.6 387.7 330.3 6.2 % 5.6 % -3.5 % 4.1 %

Fresh cheese 33.2 0.6 1.6 n/a – – n/a

Fresh products 191.5 206.3 222.7 -7.2 % – -7.2 % –

Dairy products 16.5 10.3 7.4 59.8 % 37.5 % -5.0 % 27.3 %

Powder/concentrates 20.6 20.5 11.9 0.5 % – – 0.5 %

Other products and services 58.4 49.8 51.4 17.4 % 0.1 % -6.7 % 24.0 %

Total 731.8 675.2 625.3 8.4 % 3.8 % -4.8 % 9.4 %

72.7% Switzerland

18.4% Europe excluding Switzerland

8.1% North and South America

0.8% Asia/Pacific

Net sales by country group 2010

GroUpreport 15

Significant increase in earnings at all levels

Excellent operating resultGross operating profit rose by 4.8 % to CHF 892.5 million

(prior year CHF 852.0 million). Contributory factors included

the extension of the value chain through increased produc-

tion of fruit bases for fresh products by Emmi rather than by

third parties, as well as cheaper sourcing of non-milk related

raw materials. Further positive factors were the optimization

of our range with products with greater added value and the

elimination of products with low sales potential. The gross

profit margin was 33.3 % (prior year 32.6 %).

As a result of acquisitions, personnel expenses rose by 2.5 %

to CHF 332.2 million (previous year CHF 324.0 million), while

marketing expenses were up 2.3 % from CHF 105.1 million

to CHF 107.6 million, with advertising costs having risen at

a higher rate due to increased investments. Other operating

expenses were up 2.9 % to CHF 330.7 million from CHF 321.2

million in 2009. Headcount at the end of 2010 amounted to

3,701 employees (previous year 3,525 employees).

Earnings before interest, taxes, depreciation and amortiza-

tion (EBITDA) recorded a clear improvement of 12.2 % to CHF

233.6 million (previous year CHF 208.3 million), resulting in an

increased EBITDA margin, from 8.0 % in the previous year to

8.7 %. Depreciation and amortization fell from CHF 90.0 mil-

lion to CHF 82.3 million, due to an exceptional value adjust-

ment in the US in 2009. Write-backs of negative goodwill con-

tinued to fall, from CHF 4.2 million the previous year to CHF

1.4 million, while amortization rose from CHF 13.5 million to

CHF 16.9 million due to acquisitions.

Earnings before interest and taxes (EBIT) amounted to CHF

135.8 million in the year under review, compared with CHF

109.0 million the previous year, representing an encouraging

increase of CHF 26.8 million, or 24.5 %. This led to a clear im-

provement in the EBIT margin to 5.1 % (previous year 4.2 %).

109.0

4.2

EBIT

in CHF million

140

130

120

110

100

90

80

70

60

502006

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2007 2008 2009 2010

102.1

3.8

62.3

2.5

3.2

74.0

as % of net sales

135.8

5.1

Operating expenses, on the other hand, increased at a dispro-

portionately low rate of 2.7 % in the 2010 financial year from

CHF 645.2 million to CHF 662.9 million, with additional activi-

ties such as the manufacture of fruit bases being performed

at little extra expense. Productivity improved in all areas,

thanks to considerable savings resulting from consistent cost

management.

GroUpreport16

Net profit margin above expectationsThe financial result of CHF -18.2 million (prior year CHF -8.7

million) was influenced by the negative foreign currency re-

sult due to the strong Swiss franc. At CHF 15.8 million, taxes

were on a par with the prior-year level, with the tax rate re-

maining low at 13.1 %. Minority interests increased by 53.3 %

to CHF 18.4 million (prior year CHF 12.0 million).

Outlook for 2011Emmi will continue to drive forward its strategy, setting store

by successful brand concepts and rigorous cost manage-

ment as a basis for consolidating its position in the domestic

market and reinforcing it in key international markets. The

company has solid foundations with which to withstand the

persistent market and price pressure and achieve long-term

growth in an increasingly liberalized market.

Emmi expects consumer sentiment in Switzerland, and in the

USA and Germany – its two most important international

markets – to remain stable in 2011. Raw milk prices are likely

to remain at the previous year’s level during the first half of

the year, while the cost of other raw materials (coffee, fruit,

cereals) and packaging is set to rise. The strength of the Swiss

franc will result in further price increases, and the effect this

is likely to have on consumer demand, especially for cheese,

remains a risk.

In 2011, Emmi will continue to invest in further expanding its

international business and strengthening its domestic mar-

ket. Emmi is still aiming for volume growth in its international

markets of 6 % to 8 % (organic) and 8 % to 10 % (acquisition-

driven) in the medium to long term.

54.0

41.3

58.7

75.3

2.3 1.6

2.2

2.9

Net profit


90

80

70

60

50

40

30

20

10

02006

3.5

3.0

2.5

2.0

1.5

1.0

0.5

2007 2008 2009 2010

86.1

3.2

GroUpreport 17

18 thebestfromthebest

Beautifully sweet, with a gentle, refreshing hint of

acidity. The intense flavour of Willamette raspber-

ries compliments dairy products perfectly. Harvest-

ed from vast specialist fruit fields, the berries are

frozen immediately after picking to preserve their

full flavour and perfect appearance until they are

ready to be processed. Rich in vitamins and nutri-

ents, raspberries were described and revered by the

ancient Greeks and Romans already. Raspberries

are now one of the most popular fruits in yoghurt

and quark.

Perfect appearance, ideal flavour

19thebestfromthebest

Careful processing from start to finishThe berries are carefully processed before being

blended into the creamy yoghurt. Emmi has been

producing fruit preparations for decades, constant-

ly building on its expertise. The new infrastructure

installed at the Emmen site in 2010 allows fruits to

be preserved in a way that best retains their quali-

ties – the warming technique preserves their full

flavour and vivid colour. Emmi is proud of its high-

quality, natural products such as Toni yoghurt. It

goes without saying that no preservatives or artifi-

cial colours are added to Emmi’s products.

Emmi is the number one Swiss milk processor, the leading company in

Swiss cheese in Switzerland and abroad and one of the most innova-

tive premium dairies in Europe. With its strong position in its domes-

tic market and the targeted expansion of its international business,

Emmi aims to achieve long-term success as an independent company

in open markets. Emmi intends to achieve its objectives with a high

degree of innovation performance, product quality and product safety,

and through investments in a sustainable production chain and

targeted training of employees. This requires above-average specialist

knowledge, great commitment and a high degree of motivation from

all employees.

Genuine Swiss Premium Taste

20 Corporate responsibility report

A corporate strategy based on three pillars

Emmi wants to consolidate its strong market position and

achieve long-term success as an independent company in

open markets. It intends to achieve this by means of a strat-

egy based on three pillars, namely defending its strong posi-

tion in its domestic market, targeted international growth

and dedicated, long-term cost management. Using this strate-

gy, Emmi aims to generate a net profit margin of 2.5 % to 3.5 %

and to maintain an equity capital structure of at least 40 %

shareholders’ equity in the next few years. Over the medium

to long term, Emmi aims to generate sales of CHF 4 billion

through organic growth and acquisitions in key international

markets.

The Swiss market is increasingly competitive due to ongo-

ing market liberalization. Emmi therefore not only has to

outperform domestic, but increasingly also foreign competi-

tion. As the largest Swiss milk processor and a reliable trading

partner, the company has a strong domestic base (see loca-

tion on page 86) and will maintain this position going forward

through product and service quality and a high degree of

professionalism. Thanks to effective measures aimed at im-

proving efficiency as well as strict cost management, Emmi is

investing in productive structures that conform to European

standards to equip itself for an ever-increasing degree of lib-

eralization. Emmi aims to remain competitive operating from

its Swiss base and strengthen the Swiss production location

for the long term by means of strengthening its brand plat-

forms, targeted innovation and more efficient operational

processes.

Germany, Italy, Austria, the UK, the Benelux countries and the

US are Emmi’s key markets, where the company is seeking to

expand its international business. Emmi also selectively culti-

vates opportunities in other markets and works closely with

strategic partners such as Spain’s Kaiku Corporación Alimen-

taria S.L. for the Spanish and South American markets or Ital-

ian cheese specialist Ambrosi S.p.A for the French market.

Strengthening the Emmi umbrella brandCompeting with the largest food groups requires a steady

strengthening of the “Emmi” brand and a strategic focus on

individual markets. Thus, around 150 products were reposi-

tioned under the Emmi umbrella brand in 2010 and given a

new look with typical Swiss symbols and the silhouette of a

mountain peak in red and white. This rebranding helps to re-

inforce the Emmi brand.

Emmi has also invested in other products demonstrating high

growth and earnings potential. For example, capacity in the

sandstone caves in Kaltbach in the Canton of Lucerne has

been doubled to meet the growing demand for cave-aged

cheese specialities. Emmi Caffè Latte has also been bolstered

by marketing activities in Switzerland, Germany, Austria,

Benelux and the UK. Innovation is being used to add to these

strong brand platforms in a targeted manner.

The measures to strengthen the brand and increase interna-

tional recognition have been accompanied by Emmi’s spon-

sorship activities as an official partner to the FIS Ski World

Cup. Emmi’s presence at selected races conveys Swiss values

to a large domestic and international audience. Emmi is also

involved at local and regional levels by providing products to a

range of cultural, sporting, social and community events and

projects.

Acquisitions Acquisitions in 2010 included, among others, the global rights

to the Onken brand from Dr. Oetker. From 2011, this will help

Emmi to significantly strengthen its market position in two

of its key markets, the UK and Germany, and improve market

access for Swiss exports. The acquisition of Cypress Grove

Chèvre and the “Le Petit Chevrier” brand from Fromagerie

Bettex brought top-quality goat’s milk specialties into the

Emmi fold. Cypress Grove Chèvre adds to the range of cheese

specialities available in the US, and Bettex to those available

in Switzerland. The domestic market and North-West Swit-

zerland in particular have been reinforced by the acquisition

of Regio Milch beider Basel (now Regio Molkerei beider Basel).

The acquisition of Berne-based Fromalp, with an export share

of 40 %, will have a positive effect on both the Swiss market

and key international markets.

21Corporate responsibility report

Trends, quality assurance and the environment

Systematic development and innovationInnovative strength is a central component of Emmi’s corpo-

rate culture and a key success factor for the company. As a

result of its targeted launch of new products, Emmi is one of

Europe’s innovation leaders in the premium segment of dairy

products. In order to maintain this position in the future, Emmi

constantly invests in research and development. This area has

been made even more professional by processing all ideas in

the Activity Management Process system. From idea to launch,

every new product initiative follows the same process. Emmi’s

development staff focus on major trends in their work, namely

taste, convenience, health and wellbeing. Throughout the

product development cycle, Emmi also places special emphasis

on ethics and sustainability. Research and development are

closely linked to product marketing, sales and management in

order to be able to operate close to the market.

Improvements in market research have enabled Emmi to

further develop its understanding of consumers and there-

fore acquire a better knowledge of market behaviour. These

insights enable Emmi to hone its competitive edge in an inter-

national environment and react quickly to new needs in the

food sector.

Committed to a strong milk sectorAs the largest milk processor in Switzerland, Emmi is aware of

the challenges of liberalizing markets and is preparing itself

by means of targeted measures such as improvements in ef-

ficiency and productivity, rigorous cost management and the

creation of structures that conform to European standards. At

the same time, Emmi maintains a strong interest in a highly

productive agricultural and food industry in Switzerland.

The company firmly believes that the Swiss dairy industry

can achieve long-term success with first-class products, and

therefore supports the federal government’s policy, while

also advocating an industry solution aimed at stabilizing the

milk market via the Milk Sector Organization (BOM).

Emmi again processed more Swiss milk in 2010 than in the

prior year (873 million kg compared with 834 million kg). Or-

ganic milk, at 84 million kg, represents around 10 % of this fig-

ure. The company also purchased and processed 40 million kg

of cream. Emmi processed another 79 million kg of milk at its

three foreign production locations, Trentinalatte in Italy, and

Emmi Roth USA and CASP in the United States. The Swiss milk

is obtained from direct suppliers and selected producer orga-

nizations. The company is an important source of income and

a reliable partner for some 6,500 Swiss milk producers. This

partnership commits Emmi to and anchors it in Switzerland.

Volumes of milk and cream processed

in Switzerland, in kg million

1,000

800

600

400

200

0

41808

849886

963

20061)

53833

2007

83

880

2008

38834

20092)

Cream

Milk

1) incl. Mittelland Molkerei as of 1 April 20062) incl. Nutrifrais SA as of 8 July 20093) incl. Fromalp AG as of 1 July 2010

40873

20103)

872913


Quality and safety of paramount importanceAs a premium dairy, Emmi has a great responsibility towards

its consumers. High quality and food safety are of utmost

importance for the company in producing and marketing its

products.

The organization of quality management, areas of responsibil-

ity and ongoing optimization processes are defined in “Emmi

Process Management”, which is certified by the Société Gé-

nérale de Surveillance SA (SGS) in accordance with ISO 9001

and the British Retail Consortium Global Food Standard (BRC).

Process control and documented quality assurance are impor-

tant components of this approach and Emmi makes effective

use of the HACCP (Hazard Analysis and Critical Control Points)

concept as a key element of the self-regulation process. Inter-

nal and external audits serve to review the required quality

standards and their ongoing optimization – from raw mate-

rial to the end product. Emmi is also certified for producing

organic products and bears the “Suisse Garantie” label. Based

on the conviction that only the best is good enough for con-

sumers, Emmi deliberately goes beyond legal requirements

when drawing up and implementing the company’s quality

and safety concepts.

Natural, high-quality productsEmmi regards the processing of natural, high-quality raw ma-

terials as a decisive factor for success in Switzerland and on

international markets with Swiss dairy products. This includes

environmentally friendly production and rejection of geneti-

cally modified raw materials. Emmi aims to be synonymous

with naturalness, quality and safety. The company requires

the same self-image from its suppliers. Swiss milk producers

commit to meeting strict requirements for sound environ-

mental practice certification and refrain from using any ge-

netically modified animal feed. Suppliers of other raw materi-

als are also bound by clearly defined quality requirements.

Furthermore, Swiss agriculture has introduced a common,

standardized mark of origin for domestic agricultural prod-

ucts: “Suisse Garantie” means that Switzerland is the country

of origin and processing, that clear requirements are placed

on production and processing methods and that a well-run,

independent control and certification system is guaranteed.

Traceability throughout the entire production chainFrom animal feed for cows through production and process-

ing to the milk product itself – at Emmi, the entire produc-

tion chain is embedded in an integrated quality assurance

and control system. This system ensures that all products

are traceable, giving retail trade customers and consumers

the greatest possible level of security regarding the origins of

Emmi’s premium products.


Corporate culture committed to sustainabilityEmmi’s corporate culture and values are based on the convic-

tion that trust, appreciation and honesty are the key elements

of long-term success. The company is therefore committed

to moderate usage of natural resources throughout the value

chain – from sourcing through processing and refining meth-

ods to distribution – and undertakes to pursue environmen-

tally aware corporate management.

An in-house environmental management team is responsible

for defining environmental objectives, monitoring compliance

and documenting performance at regular intervals. Under

this process, Emmi complies with international standards. All

Emmi locations in Switzerland are ISO 14001 certified and

are audited on an annual basis by the SGS (Société Générale

de Surveillance SA) certification institution. Environmental

objectives and standards are also applied at production com-

panies abroad.

The Emmi Group has been a member of the Energy Agency

for Industry (EnAW) since 2003. In recent years, Emmi worked

carefully towards reaching the CO2 objectives agreed with

the federal government for 2010, which consisted of reduc-

ing CO2 intensity to 79.92 % and increasing energy efficiency

by 12.18 % compared to 2000 levels. The company was able

to exceed both of these objectives by means of a variety of

broadly diversified measures. As a result, the Federal Office

for the Environment (FOEN) exempted Emmi from its obliga-

tion to pay the CO2 levy.

With environmental objectives in mind, the company al-

ways takes the latest technological and scientific develop-

ments into account for new and replacement assets. Through

further training and education, employees’ environmental

awareness is continually improved.

In a drive to improve the Group’s ecobalance, a wide range

of measures aimed at saving water and energy as well as

minimizing the creation of wastewater, rubbish and other

emissions were also successfully implemented at production

locations in the year under review. This enabled emissions to

be reduced markedly over the last two years.

In the summer of 2011, Emmi will for the first time publish a

corporate sustainability report that will present and deal with

these and other topics in detail.

Environmental index Emmi Group 2008–2010

in %

102

100

98

96

94

92

90

88

86

842008

100.098.9

97.196.9

89.9

2009 2010

98.6

94.8

92.3

88.0

Product sales

Electricity consumption

Water consumption

Waste to incineration plant


Employees as a success factor

Emmi recognizes that its employees are one of the company’s

most important success factors. Human resources work is

therefore considered to be of high strategic importance. Emmi

aims to be perceived as a preferred, successful employer that

is seen to value its employees. The company can only achieve

its business objectives with well-performing employees. Emmi

stresses that managers must take full account of human re-

sources issues and lead by example.

Corporate valuesFive corporate values govern how we work together:

– We are Emmi

– We are market-oriented

– We know how

– We are proactive, and not afraid of hard work

– We are continually developing.

Following a lengthy development phase with management,

these values were presented to Emmi as a whole at the staff

event in Sursee in May 2010. In order to make these values

visible and tangible, the different divisions of the company

then began to implement them in their areas. Discussion in

the departments was actively fostered by means of clear ob-

jectives. Management also defined how they would reinforce

these values. This resulted in a managerial mission statement

that, together with the values, is incorporated into the vari-

ous human resources management instruments and forms

the basis of a uniform system of leadership values.

Co-determination encouragedAll employees have access to a variety of options to express

their concerns, opinions and ideas. In general, it is the role of

the employee committees (Pekos) to represent employees’

interests to management. Employees may also consult the

Pekos if they need individual advice or support. For personal

matters, employees should rather approach their line man-

ager or a specialist in the HR department.

Employee involvement is not limited solely to the activities

of the Pekos. Various locations are now gathering employees’

ideas and implementing them as part of the cost and quality

optimization programme.

International

Switzerland

3,066

3,525

2009

459

3,053

3,373

2008

320

2,983

3,300

2006

317

3,041

3,350

2007

309

Headcount

Number of full-time equivalents

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

3,153

3,701

2010

548


Comprehensive health management“Health is a global reality”. The HR strategy determines that

this principle is a necessity if employees are to be performing

well. The former health policy was almost entirely directed

towards the individual, for example towards safety at work to

prevent occupational accidents or towards individual stress

prevention. Occupational health management will in future

take a more holistic view and look at employees’ overall envi-

ronments. This approach aims to improve working conditions

and the way work is organized, promote the active inclusion

of employees and strengthen individual competences. All of

these factors have a beneficial effect on wellbeing and there-

fore on employees’ health.

Errors and absences are an indication of inadequate health.

Emmi is taking a good look at all aspects of the roles played by

resources, pressure, stress, burn-out and rest, as well as fac-

tors such as satisfaction with and enjoyment of work. Insights

gained from these investigations will be used to further de-

velop health management.

Practical management instrumentsBased on the challenges faced by our managers in their daily

work, management training was restructured in 2010. The

company has come up with a new concept that transfers

neuroscientific findings into everyday working life. The train-

ing discusses the question of how employees function using

detailed, exciting models and examples from our own experi-

ence and behaviour.

At employee level, the main focus is on professional training.

While knowledge transfer in the workplace (learning on the

job) is the most widespread form, Emmi also supports exter-

nal training courses that increase specialist knowledge. There

is also a wide range of internal training available, focusing

mainly on work methodology.

Human resources management instruments need to be con-

sistent if they are to ensure that our corporate values and

strategic objectives inform our employees’ day-to-day work.

From requirements profiles for new entrants to job transfers,

all aspects of the instruments and aids have been amended to

take into account the three areas of goal orientation, compe-

tence orientation and satisfaction orientation. To ensure that

these work in practice, line managers from various areas were

involved in the development of each of these instruments.

The competence model forms a key element of these instru-

ments. This helps line managers and employees to foster and

put into practice personal development and was introduced

into Group Management and the Management Team in 2010.

Organizational development and HR development from a single sourceOne of the responsibilities of a preferred, successful employer

is to develop and encourage its employees. This should in-

clude, on the one hand, preparing them for increasing inter-

nationalization within the Emmi Group and the demands this

will place on them and, on the other, career prospects and

personal incentives.

Professional training is the foundation to secure the necessary

knowledge and skills. Emmi employs more than 100 appren-

tices. All of the 30 apprentices in seven different occupations

completing their training in 2010 passed their final examina-

tions. More than 50 % of them were retained by the company

following the completion of their training, most of them on

permanent contracts. Various measures are planned to pro-

gressively increase this percentage.

A wide range of training opportunities are available to all em-

ployees, with a particular emphasis on professional training,

methodology and management.


Consciously promoting talentThrough its Management Practice programme, Emmi is mak-

ing progress towards targeted, focused promotion of talent.

The participants in this programme are members of middle

management with the potential for complex leadership roles.

The programme aims to invest in the skills of the key manage-

ment members of tomorrow. Participants work in groups and

spend several months tackling a genuine issue faced by the

company. They are supported by the project principal and two

coaches who give each participant extensive feedback on his

or her strengths and improvement potential. The programme

focuses on personal development, with participants being set

defined development goals at the outset.

Emmi also offers placements at foreign subsidiaries.

“Expatriates” get assistance before and during the placement.

Enhancing our imageEmmi’s image as an employer is to be enhanced and made

more consistent in the future. Emmi benefits from strong

product brands in various sectors, which makes the company

attractive to current and potential employees in segments

such as marketing, sales and development. There remains a

need to act in other segments, however, where Emmi’s image

still lacks clarity. The Employer Branding project is aimed at

positioning Emmi as a preferred employer and establish-

ing employer branding as an ongoing communications task

within the Group.


Cereals have been a primary foodstuff since

the dawn of time. In the form of bread or

muesli, cereal products ensure a good start

into the day or give an energy boost while on

the go. Wheat, rice and maize are the most

important cereal crops worldwide. Together,

wheat and oats form the basis of the classic

Birchermüesli. Both cereals are good sources

of dietary fibre and are rich in vitamins

and minerals. Oats also have a nutty aroma,

which gives our muesli its special, full-bodied

flavour.

Full-bodied, hearty, pure

28 the best FroM the best

A modern interpretation of a traditional dishThe original Swiss Birchermüesli has been

part of the country’s culinary heritage for

over a century. This mixture of yoghurt,

fruits and oatflakes makes for a light, appe-

tizing meal. Emmi’s Swiss Müesli is a mod-

ern interpretation of this traditional recipe.

Made with yoghurt and one-third fruits such

as apple, pineapple and banana, the principle

ingredients of Swiss Müesli are its cereal

flakes made from Swiss wheat and oats. The

cereal flakes make the muesli both whole-

some and tasty.

29the best FroM the best

The Emmi Group is committed to modern corporate governance prin-

ciples and aims to provide all stakeholders with the greatest transpar-

ency possible. The following information complies with the current

information relating to corporate governance (DCG) of the SIX Swiss

Exchange. Emmi’s corporate governance principles are also oriented to

the guidelines of the Swiss Code of Best Practice for Corporate Gover-

nance. Unless indicated otherwise, all data relate to the balance sheet

as at 31 December 2010.


30 Corporate GovernanCe


32 Group structure and shareholders

32 Capital structure

33 Board of Directors

40 Group Management

43 Compensation, participations and loans

43 Shareholders’ rights of co-determination

44 Change of control and defensive measures

44 Auditors

45 Information policy

Contents

31Corporate GovernanCe

Group structure as at

31 December 2010

Robin Barraclough

Marketing

Urs Riedener

Chief Executive Officer

Konrad Graber

Chairman of the Board

Group functions:– Agriculture– Corporate Development– Strategic Projects– Coordination Research & Development– Legal

– Group Communications & Investor Relations– Milk Procurement– Quality Management– System & Process Development– Internal Auditing

1) Member of Group Management from1 January 2011

Natalie Rüedi 1)

Human Resources

Reto Conrad

Finance & Controlling

Max Peter

Trade & SupplyChain Management

Othmar Dubach

Cheese

Markus Willimann

Industry

Marc Heim

Sales

Robert Muri

Dairy products

Matthias Kunz

International

1.3 Cross-shareholdingsThere are no cross-shareholdings with other companies that

exceed 5 % of capital or votes on both sides.

2. Capital structure

2.1 Share capitalEmmi’s share capital amounts to CHF 53,498,100.

2.2 Authorized and conditional capital in particular

Emmi did not create any conditional or authorized capital in

financial year 2010 and there is no conditional or authorized

capital from previous years.

2.3 Changes in capital An overview of changes in capital for the years 2007–2010

can be found on page 76 of the Financial Report.

1. Group structure and shareholders

1.1 Group structure as at 31 December 2010The Group structure of Emmi AG (hereinafter “Emmi”) is pre-

sented on this page.

All investments in subsidiaries and associates are listed on

pages 70, 71 and 77 of the Financial Report together with the

headquarters, share capital and the size of the equity interest.

The group of consolidated companies contains only non-listed

companies.

1.2 Significant shareholdersShareholders holding more than 3 % of the voting rights are

listed on page 78 of the Financial Report. No notification in

accordance with Art. 20 of the Federal Stock Exchange and

Securities Trading Act (SESTA) was received in the year under

review.

ZMP Invest AG, Lucerne, the Zentralschweizerischer Milch-

käuferverband (ZMKV), Willisau, and the MIBA Milchverband

der Nordwestschweiz, Basel, form a group in the sense of Arti-

cle 20 of the SESTA. The group owns 62.4 % (prior year 62.3 %)

of the total voting rights.


2.4 Shares and participation certificatesThe share capital of Emmi comprises 5,349,810 registered

shares (security no.: 1,282,989/ISIN Code: CH0012829898)

with a par value of CHF 10 per share. Only one category of

registered share exists and no participation certificates exist.

Further information on shares can be found on page 83 of

the Annual Report.

2.5 Dividend-right certificatesNo dividend-right certificates exist.

2.6 Restrictions on transferability and nominee registrations

There are no restrictions on the transfer of registered shares

of Emmi. The only precondition for entry in the share register

is a declaration on the part of the purchaser that the shares

have been acquired in his/her own name and for his/her

account. No other registration restrictions exist. The registra-

tion of fiduciaries/nominees without voting rights is permit-

ted. On request, the Board of Directors shall decide on the

registration of fiduciaries/nominees with voting rights on

a case-by-case basis. No fiduciaries/nominees with voting

rights were entered during the year under review, nor did the

Board of Directors approve any other exceptions for entry in

the share register.

2.7 Convertible bonds and optionsEmmi has neither convertible bonds nor options outstanding

to acquire ownership interests in Emmi. The same applies to

the other Group companies.

3. Board of Directors

3.1 Members of the Board of DirectorsAll nine members of the Emmi Board of Directors are non-executive members who were not previously members of Emmi Group

Management. Alexander Jost stepped down at the 2010 General Meeting and Dominique Christian Bach was elected as a new

Board member. The following table shows the names of the Board members, their country of origin and the year in which they were

elected. Moritz Erni, Hans Herzog and Thomas Oehen-Bühlmann are members of the Board of the Central Switzerland Milk Pro-

ducers cooperative (ZMP), which supplies a large proportion of its milk to the Emmi Group. Josef Schmidli produces a significant

proportion of his cheese for the Emmi Group.

Fritz Wyss (born 1944) has been Honorary President of the Emmi Board of Directors since 2010. Fritz Wyss was a member of the

Board of Directors from 1993 to 2009, as Delegate from 1993 to 2003 and Chairman from 2003 to 2009.

Members of the Emmi Board of Directors Year of birth Country of origin Education First elected

Konrad GraberChairman of the Board of Directors

1958 Switzerland Business Administration, HWVCertified Auditor

20062009 Chairman

Moritz ErniVice-Chairman of the Board of Directors

1952 Switzerland Certified Master FarmerCertified Independent Farmer

2003

Dominique Christian Bach 1957 France Stanford Executive Program, USAMarketing EDHEC, Lille, France

2010

Stephan Baer 1952 Switzerland Economics lic.oec.publ. 1999

Joseph Deiss 1946 Switzerland Economics and Sociology Prof. Dr. rer. pol.

2007

Hans Herzog 1951 Switzerland Certified Master Farmer 2002

Hanspeter Müller 1943 Switzerland Certified Accountant 1999

Thomas Oehen-Bühlmann 1958 Switzerland Certified Master Farmer 2009

Josef Schmidli 1957 Switzerland Federal Commercial DiplomaCertified Master Cheesemaker

2003


Members of the Board of Directors from left: Stephan Baer, thomas oehen-Bühlmann, Hans Herzog, Dominique Christian Bach, Konrad Graber (Chairman), Hanspeter Müller, Moritz erni (vice-Chairman), Josef Schmidli, Joseph Deiss and Ingrid Schmid (secretary of the Board of Directors)

3.2 Professional background and other activities and interests

Konrad GraberMember of the Board of Directors since 2006,

Chairman since 2009

Konrad Graber worked for KPMG in the auditing department

for both national and international companies from 1983,

latterly as Partner and Director. He spent eight years as Chair-

man of the Berufsprüfung für Treuhänder organization for pro-

fessional qualification as a fiduciary. Since 1999 he has been a

Partner at BDO AG, Lucerne, where he was also member of the

Swiss Executive Board from 2005 to 2009. In this capacity he

was responsible for management consultancy and IT.

Konrad Graber has been a member of the Board of Directors

of BDO AG since 2009. He is also Chairman of the Board of

Directors of the Lucerne Transport Corporation (Verkehrs-

betriebe Luzern AG) and a member of the Board of Directors

of the health insurer CSS Versicherungen. He was a long-

standing councillor for the canton of Lucerne, and from 1997

to 2001 he served as Chairman of the CVP (Christian Demo-

cratic People’s Party), also in the canton of Lucerne. In 2007

Konrad Graber was elected to the Council of States, becoming

a member of the National Parliament.

Moritz ErniMember of the Board of Directors since 2003,

Vice-Chairman since 2006

Moritz Erni works as an independent farmer and a training

instructor on his dairy farm. From 1980 to 2003 he was a

technical expert for apprentice and master examinations.

He has been Chairman of the Board of the Central Switzerland

Milk Producers cooperative (ZMP) since 2003 and Chairman

of the Board of Directors of ZMP Invest AG since 2006.

He is also a member of the Board of Swiss Milk Producers

(SMP) in Berne and a member of the Agricultural Chamber of

the Swiss Farmers’ Union.


Dominique Christian BachMember of the Board of Directors since 2010

Dominique C. Bach has held numerous key and management

roles in internationally active companies in the food and lux-

ury goods sectors, including Danone in France (1980 to 1985)

and Mars Incorporated in France and Sweden (1985 to 1996).

He also ran a San Francisco-based wine company belonging to

the luxury goods group LVMH/Moët Hennessy-Louis Vuitton

from 1996 to 2001, and was active as an independent entre-

preneur in London from 2001 to 2002. From 2003 to 2008 he

was responsible for the Central and Eastern European region

at the food and beverages company Pepsico, and from 2009

to 2010 he was Head of the Strauss Coffee division of the

Israeli food and beverages company Strauss Group.

Stephan BaerMember of the Board of Directors since 1999

Stephan Baer worked at OPM AG as a business analyst from

1979 to 1982 before moving to Baer AG in Küssnacht am Rigi,

where he was appointed Chief Executive Officer one year later

and became Chairman of the Board of Directors in 1997. Since

Baer AG was acquired by the French Lactalis Group in 2008,

he has worked as an independent management consultant.

Stephan Baer is also a member of the Boards of Directors of

several companies including Bio Partner Schweiz AG, Seon

and frXsh AG, Küssnacht am Rigi (Chairman).

Joseph DeissMember of the Board of Directors since 2007

Prof. Dr. Joseph Deiss was a longstanding lecturer in macroeco-

nomics at the University of Fribourg, before being appointed

Professor of Macroeconomics and Economic Policy in 1984.

Now a former Federal Councillor, Joseph Deiss began his politi-

cal career with an extended period as a member of the canton-

al council of Fribourg, of which he was Chairman in 1991. From

1982 to 1996 he was the Mayor of Barberêche (FR) and from

1991 to 1999 a member of the National Council. From 1993 to

1996 he was Switzerland’s price regulator, and in 1999 he was

elected to the Federal Council as a representative of the CVP

(Swiss Christian Democratic People’s Party). From 1999 to 2002

he was head of the Federal Department of Foreign Affairs, and

in 2003 he moved to the Department of Economic Affairs. He

served as Federal President in 2004.

Since his retirement from the Federal Council in 2006, Joseph

Deiss has been teaching a Masters course in Economic Policy

at the University of Fribourg. He is also a business consultant

and a member of the Board of Directors of various companies

(Zurich Insurance Company South Africa; Zurich Insurance Compa-

ny Ireland; Clinique Générale, Fribourg). Joseph Deiss has been

elected President of the United Nations General Assembly for

its 65th session from September 2010 to September 2011.

Hans HerzogMember of the Board of Directors since 2002

Hans Herzog works as an independent farmer and a training

instructor on his dairy farm. From 1992 to 2004 he was Chair-

man of the Central Switzerland Association of Producers of

Silage-Free Milk. Hans Herzog is a member of the Board of the

Central Switzerland Milk Producers cooperative (ZMP).

Hanspeter MüllerMember of the Board of Directors since 1999

Hanspeter Müller joined the MIBA Milchverband der Nord-

westschweiz in 1970 as Head of Finance. From 1994 to 1998

he was a member of the Board of Directors of Toni Holding

AG, Berne and from 1994 to 2003 he served as Managing

Director of MIBA.

Thomas Oehen-BühlmannMember of the Board of Directors since 2009

Thomas Oehen-Bühlmann is a certified master farmer and

works as an independent farmer on his own dairy and ar-

able farm. For many years he acted as a technical expert for

apprentice and master exams and was also Chairman of the

Supervisory Committee. He was head of the local branch of

the CVP (Christian Democratic People’s Party) for a number of

years and was a district councillor from 1996 to 2008, includ-

ing from 1996 to 2006 in Lieli and from 2007 to 2008 in

Hohenrain following the amalgamation of the municipalities.

Thomas Oehen-Bühlmann has been Mayor of Hohenrain since

2008 and is head of a municipal association for waste disposal

in the canton of Lucerne. He is a member of the Board of the

Central Switzerland Milk Producers cooperative (ZMP).

Josef SchmidliMember of the Board of Directors since 2003

After receiving a federal commercial diploma, Josef Schmidli

qualified as a master cheesemaker in 1982 and has worked as

a cheesemaker in Mühlau since then. Josef Schmidli has been

the proprietor and CEO of Käserei Schmidli GmbH since its

foundation in 1998.

Since 2002 he has been the Chairman of the Central Switzer-

land Milk Purchasers Association in Lucerne and its pension

fund. He is also Vice-Chairman of Fromarte, the association of

Swiss cheese specialists, and President of a municipal power

utility.


3.3 Election and term of officeMembers are elected to the Emmi Board of Directors for a

term of three years. Reelection is permitted. The members

are elected by the General Meeting, with the period between

one General Meeting and the end of the next deemed to be

one year. All current members of the Board of Directors are

elected until the 2012 General Meeting.

The elections of the existing members of the Board of Direc-

tors put forward for reelection are carried out as a block elec-

tion unless at least one shareholder requests individual elec-

tions. The elections of the Chairman and of new members are

carried out as individual elections. All votes and elections are

carried out by open ballot unless a majority requests a secret

ballot.

3.4 Internal organization3.4.1 Allocation of duties within the Board of Directors

The following table shows the names of the Chairman and Vice-Chairman of the Board of Directors and the allocation of other du-

ties within the Emmi Board of Directors.

Allocation of duties within

the Emmi Board of Directors

Controlling

Committee

Market

Committee

Committee for

Personnel Matters

Agricultural

Council

Konrad GraberChairman of the Board of Directors

• (Chairman) • • (Chairman) • (Chairman)

Moritz ErniVice-Chairman of the Board of Directors

• •

Dominique Christian BachMember

• (Chairman)

Stephan BaerMember

• •

Joseph DeissMember

• •

Hans HerzogMember

•

Hanspeter MüllerMember

•

Thomas Oehen-BühlmannMember

• •

Josef SchmidliMember

•


3.4.2 Composition, duties and delimitation of responsibili-

ties of the committees

The composition of the committees and the Agricultural

Council (hereinafter the “committees”) is shown in the table

above. The committees are subject to a regular assessment

of their performance (self-assessment).

The Controlling Committee supports the Board of Directors

in monitoring the management of the company, in particular

from a financial perspective. It is entitled to view all docu-

ments necessary for the performance of its duties and to re-

quest comprehensive information from all areas of the Group,

as well as the external auditors, at any time.

It comprises at least three members of the Board of Direc-

tors, of whom one is the Chairman of the Board of Directors.

Its meetings are attended by the CEO, the CFO, the Head of

Group Controlling and, on invitation, the head of internal au-

diting and the auditor in charge. The Controlling Committee

deliberates on and approves the auditing plan and the remu-

neration budget for the external auditors, and at the request

of the CFO, approves the choice of auditors for foreign Group

companies.

The Controlling Committee assesses the following, in particu-

lar, for the Board of Directors in an advisory or preparatory

capacity:

– the organization of accounting and the organization and

content of financial control, including internal auditing

– the effectiveness and independence of the external

auditors

– the results of internal and external auditing and the moni-

toring of action plans by management based on these

results

– Group and holding accounts and the results of subsidiary

companies

– the annual and investment budget

– the evaluation of risks and of the measures based on this

– financial and liquidity planning as well as business relations

with financial institutions

– financial reporting to shareholders and the public

– legal proceedings and out-of-court settlement of disputes

whose outcome may have implications for the financial

situation of the Group.

The Market Committee supports the Board of Directors in

monitoring the management of the company, in particular

from a medium and long-term strategic perspective. It offers

recommendations on the basic organization of brand, prod-

uct and market strategy as preparation for corporate strategy.

It comprises at least three members of the Board of Direc-

tors, of whom one is the Chairman of the Board of Directors,

and its meetings are attended by the CEO and, on invitation,

members of Group Management. The Market Committee has

no approval power. The Committee assesses or processes the

following for the Board of Directors in an advisory or prepara-

tory/follow-up capacity:

– the organization and composition of management based

on the Group’s strategy

– merger and acquisition projects, brand projects and prod-

uct and market investments based on the Group’s strategy

– the strengthening of the Emmi brand portfolio and innova-

tions based on the Group’s strategy

– the preparation of changes in strategy

– the development of key customers and markets as well as

critical business units

– the controlling of major projects.

The Committee for Personnel Matters supports the Board of

Directors in monitoring the management of the company, in

particular from a personnel perspective.

It comprises at least three members of the Board of Directors,

of whom one is the Chairman of the Board of Directors, and

its meetings are attended by the CEO on invitation. The Com-

mittee for Personnel Matters deliberates on and approves

remuneration for the Chairman of the Board of Directors, the

CEO and other members of Group Management. It elects the

members of Group Management, excluding the CEO.

The Committee for Personnel Matters assesses or processes

the following, in particular, for the Board of Directors in an ad-

visory or preparatory capacity:

– the salary policy of the Group as well as bonus and similar

performance-related plans, basic changes to pension fund

regulations and other retirement benefit plans

– the composition of Group Management

– succession planning and the evaluation of candidates for

the Board of Directors

– succession planning for the Chairman of Group Manage-

ment and, at the request of the CEO, for members of Group

Management

– employer representation in the Emmi Pension Foundation,

the Emmi Welfare Foundation and Group Management’s

supplementary retirement benefit plan.


The Agricultural Council, which consists of members of the

Board of Directors and specialists, supports the Board of Di-

rectors in monitoring the management of the company, in

particular with regard to milk procurement and agricultural

issues.

It comprises at least four individuals, of whom at least three

are members of the Board of Directors (the Chairman of the

Board of Directors plus two further members).

Internal and external experts inform the Agricultural Council

about the latest developments and provide its members with

advice where necessary. Members from the Emmi Group who

attend meetings include, as internal experts, the CEO, the

Head of Agriculture and the Head of Milk Procurement. The

external experts are the Managing Directors of the regional

milk producer organizations ZMP and MIBA, both of which

have a stake in Emmi, as well as the national milk producer

organization SMP.

The Agricultural Council has no approval power. It assesses

or processes the following, in particular, for the Board of

Directors in an advisory or preparatory capacity:

– general political issues

– the development of the milk and cheese industry and its

organizations

– milk volumes and price management

– milk and cheese procurement.

3.4.3 Work methods of the Board of Directors and its

committees

As a rule, the Emmi Board of Directors and its committees

meet as often as business requirements dictate. In 2010 the

Board of Directors held eleven approximately half-day meet-

ings and one whole-day strategy meeting. The Controlling

Committee met five times for 3 hours each, the Market Com-

mittee four times for 2.5 hours each and the Committee for

Personnel Matters four times for 1.5 hours each. The Agricul-

tural Council met twice for two hours each in 2010 (average

times).

Meetings held by the Board of Directors are also attended

by the CEO, the CFO and, depending on the topic, individual

members of Group Management. Individual items on the

agenda are handled exclusively within the Board of Directors,

i.e. excluding all participants who are not members of the

Board of Directors. The entire Group Management partici-

pates in the strategy meeting held by the Board of Directors.

The inclusion of members of Group Management in meetings

held by the committees is shown under Point 3.4.2. With the

exception of the Agricultural Council, the Emmi Board of Di-

rectors holds its meetings without any external experts.

The Chairman of the Board of Directors is a member of all

committees for the purposes of coordinating the various

committees of the Board of Directors and integrating the

Board of Directors as a whole. The chairpersons of the

committees report to the Board of Directors at every Board

meeting regarding their activities and results, and record

details of their consultations and decisions in minutes that

are distributed to all members of the Board of Directors. If any

important issues arise, the Board of Directors is informed

immediately. Overall responsibility for the duties assigned to

the committees remains with the Emmi Board of Directors.

3.5 Definition of responsibilities between the Board of Directors and Group Management

The Board of Directors is responsible for the overall management

of the company and the Group, as well as for monitoring the

management of the company. In accordance with Art. 716a Swiss

Code of Obligations, it has the following inalienable and non-

transferrable duties:

– the overall management of the company and the Group, in-

cluding the definition of medium and long-term strategies,

focal points for planning and guidelines for company policy, as

well as issuing the necessary directives

– the definition of basic organizations and related regulations

– the definition of guidelines for the organization of accounting,

financial control and financial planning

– the appointment and dismissal of individuals entrusted with

the task of both managing and representing the company,

namely the CEO, and the granting of signing authority

– the overall supervision of the corporate bodies entrusted with

the task of managing the company, namely with regard to

compliance with the law, Articles of Association, regulations

and directives

– the drafting of the Annual Report as well as the preparation of

the General Meeting and the implementation of its decisions

– the notification of the court in the event of over-indebtedness

– the determination of capital increases and related amend-

ments to the Articles of Association.

Based on the duties mentioned above, the Emmi Board of Direc-

tors deliberates on and determines the following issues:

– the annual and investment budget

– the annual and half-year results

– Group structure up to and including Group Management

– salary policy

– evaluation of the main risks

– investments, apart from budget, above CHF 0.5 million

– multi-year financial and liquidity planning


3.6 Information and control instruments vis-à-vis Group Management

The Emmi Board of Directors is informed at every meeting by

the Chairman, the Chairmen of the committees, the CEO, CFO

and – depending on the agenda item – by other members of

Group Management about current business developments,

the financial situation and key business events. The CEO and

CFO attend meetings held by the Controlling Committee,

while the CEO also participates in meetings of the Market

Committee, the Agricultural Council and, where necessary, the

Committee for Personnel Matters. In addition to the meetings,

every member of the Board of Directors can, having first in-

formed the Chairman of the Board of Directors accordingly, re-

quest information about business developments and, with the

authorization of the Chairman, about individual transactions.

The Chairman is kept up to date by the CEO on a regular basis, at

least once every fortnight, and receives the minutes of all Group

Management meetings. He ensures an appropriate flow of in-

formation between Group Management and the Board of Direc-

tors. Members of the Board of Directors are informed imme-

diately of exceptional incidents by means of circular letter. The

management information system (MIS) is structured as follows:

– Members of the Board of Directors receive detailed sales

statistics on a monthly basis.

– On a quarterly basis, consolidated financial statements are

prepared and the Board of Directors is provided with de-

tailed documents showing the performance and financial

situation of the company.

– The members of the Controlling Committee receive the

Group financial statements as well as the accounts of all

subsidiaries on a quarterly basis and are informed in detail

in order to assess quarterly financial performance.

At least once a year the Board of Directors is informed by the

CEO for its approval concerning the development of the main

risks and their assessment on the basis of relevance and likeli-

hood of occurrence. The Board of Directors monitors the defi-

nition and implementation of risk management measures by

Group Management.

The Controlling Committee evaluates the effectiveness of the

internal and external control systems as well as the risk man-

agement organization and process of the Emmi Group.

The external auditor PricewaterhouseCoopers and the internal

auditor, who are directly linked to both the Chairman of the Con-

trolling Committee and the Controlling Committee itself, act as

additional information and control systems. Compliance is also

supported and jointly monitored by the Legal department.

– strategy-relevant cooperations and agreements, in particular

the purchase and sale of participations, companies, business

units, business areas and rights to products or intellectual prop-

erty rights, provided the annual turnover relating to the subject

of the transaction exceeds CHF 1 million

– the founding and dissolution of companies

– the proposal of candidates for the Board of Directors to the

General Meeting

– the election of the Boards of Directors of major subsidiaries

– Group regulations of strategic importance.

All other areas of management are delegated in full by the Board

of Directors to the Chairman and the CEO, who is authorized to

issue instructions to other members of Group Management. The

Board of Directors can, at any time, on a case-by-case basis or on

the basis of general powers reserved, intervene in the duties and

areas of competence of the corporate bodies that report to it and

take over business carried out by these bodies.

The CEO is the Chairman of Group Management. He leads, super-

vises and coordinates the members of Group Management and

grants them the necessary authority to perform their functions.

In accordance with the law and Emmi’s Articles of Association

and organizational regulations, he has the necessary authority to

lead the Emmi Group. He has in particular the following duties:

– the implementation of strategic objectives, definition of op-

erational thrusts and priorities and provision of the necessary

material and personnel resources to this end

– the leadership, supervision and coordination of the other mem-

bers of Group Management

– the convening, preparation and chairing of Group Manage-

ment meetings

– regular communication with the Chairman of the Board of Di-

rectors or the Board of Directors as a whole regarding business

developments. The Chairman of the Board of Directors must be

informed immediately of any important and unexpected busi-

ness events.

– representation of the Group internally and, upon consultation

(on strategic issues) with the Chairman of the Board of Direc-

tors, externally

– nominations to the Board of Directors for the election of all

members of the Boards of Directors of major subsidiaries.

The members of Group Management manage day-to-day busi-

ness independently. Their areas of competence and responsibil-

ity are determined, in particular, by the budget approved by the

Board of Directors and by the agreed business strategy.


4.2 Professional background and other activities and interests

Urs RiedenerCEO and Chairman of Group Management since 2008

Urs Riedener was an Assistant Brand Manager at Jacobs

Suchard in Neuchâtel from 1992 to 1995 and latterly Group

Brand Manager at Kraft Jacobs Suchard in Zurich. From 1995

to 2000 he held various management positions at Lindt &

Sprüngli, both in Switzerland and abroad, the most recent

of which were National Sales Manager and Member of the

Board of Management, Switzerland. Until 2008 he was Head

of Marketing and Member of the Executive Board of the Mi-

gros Cooperative in Zurich.

Urs Riedener joined Emmi as its CEO in 2008. He also sits on

the committees of the Swiss branded products association

Promarca and the Swiss marketing association GfM.

Robin BarracloughHead of Marketing and member of Group Management

since 2009

From 1991 to 2007, Robin Barraclough performed various

managerial marketing functions at national and international

level at Mars Incorporated, latterly as senior member of the

Marketing Leadership Team at the European Masterfoods

headquarters in Bremen (Germany). In 2008 he was in charge

of the coffee business in German-speaking Europe for Kraft

Foods.

Robin Barraclough joined Emmi Group Management in 2009.

As Head of Marketing he is responsible for the ongoing devel-

opment and marketing of the Emmi product and brand port-

folio both in Switzerland and internationally.

4. Group Management

4.1 Members of Group ManagementThe following table shows the names of the ten members of Emmi Group Management, their country of origin and current function.

Members of Emmi Group

Management Year of birth Country of origin Education Current function

Urs Riedener 1965 Switzerland Business Economist lic.oec. HSGStanford Executive Program, USA

CEO

Robin Barraclough 1967 United Kingdom Economist Head of Marketing

Reto Conrad 1966 Switzerland Business Economist lic.oec. HSGCertified Auditor

CFO

Othmar Dubach 1958 Switzerland Certified Food Engineer ETHMBA

Head of the Cheese Division

Marc Heim 1967 Switzerland Business Economist lic.oec. HSG Head of Sales

Matthias Kunz 1960 Switzerland Certified Agronomics Engineer ETHMBA

Head of the International Division

Robert Muri 1950 Switzerland Certified Engineer HTL Dairy FarmingMBA

Deputy CEO,Head of the Dairy Products Division

Max Peter 1954 Switzerland Certified Engineer HTL Mechanical and Production Engineering

Head of Retail and Supply Chain Management

Natalie Rüedi 1971 Switzerland Certified Primary School TeacherEMBA

Head of Human Resources

Markus Willimann 1956 Switzerland Certified Food Engineer ETHDr. sc. techn. ETH

Head of Industrial Business


activities. In 1993 he became a member of Group Manage-

ment and took on the role of Head of the Cheese Division

with responsibility for production, packaging and maturation

both in Switzerland and internationally.

Marc HeimHead of Sales and member of Group Management

since 2009

Between 1992 and 1999, Marc Heim held various positions

with the former Effems AG (now Mars Schweiz AG) in Zug,

latterly as Senior Product Manager for the Snackfood Division,

specifically for the Balisto brand. From 1999 until 2004, he

was Head of Sales and Marketing and a member of the Board

of Management at Swiss biscuit specialist Kambly SA in Trub-

schachen, where he was responsible for the Swiss market,

export business and marketing. From 2004 to 2009 he was

Managing Director of Halter Bonbons AG.

Marc Heim joined the Emmi Group in 2009 and, as Head of

Sales for Switzerland and internationally, became a member

of Group Management.

Matthias KunzHead of the International Division and member of Group

Management since 2002

Matthias Kunz was head of the department responsible for ex-

ports and economic affairs at what was then known as Central

Switzerland Milk Producers (now known as Swiss Milk Producers,

Reto ConradCFO and member of Group Management since 2006

Reto Conrad worked as a controller for UBS in Basel from 1990

to 1992. From 1992 to 2001 he held various functions in the

auditing department of PricewaterhouseCoopers in Basel and

San Francisco. In 2001 he was appointed CFO of the Bachem

Group, which is headquartered in Bubendorf.

Reto Conrad joined the Emmi Group in 2005 as Head of Group

Controlling, and in 2006 was appointed CFO with responsibil-

ity for the finance and controlling, legal and tax departments,

and became a member of Group Management. Reto Conrad

is also a member of the expert commission of Swiss GAAP FER

(Swiss Accounting and Reporting Recommendations). At

the beginning of 2011 Reto Conrad received from the CFO

Forum Switzerland the CFO of the year award.

Othmar DubachHead of the Cheese Division and member of Group


Othmar Dubach worked as assistant to Prof. Bachmann at the

Institute of Dairy Technology at the Swiss Federal Institute of

Technology Zurich before moving in 1983 to the Central Swit-

zerland Milk Association in Lucerne, where he took over as

Head of Dairy Controlling and Advisory Services. He also took

on additional tasks in the areas of consulting for cooperatives

and cheese factory structures. Othmar Dubach joined the

Emmi Group in 1992 and spent a year heading up marketing

Members of Group Management from left: robin Barraclough, Markus Willimann, Marc Heim, natalie rüedi, reto Conrad, Urs riedener (Ceo), othmar Dubach, robert Muri, Max peter and Matthias Kunz


or SMP) from 1988 to 1992. He then became the proprietor and

Managing Director of Tucano, Inc. Carmel, California before

joining the Western Orient Trading Company, which exports US

agricultural products. In 1997 he took over as Managing Direc-

tor of the newly founded Toni International AG. Following the

merger between Toni and Säntis to form Swiss Dairy Food, he

was appointed Head of the Cheese Division and a member of

Group Management in 1999, and became Managing Director of

Top Cheese Switzerland AG in 2002.

The same year, following the acquisition of Top Cheese Switzer-

land by Emmi, he took over as Head of Emmi’s International

Cheese Division and became a member of Group Management.

Since 2009 he has been responsible for the International Divi-

sion and thus for the ongoing development of Emmi in the in-

ternational markets.

Robert MuriHead of the Dairy Products Division and member of Group

Management since 1996, Deputy CEO since 2007

From 1974 onwards Robert Muri worked in sales for Falag In-

ternational AG in Langenthal and as Head of Quality Control

at Roco Conserven AG in Rorschach. From 1976 to 1980 he

worked in development at International Flavors & Fragrances

I.F.F. AG in Reinach (Aargau). In 1980 he moved to the Central

Switzerland Milk Association in Lucerne as Head of Produc-

tion, going on to become Works Manager.

In 1994 he took over responsibility for marketing and sales in

the Fresh Products Division of the Emmi Group and in 1996

was appointed Head of the Fresh Products Division and a

member of Group Management. The Fresh Products and

Dairy Products Divisions were merged in 2004, with Robert

Muri taking over as Head of the new Dairy Products Division.

In this function he is responsible for the production of fresh

and dairy products both in Switzerland and internationally.

Robert Muri has also been Managing Director of Mittelland

Molkerei AG in Suhr since 2006 and Deputy CEO since 2007.

Max PeterHead of the Retail and Supply Chain Management Division

and member of Group Management since 2002

Max Peter worked as a consultant for the company Zoller from

1977 and subsequently as a project manager for Nestlé in Vevey

from 1980 to 1987. He spent the period from 1987 to 1988 in a

consulting and project management capacity at Suter+Suter AG

in Basel. In 1988 he moved to Coop Schweiz, initially as Head of

the main department of Technical Planning (Logistics & Engi-

neering) and later as Member of Management for Merchandis-

ing/CRS. In 1999 he was appointed CIO and Member of Group

Management for Supply Chain Management of Bon Appétit

Group AG in Volketswil.

In 2002 he joined Emmi as Head of Corporate Development

and became a member of Group Management. In this function

he has been responsible for Retail and Supply Chain Manage-

ment, including IT, since 2005. Max Peter is also a Member of

the Board of Directors of GS 1 Switzerland, Vice-President of

Schweizer Sporthilfe, and a member of the executive council of

Swiss Olympic.

Natalie RüediHead of Human Resources and member of Group


Natalie Rüedi taught at Kriens primary school from 1992 to

2000 and became its headmistress in 1996.

She joined the Emmi Group as an Human Resources specialist

in 2000, going on to take over the enhancement and leader-

ship of staff development in 2004 and being appointed Head

of Human Resources and member of the extended Group

Management in 2009. She has been a member of Group Man-

agement since 2011.

Markus WillimannHead of Industrial Business and member of Group


Dr. Markus Willimann worked from 1982 to 1987 as a tech-

nical assistant at the Swiss Breweries Testing Station. From

1987 to 1990 he worked as a research and development

project manager at Jacobs-Suchard SA. From 1990 to 1998 he

served as business unit head and member of the Executive

Board of UFA AG in Sursee.

In 1998 he joined the Emmi Group as a member of Group

Management and Head of the Dairy Products Division. He

assumed responsibility for Industrial Business, Development

Coordination and Agricultural Policy within Group Manage-

ment in 2004.

Markus Willimann is also Chairman of the Swiss Dairy Indus-

try Association and member of the Board of Directors of the

Swiss Milk Sector Organization (BOM), the Swiss Butter Sector

Organization (BOB) and the Federation of Swiss Food Indus-

tries (fial).

Detailed CVs of the members of Group Management can

be found on the Emmi website at http://group.emmi.ch/en/

about-emmi/corporate-governance/group-management/.

4.3 Management contractsNo management contracts exist.


5. Compensation, participations and loans

5.1 Content and definition process for compensa-tion and share ownership programmes

The remuneration system for the compensation of the Board

of Directors and – with the exception of the Chairman – the

remuneration of members of the Board of Directors is de-

termined by the Board of Directors at the recommendation

of the Committee for Personnel Matters. The remuneration

system for the compensation of Group Management is de-

liberated on and determined by the Committee for Person-

nel Matters. This committee deliberates on and determines

remuneration for the Chairman of the Board of Directors, the

CEO and other members of Group Management. The Chair-

man of the Board of Directors and the CEO are not involved in

determining their own remuneration.

The Committee for Personnel Matters assesses remuneration

in connection with the general Group pay round (fixed com-

ponent) and the company result (variable component). The

Board of Directors is informed at its next meeting as well as by

means of the minutes of the committee meeting convened to

discuss the definition and implementation of remuneration.

External experts are only called upon during the determi-

nation of the remuneration system in the event of a funda-

mental change to the system. At Group Management level,

function-specific benchmarks are used when determining re-

muneration in the event of new appointments or promotions.

The reference market is taken as companies from the “fast

moving consumer goods” industry to which the Emmi Group

also belongs.

The remuneration paid to the Board of Directors comprises a

fixed basic salary only and is thus not related to performance.

The remuneration paid to the members of Group Manage-

ment comprises a fixed component as well as a variable com-

ponent based on business performance and achievement of

individual performance targets, as well as payments in kind

(company car).

Variable remuneration can account for up to one-third of total

remuneration and consists of the following components:

1. Group performance (weighting 40 %)

2. Business area performance (weighting 40 %)

3. Achievement of individual performance targets

(weighting 20 %).

The measurement of business performance is based on the

three pillars of sales, income and market share. For service

areas, the relevant targets also relate to the ongoing devel-

opment of the appropriate area with a view to providing the

core business with even better support. An individual objec-

tive can, for example, be the launch of a product in a key

market, the implementation of a project aimed at enhancing

earnings in a particular product area, or the implementation

of improvement measures in the area of corporate culture.

Share ownership programmes and loans: As is the case else-

where in the Emmi Group, no share or option plans exist for

members of the Board of Directors or members of Group

Management. Furthermore, no loans are granted as a rule.

Remuneration during the year under review is listed on pages

79 and 80 of the Notes to the Financial Statements of Emmi

AG (Holding Company) 2010.

6. Shareholders’ rights of co-determination

6.1 Restrictions on voting rights and proxiesEmmi’s Articles of Association contain no restrictions on vot-

ing rights. A shareholder who has voting rights may only be

represented at the General Meeting by a legal representa-

tive, another shareholder attending the General Meeting who

has voting rights, an officer of the company, an independent

proxy designated by the company or a proxy for shares held in

safekeeping. The Articles of Association can be downloaded

from the Group website at http://group.emmi.ch/en/about-

emmi/corporate-governance/articles-of-association/.

6.2 Statutory quorumUnless the law stipulates otherwise, the General Meeting

passes its resolutions and performs its elections by an ab-

solute majority of the voting rights represented, not taking

into account blank and invalid votes. In addition to the legal

exceptions, the resolution concerning the amendment of the

provision of the Articles of Association relating to the restric-

tions on registration (see Point 2.6 concerning Nominees) also

requires at least two-thirds of voting rights represented and

the absolute majority of shares represented.


6.3 Convening of the General MeetingThe Ordinary General Meeting takes place annually, at the

latest six months after the end of the financial year. It is con-

vened by the Board of Directors. The procedure for convening

Extraordinary General Meetings is governed by the applicable

legal provisions.

6.4 AgendaShareholders who represent shares with a par value of CHF 1

million and above can request that an item be placed on the

agenda at the General Meeting. Requests for an item to be

placed on the agenda must be submitted to the Board of Di-

rectors in writing at least 45 days before the General Meeting,

citing the motions concerned.

6.5 Entries in the share registerThe share register is usually closed ten days prior to the Gen-

eral Meeting. The Board of Directors may approve exceptional

subsequent entries on request. The effective closing date

is published in the invitation to the General Meeting and in

good time in the financial calendar on the Emmi website at

http://group.emmi.ch/english/investor-relations/dates/.

7. Change of control and defensive measures

7.1 Obligatory offerEmmi’s Articles of Association do not include any “opting up”

or “opting out” clauses pursuant to Art. 22 of the Federal Stock

Exchange and Securities Trading Act (SESTA) regarding the

legal obligation to make a takeover bid.

7.2 Change-of-control clausesNo contractual agreements exist either for members of the

Board of Directors or for members of Group Management in

the event of a change in the controlling majority stake.

8. Auditors

8.1 Duration of the mandate and term of the auditor in charges

Auditors PricewaterhouseCoopers, Werftestrasse 3, P.O. Box,

6002 Lucerne, have acted as the statutory auditors for the

Consolidated Financial Statements of the Emmi Group and

the Annual Financial Statements of Emmi AG since its incor-

poration in 1993. At the General Meeting on 12 May 2010,

PricewaterhouseCoopers, Lucerne, were reappointed for a

further period of one year.

Matthias von Moos has been the auditor in charge since the

General Meeting convened in 2009.

8.2 Audit feesThe auditors charged total fees of CHF 915,000 for the 2010

reporting year for the performance of their mandate as statu-

tory auditors (including audit of the Consolidated Financial

Statements).

8.3 Additional feesDuring the year under review, PricewaterhouseCoopers

charged a total of CHF 608,000 for additional services be-

yond the scope of their statutory mandate, i.e. tax, legal and

transaction-related advice. This fee includes CHF 282,000 for

tax advice, CHF 11,000 for legal advice and CHF 315,000 for

advice related to transactions.

8.4 Auditor supervision and control mechanisms in respect of the auditors

The Board of Directors’ Controlling Committee assesses the

performance, invoicing and independence of the external au-

ditors and provides the Board of Directors with corresponding

recommendations. The auditors provide Group Management

and the Committee with regular reports that set out the re-

sults of their work and recommendations. The Committee an-

nually reviews the scope of the external audit, the audit plans

and the relevant procedures, and discusses the audit reports

with the external auditors. The chief auditor attended four

meetings of the Controlling Committee in 2010.


9. Information policy

Investor Relations guidelines: Emmi strives to maintain open

and ongoing communication with shareholders, potential

investors and other stakeholder groups. Emmi’s aim is to

provide rapid, real-time and transparent information about

the company, its strategy and business developments, and

to offer a picture of Emmi’s performance in the past and the

present, as well as its future prospects. This picture is intend-

ed to reflect the assessment of the current situation of the

company by Group Management and the Board of Directors.

Methodology: Emmi publishes an extensive Annual Report

every year that presents operating activities, corporate gover-

nance and financial reporting for the current year drafted and

audited in accordance with Swiss GAAP FER. A half-year report

is also produced.

Furthermore, media releases are published about events

relevant to the share price, such as acquisitions, minority or

majority shareholdings, joint ventures and alliances in accor-

dance with guidelines relating to ad-hoc publicity. Important

announcements, in particular half and full-year results, are ac-

companied by presentations together with press and analyst

conferences, or analyst calls.

Emmi meets during the course of the year with institutional

investors both in Switzerland and abroad, presents its results

on a regular basis, organizes road shows and holds meetings

with individual institutional investors and groups. The main

point of contact for these meetings and presentations is the

Chief Financial Officer, and they focus on Emmi’s financial

results, its strategic orientation and the current initiatives of

the Group.

Emmi uses the Internet in order to ensure rapid, real-time and

consistent distribution of information. The company’s web-

site also offers an electronic information tool that enables

shareholders and other interested parties to add their names

to an electronic distribution list (http://group.emmi.ch/eng-

lish/investor-relations/news-service/).

Media releases and investor information can be accessed via

the following links:

http://group.emmi.ch/en/media/media-releases/2011/

http://group.emmi.ch/en/investor-relations/

Notifications to SIX Exchange Regulation of participations

that exceed the level at which notification becomes obliga-

tory can be found via the following link: http://www.six-ex-

change-regulation.com/obligations/disclosure/major_share-

holders_en.html. No participation amendments leading to

compulsory notification were made at Emmi in 2010.

Contact for Investor Relations:

Emmi Schweiz AG, Investor Relations, Habsburgerstrasse 12,

CH-6002 Lucerne

Tel. 041 227 27 86, e-mail [email protected]

The General Meeting will take place on 5 May 2011. All regis-

tered shareholders receive an invitation to the General Meet-

ing by mail.

The next business results (half-year results 2011) will be pub-

lished on 31 August 2011.

Note on the Emmi links:

Emmi’s website will be renewed in 2011 and the links might

change. However, the CVs and the Articles of Association will

continue to be available in the corporate governance section,

media information in the media section and investor relations

information in the investor relations section.


Switzerland is a land of pas-

tures and therefore ideal for

cattle farming and the associ-

ated dairy industry. A Swiss

cow eats around 100 kg of

grass, 2.5 kg of concentrated

feed (cereals, maize), 200 g

of salt, and drinks around

50 litres of water a day. She

provides an average of 24

litres of milk per day. Convert-

ing grass to milk takes two

to three days*. Swiss milk

production is characterized

by high standards of animal

husbandry. Emmi chooses to

avoid genetically modified

raw materials or feedstuffs

– as do Emmi’s milk suppliers

in the fodder they give their

animals.

*Source: www.swissmilk.ch

From grass to milk to cheese

46 tHe BeSt FroM tHe BeSt

The secret is the caveOf the hundreds of Swiss milk

products in the Emmi range,

we are particularly proud of

our Kaltbach cheese speciali-

ties. Handmade in the tradi-

tional way in Switzerland’s

best village cheese dairies,

the cheeses are carefully

selected before being stored

in the cave to complete their

maturation. The cheeses then

rest for several months in a

sandstone cave in the Canton

of Lucerne, under the watch-

ful eye of cheese experts. The

cave’s natural climate allows

the cheeses to become partic-

ularly aromatic. The charac-

teristic feature of cave ageing

is the dark rind developed

by the cheese. Discovered

by chance in the 1950s, the

sandstone cave is now the

most important secret “ingre-

dient” of Kaltbach cave-aged

cheeses.

47tHe BeSt FroM tHe BeSt

49Financial report

Comments

50 FinancialSituation

ConsolidatedFinancialStatements oftheEmmiGroup

52 ConsolidatedIncomeStatement

53 ConsolidatedBalanceSheet

54 ConsolidatedCashFlowStatement

55 ConsolidatedStatementofShareholders’Equity

56 NotestotheConsolidatedFinancialStatements2010

– PrinciplesofConsolidation

– PrinciplesofValuation

– NotestotheConsolidatedFinancialStatements

73 Auditors’ReportontheConsolidated

FinancialStatements

FinancialStatementsof EmmiAG,Lucerne(HoldingCompany)

74 IncomeStatement

75 BalanceSheet

76 StatementofShareholders’Equity

77 NotestotheFinancialStatements2010

81 ProposedAppropriationofAvailableEarnings

82 Auditors’Report

83 ShareInformation

Contents

50 comments

IncomeStatement

OperatingsectionSalesfor2010exceededexpectationswithayear-on-year

increaseof2.5%.Grossoperatingprofitroseagainbothin

absolutetermsandasapercentageofnetsales.Contribu-

toryfactorsinthissuccessincludedcontinuedeffortsto

extendthevaluechainthroughincreasedown-productionof

intermediates(e.g.fruitbasesforyoghurts)andtheshiftin

therangetowardsproductswithmoreaddedvalue.Atthe

sametime,effortstoreduceoperatingexpensescontinued

unabated.Personnelexpenses,forexample,decreasedby

CHF0.3millionadjustedforacquisitions,withallbusiness

unitsachievingsubstantialproductivitygainscomparedwith

thepreviousyear.Marketingandsellingexpensesincreased

slightlytoCHF2.4million,withtheadvertisingcomponent

increasingmarkedly.ThiscontinuedEmmi’smoveawayfrom

trade-orientedtowardsconsumer-orientedexpenditure.

Energycostincreasesresultedfromaslightincreaseincon-

sumptionandtheconsiderableriseincrudeoilandnatural

gasprices.Theproportionofin-houseserviceswasultimately

extendedinlogisticsandthisproducedfurthersavings.

Overall,thismeanttheEBITDAmargin(earningsbeforeinter-

est,taxes,depreciationandamortization)furtherimproved

from8.0%to8.7%.Asinthepreviousyear,2010alsosaw

largerinvestmentprojectsresultinginanincreaseinordinary

depreciationandamortization,whilewrite-backsofnegative

goodwillcontinuedtofall,fromCHF4.2millionin2009to

CHF1.4millionintheyearunderreview.Thisislargelyattrib-

utabletothenowvirtuallycompleteintegrationofMittelland

MolkereiAG,whilethesignificantlylowerlevelofimpair-

mentsforcertainitemsofpropertyandequipmentwas

anotherpositivefactor.

AtCHF135.8millionor5.1%ofnetsales,earningsbeforein-

terestandtaxes(EBIT)reachedanewrecordvalue.Despite

thedeteriorationinthefinancialresult,robustoperatingper-

formancetranslateddirectlyintoasignificantincreaseinnet

profit.

FinancialresultThedeteriorationinthefinancialresultcomparedwiththe

previousyearwasdueexclusivelytoforeigncurrencyex-

changerates.

Lowinterestratescontinuedtohaveapositiveimpactonthe

interestresultoftheEmmiGroup.Inaddition,asalargepart

oftheinvestmentswerefinancedfromcurrentcashflow,the

useofcreditlinesdidnotneedtobeincreaseduntilthevery

endoftheyear,andthenonlyslightly.Allinall,thesefactors

contrivedtoproducewhatcontinuestobeahighlygratifying

interestresult.Emmiexpectsloominginterest-ratehikescou-

pledwiththependingrefinancingofloanstoresultinslightly

higherinterestchargesgenerallyin2011.

TheSwissfrancincreasedevenfurtherinvalueagainstall

majorforeigncurrenciesin2010.Inadditiontothenega-

tiveeffectonsalesandEBIT,theextremelyunfavourable

exchangeratedevelopmentsattheendoftheyearhitthe

financialresulthardaswell.Unlikeinthepreviousyear,itwas

notpossibletoabsorbtheunexpectedlystrongfluctuations

completelybymakingappropriatehedgingarrangements.

Foreign currency exposure

72.1 % EUR

1.3 % GBP

5.7 % CAD

20.9 % USD

Proportion of the net position of a currency as a % of the total net foreign currency positions

FinancialSituation

51comments

Cash flow Emmi Group

in CHF 000s

-2002006 2007 2008 2009

-150

-100

-50

0

50

100

150

200

250

300

Cash flow from operating activities

Cash flow from investing activities

Free cash flow

Cash flow from financing activities

2010

Taxes2009wasmarkedbyextraordinaryinfluences(tax-rate

reductionswithamajorimpactontheprovisionsfordeferred

taxes)andcorrespondinglylowtaxexpenditurefortheGroup

asawhole.In2010,otherspecialfactors,notablythe

capitalizationoflosscarry-forwardintheUS,hadapositive

effectonthetaxrate.At13.1%(prioryear13.8%),the

Group-widetaxratewasevenslightlybelowtheprevious

year’sfigure.However,inviewoftheexpansionofbusiness

intheUSandthesuccessfulintegrationoftheGroup’s

acquisitionsinparticular,theextremelyhighlocaltaxrates

willleavetheirmarkontheGrouptaxratesoonerorlater.

Emmiexpectstoseethetaxraterisethemediumterm.

Cashflowandfinancing

OperatingcashflowdecreasedbyCHF82.8millionyear-on-

yeartoCHF176.4million.Whilecashflowfromoperating

activitiesagainmadeadecisivecontribution,itwasnotpos-

sible,ashadbeenexpected,toreproducethepreviousyear’s

significantreductioninnetworkingcapital.Thatsaid,ongoing

effortsintheareaofinventorymanagementandthecontrol

ofoutstandingaccountshelpedEmmiexceedbyfaritsfigures

foroperatingcashflowinearlieryears.

In2010,investmentsbytheEmmiGroupinfixedassets

reachedrecordlevels,withseverallargeandprestigiouspro-

jectsbeingbroughttoasuccessfulconclusion.Withaninvest-

mentvolumeofaroundCHF15million,theexpansionofthe

Kaltbachcheese-ageingcaveclearlyhighlightstheimpor-

tanceofthebrand.Withtheexpansionprojectprogressing

instagesfromthesummeronwards,theopeningfestivities

intheautumnmarkedtheofficialendoftheproject.Insum-

mer2010,thenewsprayingtower(investmentvolumeof

CHF13.3million)wascommissionedinDagmersellen,andthe

projecttopreparefruitbasesinEmmen(investmentvolume

ofCHF14.5million)wasalsolargelyready.

TheacquisitionsofFromalpAG,CypressGroveChèvre,Inc.

andCASPLLCwerefurtherprestigiousinvestmentsforthe

EmmiGroup.Aswellasimprovementsinoperatingeffi-

ciencybroughtaboutbytheintegrationoftheproduction

operationsofFromalpAG,alltheseacquisitionsareplayinga

particularlyimportantroleinstrengtheningtheinternational

business.

Someoftheexistingloanagreementswillexpirein2011.

Financialliabilitiesnotcoveredbycontinuingcontractshave

thereforebeenreclassifiedasshort-termfinancialliabilities.

Overall,notwithstandingtheincreasedinvestmentvolume,

netdebtincreasedonlyslightlybyCHF11.2millionor6.2%

toCHF192.3million.Consequently,giventhecashandcash

equivalentsavailableattheendof2010andtheunused

creditlines,theEmmiGroupisideallypositionedformaking

furtherinvestments.Emmiisalsoconfidentthattherefinanc-

ingofloansscheduledfor2011willbebroughttoasuccessful

conclusion.At56.5%(prioryear55.3%),theequityratiowas

ultimatelystrengthenedbythecompany’sgoodresult.The

financingoftheEmmiGroupisasolidbasisforthecompany’s

futuregrowth.

52 consoliDateD Financial statements oF tHe emmi GroUp

Notes 2010 % 2009 %

Totalsalesofproducts 1 2,651,588 2,586,532

Salesofservices 1 32,063 32,720

Net sales 2,683,651 100.0 2,619,252 100.0

Changestoinventoriesofsemi-finishedandfinishedproducts 1,211 – 26,354 1.0

Purchaseofproductsandoutsideservices 1,789,897 66.7 1,740,864 66.4

Gross operating profit 892,543 33.3 852,034 32.6

Company-producedadditionstoplantandequipment 943 – 771 –

Gainsonthedisposaloffixedassets 3,068 0.1 704 –

Personnelexpenses 332,210 12.4 323,970 12.4

Otheroperatingexpenses 2 330,699 12.3 321,238 12.2

Operating expenses 662,909 24.7 645,208 24.6

Earnings before interest, taxes, depreciation and amortization (EBITDA) 233,645 8.7 208,301 8.0

Depreciationoftangibleassets 3 82,330 3.1 90,007 3.4

Amortizationofintangibleassets 3 16,915 0.6 13,495 0.5

Write-backofnegativegoodwill 1,354 0.1 4,204 0.1

Earnings before interest and taxes (EBIT) 135,754 5.1 109,003 4.2

Gainsfromassociatedcompanies 2,690 1,323

Financialresult 4 -18,203 -8,714

Income before taxes 120,241 4.5 101,612 3.9

Extraordinaryincome/expenses 5 – -307

Earnings before taxes (EBT) 120,241 4.5 101,305 3.9

Taxes 6 15,753 14,006

Net profit before minority interests 104,488 3.9 87,299 3.3

Minorityinterests 18,359 11,975

Net profit 86,129 3.2 75,324 2.9

Net profit per share in CHF 7 16.10 14.08

inCHF000s

ConsolidatedIncomeStatement

53consoliDateD Financial statements oF tHe emmi GroUp

ConsolidatedBalanceSheet

assets Notes 31.12.2010 % 31.12.2009 %

Cashandcashequivalents 136,991 122,013

Securities 4,039 4,107

Tradeaccountsreceivable 8 355,601 345,489

Otherreceivables 9 21,521 23,727

Inventories 10 258,727 248,936

Accruedincomeandprepaidexpenses 12,329 8,221

Current assets 789,208 45.7 752,493 45.5

Associatedcompanies 48,700 52,192

Loansandotherreceivables 11 9,651 11,922

Securities 2,848 2,910

Employercontributionreserves 19 1,589 1,589

Deferredtaxassets 6 8,848 2,533

Totalfinancialassets 71,636 71,146

Tangibleassets 12 783,732 753,469

Intangibleassets 13 84,106 77,582

Fixed assets 939,474 54.3 902,197 54.5

Total assets 1,728,682 100.0 1,654,690 100.0

liabilitiesBankoverdrafts 70,373 25,908

Tradeaccountspayable 14 225,929 222,565

Leasingliabilities 318 320

Othercurrentpayables 18,478 27,086

Accruedexpensesanddeferredincome 15 86,279 93,388

Provisions 17 8,225 7,343

Current liabilities 409,602 23.7 376,610 22.8

Bankoverdrafts 16 131,247 149,360

Leasingliabilities 16 2,365 2,564

Loans 16 3,319 5,562

Accruedexpensesanddeferredincome 1,781 2,799

Bond 18 125,000 125,000

Provisions 17 6,388 7,767

Provisionsfordeferredtaxes 17 72,055 69,229

Long-term liabilities 342,155 19.8 362,281 21.9

Liabilities 751,757 43.5 738,891 44.7

Sharecapital 53,498 53,498

Capitalreserves 180,771 180,771

Retainedearnings 608,539 562,662

Shareholders’ equity excl. minority interests 842,808 48.8 796,931 48.1

Minorityinterests 134,117 7.7 118,868 7.2

Shareholders’ equity incl. minority interests 976,925 56.5 915,799 55.3

Total liabilities 1,728,682 100.0 1,654,690 100.0

inCHF000s


2010 2009

Netprofitbeforeminorityinterests 104,488 87,299

Netinterestexpenses 4,168 4,873

Gainsonthedisposaloffixedassets -3,068 -704

Write-backofnegativegoodwill -1,354 -4,204

Otherpositionswithnoimpactonliquidity 9,950 3,022

Depreciation,impairmentsandamortization 99,245 103,502

Gainsfromassociatedcompanies -2,690 -1,323

Changeinprovisions -4,073 -2,507

Taxexpense 15,753 18,379

Cashflowbeforechangesinnetworkingcapital,interestandtaxes 222,419 208,337

Changeininventories -1,434 48,392

Changeintradeaccountsreceivable -20,610 20,706

Changeinotherreceivablesandprepaidexpenses -823 7,886

Changeintradeaccountspayable 3,494 -25,004

Changeinotherpayablesanddeferredincome 3,572 11,608

Interestpaid -5,240 -4,834

Taxespaid -25,006 -7,894

Cash flow from operating activities 176,372 259,197

Investmentintangibleassets -104,983 -72,833

Divestmentoftangibleassets 4,210 2,184

Investmentinsecurities -264 -1,244

Divestmentofsecurities – 114

Investmentinintangibleassets -1,989 -4,706

Divestmentofintangibleassets 260 –

Acquisitionof/capitalincreaseinassociatedcompanies -3,047 -22,062

Acquisitionofequityinterests/businesses(lesscashandcashequivalentsacquired) -49,985 -25,202

Saleofequityinterests/businesses 100 10,500

Repayment/grantofloansreceivable 2,567 495

Dividendsreceived 1,158 550

Interestreceived 824 1,137

Cash flow from investing activities -151,149 -111,067

Paymentfromcapitalincreasebyminorityshareholders 500 –

Changeincurrentfinancialliabilities 48,387 19,036

Changeinlong-termfinancialliabilities -17,908 -143,898

Changeinotherlong-termliabilities -13,702 -13,447

Dividendpaymentstoshareholders -16,049 -13,910

Dividendpaymentstominorityinterests -3,009 -2,600

Cash flow from financing activities -1,781 -154,819

Impactofcurrencytranslation -8,464 -761

Net change in cash and cash equivalents 14,978 -7,450

Cash and cash equivalents at start of period under review 122,013 129,463

Cash and cash equivalents at end of period under review 136,991 122,013

��Transactions with no impact on liquidityIn2009,theGroupacquiredtangibleassetsintheamountofCHF3.0millionviafinanceleases.ThesearerecognizedintangibleassetsunderPlant/equipmentandshownaccordinglyinthestatementoffixedassets(page63).

inCHF000s

ConsolidatedCashFlowStatement


ConsolidatedStatementofShareholders’Equity

Sharecapital

Capitalreserves

(premium)Retainedearnings

Accumulatedexchange

differencesTotalprofit

reserves

Total excl. minority interests

Minorityinterests

Total incl. minority interests

Shareholders’ equity as at 31 Dec. 2008 53,498 180,771 513,793 -11,792 502,001 736,270 98,898 835,168

Changes(acquisitions/disposals) – – – – – – 10,530 10,530

Netprofit – – 75,324 – 75,324 75,324 11,975 87,299

Exchangedifferences – – – -753 -753 -753 65 -688

Dividends – – -13,910 – -13,910 -13,910 -2,600 -16,510


Changes(acquisitions/disposals) – – – – – – -61 -61

Netprofit – – 86,129 – 86,129 86,129 18,359 104,488

Exchangedifferences – – – -24,203 -24,203 -24,203 -40 -24,243

Dividends – – -16,049 – -16,049 -16,049 -3,009 -19,058


5,349,810registeredshareswithaparvalueofCHF10.00wereissuedasat31December2010(asat31December20095,349,810).Theamountofaccumulatednon-distributablereservesstandsatCHF52.9million(prioryearCHF51.7million).Inthepreviousyearthecompanyacquiredandthenalmostimmediatelydisposedof1,000ofitsownshares.Giventhenon-recurringnatureofthistransaction,itisnotreflectedintheStatementofShareholders’Equity.Furtherdetailscanbefoundinsection7oftheNotestotheFinancialStatementsofEmmiAG(page78).

inCHF000s


Principlesofconsolidation

AccountingprinciplesTheconsolidatedfinancialstatementsarebasedonthean-

nualaccountsfortheGroupcompaniesfortheyearending

31December2010,preparedonauniformbasis.TheGroup

preparesitsaccountsincompliancewiththeexistingguide-

linesoftheSwissGAAPFER(SwissAccountingandReporting

Recommendations)usingthehistoricalcostprinciple.

Theconsolidatedfinancialstatementsarethereforebasedon

economicvaluesandpresentatrueandfairviewofthecom-

pany’sassets,financialpositionandresultsofoperations.The

annualfinancialstatementsarepreparedundertheassump-

tionofagoingconcern.

ConsolidatedcompaniesTheconsolidatedfinancialstatementsincludetheannualac-

countsofEmmiAGaswellastheGroupcompaniesinwhich

EmmiAGdirectlyorindirectlyholdsmorethan50%ofthe

votingrightsorhasacontrollinginfluencebycontractual

agreement(controlprinciple).Investmentsof50%wherethe

Groupdoesnotholdsolemanagementcontrol(jointven-

tures)andinvestmentsofbetween20%and49%(associated

companies)areaccountedforusingtheequitymethod.

AccountsorreconciliationsbasedonSwissGAAPFERareused

tocalculateshareholders’equitypershare,exceptwhenthis

Consolidated companies CurrencyCapitalin

thousandsCapital share

31.12.2010Capitalshare

31.12.2009

FromalpAG,Zollikofen Particallyacquiredon1.7.2010 CHF 2,500 58 % –

Swissexport,AktiengesellschaftSchweizerischerKäseexporteure,Bern Partiallyacquiredon1.7.2010 CHF 100 79 % 69%

SwitzerlandCheeseMarketing(USA)Inc.,USA-NewYork Partiallyacquiredon1.7.2010 USD 1 79 % 69%

SwitzerlandCheeseMarketingInc.,CAN-Québec Partiallyacquiredon1.7.2010 CAD 1 79 % 69%

CASPLLC,USA-PennYan(NY) Partiallyacquiredon27.5.2010 USD 2,390 100 % 19%

CypressGroveChèvre,Inc.,USA-Arcata(CA) Acquiredon19.8.2010 USD 202 100 % –

RegioMolkereibeiderBaselAG,Frenkendorf1) Partiallysoldon14.12.2010 CHF 3,000 80 % 100%

EmmiNordicAB,S-Gävle Liquidatedon20.12.2010 – – – 100%

1) EmmiPasticceriaSAwasrenamedtoRegioMolkereibeiderBaselAGandmoveditsheadofficetoFrenkendorf.

Associated companies and joint ventures

SASD.I.P.R.O.L.A.,F-Avignon Acquiredon1.1.2010 EUR 206 25 % –

WhiteHillCheeseCompanyLLC,USA-Shullsburg(WI) Establishedon5.4.2010 USD 1,200 50 % –

SwitzerlandCheeseMarketingAG,Bern Partiallyacquiredon1.7.2010 CHF 290 23 % 18%

involvesdisproportionateexpense.Inthiscase,accounts

basedonequivalentinternationalstandardsareused.Minor-

ityholdingsoflessthan20%arecarriedinthebalancesheet

atacquisitioncostlessanyadjustmentsforimpairmentre-

quiredbygenerallyacceptedaccountingprinciples.Thecon-

solidatedcompaniesarelistedintheNotestotheConsolidat-

edFinancialStatements(Note27).

ConsolidationmethodCapitalhasbeenconsolidatedusingtheAnglo-Saxonpur-

chasemethod.Assetsandliabilitiesaswellasexpensesand

incomeofthefullyconsolidatedcompaniesareincludedin

theirentirety.Minorityholdingsinconsolidatedshareholders’

equityandGroupprofitareshownseparately.

Companiesandbusinessesacquiredduringthecourseofthe

yeararerevaluedontheiracquisitiondateonthebasisofuni-

formgroupprinciplesandconsolidatedasfromthatdate.Any

goodwillornegativegoodwillremainingafterthisrevalua-

tion(thedifferencebetweenthepurchasepriceandthetotal

shareholders’equityreported)isrecognizedunderassetsor

liabilitiesandwrittenoffthroughprofitandlossoveritsuse-

fullifeofgenerallyfiveto20years.Aprovisionintheamount

ofnegativegoodwilliswrittenbackoveramaximumoffive

years.Companiessoldduringtheyearareexcludedfromthe

consolidatedfinancialstatementsfromthedateofsale.

NotestotheConsolidatedFinancialStatements2010

ChangestothegroupofconsolidatedcompaniesThefollowingchangestothegroupofconsolidatedcompaniestookplaceintheyearunderreview.


Translationofforeigncurrencies1)

Financialstatementsofconsolidatedcompaniesinforeign

currenciesaretranslatedasfollows:currentassets,fixedas-

setsandliabilitiesatyear-endrates(rateonbalancesheet

date);shareholders’equityathistoricalrates.Theincome

statementandcashflowstatementaretranslatedattheav-

erageratefortheyear.Anyresultantexchangedifferencesare

recognizedinshareholders’equitywithnoeffectonthein-

comestatement.Theforeigncurrencyitemscontainedinthe

individualfinancialstatementsoftheconsolidatedcompa-

niesaretranslatedasfollows:foreigncurrencytransactionsat

therateonthedateofthetransaction(currentrate);foreign

currencybalancesaretranslatedatyear-endusingtheyear-

endrate(rateonthebalancesheetdate).

Theresultantexchangedifferencesarerecognizedinprofit

andloss.Loansinforeigncurrenciesthatarepartofthenet

investmentinasubsidiaryarerevaluedthroughequity.

Exchangedifferencesresultingfromtherevaluationof

sharesinassociatedcompaniesarealsorecognizedinequity.

DissolutionofinterestrateswapDuetothemarketsituation,Emmidecidedtodissolvean

existinginterestrateswapinJune2009.Astheswapwas

concludedatthesametimeastheissueofthebondon13

September2006andhadthesamematurity(13September

2013),theproceedsfromthedissolutionhavebeenrecog-

nizedasaliabilityandwillbereleasedsystematicallyover

theresidualtermofthebond.Theeffectiveinterestrateon

thebondisthusreducedfrom3.0%to2.1%peryear.

Exceptiontotheprincipleofconsistency(changestoestimates)DuetotheperformanceofEmmiRothUSA,Inc.andinpartic-

ulartheacquisitionofCypressGroveChèvre,Inc.,theexisting

losscarry-forwardsandtemporarydifferencesoftheUScom-

panieswerere-estimatedanditishighlylikelythattheywill

beusedduetoconsolidatedtaxation.Deferredtaxestotalling

CHF4.8millionwerethereforeincludedintheincomestate-

mentin2010(seealsosection6oftheNotestotheConsoli-

datedFinancialStatements).

Debtconsolidation,intercompanysalesandprofitsAllintercompanytransactionsandrelationsbetweenthe

consolidatedcompaniesareoffsetagainsteachotherand

eliminated.

Profitsonintercompanytransactionsareeliminated.

CashflowstatementCashandcashequivalentsformthebasisforthecashflow

statement.

Cashflowfromoperatingactivitiesiscalculatedusingthe

indirectmethod.

Principlesofvaluation

CashandcashequivalentsCashincludescash,balancesinpostalgiroandbankaccounts,

andshort-termtimedepositswitharesidualtermoflessthan

threemonths.Theyarevaluedattheirnominalvalue.

SecuritiesListedsecurities,incl.OTCsecuritieswithamarketprice,are

valuedatthemarketvaluesprevailingonthebalancesheet

date.Unlistedsecuritiesarevaluedatacquisitioncostatthe

most.

1) Currency exchange rates in CHF

IncomestatementAveragerates

BalancesheetRatesonbalancesheetdate

2010 2009 31.12.2010 31.12.2009

1EUR 1.38 1.51 1.25 1.49

1GBP 1.61 1.70 1.46 1.65

1USD 1.04 1.09 0.94 1.04

1CAD 1.01 0.95 0.94 0.99

1SEK – 0.14 – 0.14


TradeaccountsreceivableTheseitemsincludeshort-termreceivableswitharesidual

termofuptooneyeararisingfromordinaryoperatingactivi-

ties.Thesereceivablesarevaluedattheirnominalvalues.Any

valueadjustmentsrequiredbygenerallyacceptedaccounting

principlesaremadeasappropriate.

InventoriesGoodsmanufacturedbythecompanyitselfarevaluedat

productioncost.Anylowermarketvalueistakenintoaccount

(loss-freevaluation).Merchandiseisvaluedusingthelower

ofcostormarketprice.Otherstocksofgoodssuchasraw

materials,packagingmaterials,heatingoil,etc.arevaluedat

thelowerofaveragecostpriceormarketprice.Discountsare

treatedasreductionsinpurchasevalue.

TangibleassetsTangibleassetsarevaluedatpurchasecostlessanydepre-

ciationrequiredbygenerallyacceptedaccountingprinciples.

Company-producedadditionstoplantandequipmentare

onlycapitalizediftheyareclearlyidentifiableandthecosts

reliablydeterminable,andtheybringameasurablebenefitto

thecompanyoverthecourseofseveralyears.

Depreciationischargedonastraightlinebasisovertheeco-

nomiclifeofthefixedasset.Theusefullivesofassetshave

beendeterminedasfollows:

Realestate nodepreciation

Administrativebuildingsandresidentialbuildings 40years

Industrialbuildings,rockcaves 25to40years

Installationsandfittings 15years

Machineryandplant 10to15years

Businessinfrastructure 5to10years

Vehicles 4to7years

Company-producedadditionstoplantandequipment 5years

DuetothelonglifetimeofthenewsprayingtowerinDag-

mersellenthedepreciationperiodformachineryandplantfor

thisinvestmentin2010hasbeensetat30years,whichisan

exceptiontothegenerallyapplicableusefuleconomiclife.

ImpairmentThevalueofnon-currentassetsisassessedonthebalance

sheetdateforsignsofimpairment.Ifthereisevidenceofany

lastingreductioninvalue,therealizablevalueiscalculated

(impairmenttest).Ifthebookvalueexceedstherealizable

value,thedifferenceisrecognizedinprofitandlossviaex-

traordinarydepreciation.

FinancialassetsFinancialassetsincludesecuritiesheldaslong-terminvest-

mentsandlong-termloansaswellasinvestmentsinuncon-

solidatedcompanies.ListedandOTCsecuritiesarevaluedat

thelowerofacquisitionormarketvalueprevailingonthebal-

ancesheetdate.Securitieswithoutamarketvalueandloans

arevaluedatcostlessanyvalueadjustmentsrequiredbygen-

erallyacceptedaccountingprinciples.

IntangibleassetsThisitemincludesEDPsoftware,trademarksandgoodwill

fromacquisitions.Intangibleassetsarecapitalizediftheyare

clearlyidentifiableandthecostsreliablydeterminable,and

theybringameasurablebenefittothecompanyoverthe

courseofseveralyears.Intangibleassetsarevaluedatpur-

chasecostlessanyamortizationrequiredbygenerally

acceptedaccountingprinciples.

Amortizationischargedonastraightlinebasis.Theusefullife

ofEDPsoftwareandtrademarksistwotofiveyears.Good-

willfromacquisitionsisamortizedoverfiveto20years(see

Principlesofconsolidation).Theexpectedusefullifeofother

intangibleassetsisdeterminedonacase-by-casebasis(usu-

allyfivetotenyears).

NegativegoodwillAfterthevaluesoftheindividualnetassetsacquiredhave

beenadjustedandthenecessaryrestructuringprovisions

created,aprovisionintheamountofthenegativegoodwillis

createdandwrittenbackoveramaximumoffiveyears.The

write-backofnegativegoodwilltakesintoaccountthecosts

incurredfortheintegration.

Negativegoodwillisshownundershortorlong-termprovi-

sionsdependingonwhenthewrite-backisscheduled.


ProvisionsAprovisionisapotentialfutureobligationarisingfroman

eventwhichoccursbeforethebalancesheetdateandisof

uncertaintimingandamount,butwhichcanbereliablyesti-

mated.Thisobligationconstitutesaliability.

DeferredtaxesTheaccrualofdeferredincometaxesisbasedonabalance-

sheetorientedapproachandessentiallytakesallfuturein-

cometaxeffectsintoaccount.Thedeferredincometaxto

beaccruedannuallyiscalculatedonthebasisofthefuture

taxratevalidonthebalancesheetdateforthetaxsubjectin

question.

Deferredtaxcreditforlosscarry-forwardsisonlyestablished

totheextenttowhichitislikelythatfutureearningswith

whichlosscarry-forwardscanbeoffsetwillbeavailable.

DerivativefinancialinstrumentsEmmiGroupusesderivativefinancialinstrumentstohedge

itscurrencyandinterestraterisks.Theyareincludedinthe

balancesheetiftheyfulfilthedefinitionofanassetoraliabil-

ity.TheinstrumentsaredisclosedintheNotes(Note21).

Instrumentstohedgefuturecashflowsarenotincludedin

thebalancesheet.TheyaredisclosedintheNotes.

LiabilitiesAllGroupliabilitiesarestatedattheirnominalvalues.

EmployeebenefitplanliabilitiesEmployeesandformeremployeesreceivevariousemployee

benefitsandoldagepensionswhichareprovidedinaccor-

dancewiththelawsofthecountriesinquestion.

AllSwisscompanieswithintheEmmiGrouphaveeithertheir

ownlegallyindependentpensionschemesoraremembers

ofcollectiveoccupationalpensionfoundationsprovidedby

banksorinsurancecompanies,whichdonotcarryriskthem-

selves.Thesepensionschemesarefinancedbyemployerand

employeecontributions.

WithregardtotheapplicationofSwissGAAPFER16“Em-

ployeebenefitobligations”,wereferreaderstonote19inthe

NotestotheConsolidatedFinancialStatements.

NetsalesandrevenuerecognitionNetsalesincludeallgoodsandservicessoldtothirdpar-

tieswhichhavebeeninvoiced.Revenuesaredeemedtohave

beenrealizedondeliveryorprovisionoftheservice.

ResearchanddevelopmentResearchanddevelopmentcostsarefullychargedtothein-

comestatement.Thesecostsareincludedunder“Personnel

expenses”and“Otheroperatingexpenses”.

ContingentliabilitiesContingentliabilitiesarevaluedonthebalancesheetdate.

Ifanoutflowoffundswithoutsimultaneoususableinflowof

fundsislikely,aprovisioniscreated.

60 CONSOLIDATED FINANCIAL STATEMENTS OF THE EMMI GROUP

1 Breakdown of net sales

By product groups and Swiss market/international 2010

Switzerland2009 2010

International2009 2010

Group2009

Milk 234,277 254,746 9,393 288 243,670 255,034

Butter and margarine 288,089 283,566 21 2,577 288,110 286,143

Cream 194,814 197,095 7,121 7,483 201,935 204,578

Dairy products 717,180 735,407 16,535 10,348 733,715 745,755

As % of net sales 36.7 37.8 2.3 1.5 27.3 28.5

Fresh products 369,604 357,701 191,457 206,265 561,061 563,966

As % of net sales 18.9 18.4 26.2 30.6 20.9 21.5

Natural cheese 481,793 480,549 350,340 329,693 832,133 810,242

Processed cheese 64,211 51,114 61,261 57,994 125,472 109,108

Cheese 546,004 531,663 411,601 387,687 957,605 919,350

As % of net sales 28.0 27.4 56.2 57.4 35.7 35.1

Fresh cheese 131,921 134,650 33,153 618 165,074 135,268

As % of net sales 6.8 6.9 4.5 0.1 6.2 5.2

Powder/concentrates 66,518 64,978 20,582 20,477 87,100 85,455

As % of net sales 3.4 3.3 2.8 3.0 3.2 3.3

Other products 93,426 89,404 53,607 47,334 147,033 136,738

Sales of services 27,249 30,288 4,814 2,432 32,063 32,720

Other products and services 120,675 119,692 58,421 49,766 179,096 169,458

As % of net sales 6.2 6.2 8.0 7.4 6.7 6.4

Net sales 1,951,902 1,944,091 731,749 675,161 2,683,651 2,619,252

As % of group net sales 72.7 74.2 27.3 25.8 100.0 100.0

By country group 2010In %

Group 2009In %

Group

Switzerland 1,951,902 72.7 1,944,091 74.2

Europe excluding Switzerland 492,941 18.4 455,943 17.4

North and South America 218,220 8.1 202,365 7.7

Asia/Pacific 20,588 0.8 16,853 0.7

Total 2,683,651 100.0 2,619,252 100.0

2 Other operating expenses2010 2009

Advertising and marketing 107,559 105,131

Occupancy expense, maintenance and repair, leasing 66,916 61,738

Insurance, fees and HGV road tax 11,072 11,655

Energy, operating material and supplies 49,749 48,073

General administrative expense 29,356 27,610

Tools and cylinder costs 3,718 2,370

Transport logistics for outgoing goods 51,513 51,863

Other logistics expenses 8,081 10,430

Other operating costs 2,735 2,368

Total 330,699 321,238

CHF 000s

Notes to Consolidated Financial Statements

61CONSOLIDATED FINANCIAL STATEMENTS OF THE EMMI GROUP

3 Depreciation and amortization2010 2009

Ordinary depreciation of tangible assets 76,598 74,933

Unscheduled depreciation of tangible assets 5,732 15,074

Ordinary amortization of goodwill 5,720 4,691

Unscheduled amortization of goodwill 3,910 –

Ordinary amortization of other intangible assets 5,958 5,572

Unscheduled amortization of other intangible assets 1,327 3,232

Total 99,245 103,502 Unscheduled depreciation of tangible assets relates firstly to impairments of properties which will no longer be in full use in 2011 due to restructuring plans (property in Küssnacht) and secondly to assets which are not utilized according to the original plan. The retirement of assets no longer required by scrapping resulted in a need for unscheduled depreciation in the amount of CHF 2.8 million. In the case of intangible assets, impairments of the goodwill from the acquisition of CASP LLC (CHF 3.9 million, see release of the value adjustment on loans under 4 Financial result) and of IT development costs were recorded.In the previous year, unscheduled depreciation included value adjustments on land reserves in Kirchberg not utilized for operational purposes and on a property in Thun which will prospectively no longer be utilized for operational purposes as well as value adjustments on hardware components that need to be replaced earlier than planned and on a production facility for fresh products in the US. Unscheduled amortization of other intangible assets relates mainly to IT development costs and distribution rights.

4 Financial result2010 2009

Interest income 966 1,087

Other financial income 4,333 532

Total financial income 5,299 1,619

Interest expense 5,134 5,960

Other financial expenses 1,225 5,236

Total financial expenses 6,359 11,196

Financial income -1,060 -9,577

Currency income -17,143 863

Total -18,203 -8,714

Other financial income mainly includes the release of a value adjustment on the loan in respect of CASP LLC, as the associated risks are now covered by the value adjustment on the goodwill (CHF 4.1 million). Other financial expenses includes borrowing costs and bank fees. In the previous year, other financial expenses included the value adjustment on investments in the amount of CHF 1.4 million, as the company was liquidated in 2010. The item also included charges in connection with the release of a financial leasing arrangement in the amount of CHF 0.6 million as well as value adjustments on current asset securities in the amount of CHF 0.9 million.

5 Extraordinary income and expensesIn the previous year, extraordinary expenses included the adjustment of legacies in the US in the amount of CHF 0.3 million.

6 Taxes2010 2009

Current taxes on income and capital 16,022 18,379

Change in deferred taxes -269 -4,373

Total 15,753 14,006

Average tax rate 13.1 % 13.8 %

Deferred taxes are calculated for every company using the actual tax rate applicable. As at 31 December 2010, the weighted average rate was 19.3 % (prior year 18.8 %). In 2010, non-capitalized tax claims from loss carryforwards fell from CHF 9.6 million to CHF 6.0 million. Deferred tax assets include capitalized loss carryforwards amounting to CHF 4.3 million and deferred taxes on temporary differences in the amount of CHF 4.5 million. Accruals for current taxes fell from CHF 22.5 million to CHF 14.4 million compared with the previous year.


7 Profit per share2010 2009

No. of shares on 1.1. 5,349,810 5,349,810

No. of shares on 31.12. 5,349,810 5,349,810

ø No. of shares 5,349,810 5,349,810

Net profit in CHF 86,128,595 75,323,515

Net profit per share 16.10 14.08

8 Trade accounts receivable2010 2009

From third parties 358,386 345,594

From shareholders 1,391 707

From related parties 1) 8,236 8,493

Allowance for doubtful accounts -12,412 -9,305

Total 355,601 345,489

1) Related parties denote associated companies and other related parties.

9 Other receivables2010 2009


From related parties 1) – 15

Total 21,521 23,727


10 Inventories2010 2009

Finished products 69,549 65,118

Merchandise 10,231 8,157

Raw materials, semi-finished products and packaging material 186,254 174,974

Other inventories 2,053 4,356

Allowance for market price adjustments -9,360 -3,669

Total 258,727 248,936

11 Loans and other receivables2010 2009


From related parties 1) 95 4,224

Value adjustments – -4,119

Total 9,651 11,922



12 Tangible assets

Tangible assets 2010 Vacant landReal estate/

propertyPlant/

equipment

Tangible fixed assets under construction

Other tangible assets Total

Purchase value at 1.1.2010 3,922 590,000 1,018,004 38,079 54,063 1,704,068

Reclassification -257 22,393 77,446 -91,345 -8,248 -11

Change in group of consolidated companies 560 28,236 41,337 – 6,482 76,615

Additions 533 19,065 8,580 75,942 863 104,983

Disposals -34 -15,898 -77,361 – -11,206 -104,499

Currency effects -56 -10,352 -9,206 -233 -794 -20,641

As at 31 December 2010 4,668 633,444 1,058,800 22,443 41,160 1,760,515

Accumulated depreciation at 1.1.2010 1,272 244,038 662,801 – 42,488 950,599

Reclassification – 34 7,056 – -7,090 –

Change in group of consolidated companies – 16,073 31,851 – 5,267 53,191

Ordinary depreciation 32 13,960 59,133 – 3,473 76,598

Unscheduled depreciation – 1,955 3,610 – 167 5,732

Disposals – -14,992 -77,262 – -11,103 -103,357

Currency effects -3 -1,409 -4,057 – -511 -5,980

As at 31 December 2010 1,301 259,659 683,132 – 32,691 976,783

Net book value at 31 December 2010 3,367 373,785 375,668 22,443 8,469 783,732

Of which leasing – – 2,604 – – 2,604

The assets are checked on the balance sheet date for signs of impairment losses. Necessary adjustments in value have been recognised according to Swiss GAAP FER 20. These are included under “Unscheduled depreciation”.

Tangible assets 2009 Vacant landReal estate/

propertyPlant/

equipment

Tangible fixed assets under

construction.Other

tangible assets Total

Purchase value at 1.1.2009 507 571,808 941,380 44,231 51,944 1,609,870

Reclassification 3,635 5,445 47,032 -58,030 1,627 -291


Additions 30 7,516 12,760 51,882 3,645 75,833

Disposals -250 -4,191 -16,060 – -4,727 -25,228

Currency effects – -771 -1,122 -4 -37 -1,934

As at 31 December 2009 3,922 590,000 1,018,004 38,079 54,063 1,704,068

Accumulated depreciation at 1.1.2009 – 230,537 582,448 – 41,648 854,633

Reclassification 602 -715 -269 – 313 -69


Ordinary depreciation – 12,674 59,109 – 3,150 74,933

Unscheduled depreciation 860 2,398 11,626 – 190 15,074

Disposals -190 -3,511 -15,790 – -4,257 -23,748

Currency effects – -143 -629 – -22 -794

As at 31 December 2009 1,272 244,038 662,801 – 42,488 950,599

Net book value at 31 December 2009 2,650 345,962 355,203 38,079 11,575 753,469

Of which leasing – – 2,854 – – 2,854

Net book value at 1 January 2009 507 341,271 358,932 44,231 10,296 755,237

Of which leasing – 27,587 – – – 27,587

2010 2009

Fire insurance values 2,033,876 2,002,933


13 Intangible assets

Intangible assets 2010

Licences/ patents/

trademarks Software

Goodwill fully

consolidated

Goodwill equity-

consolidatedOther

goodwillTotal

goodwill

Other intangible

assets Total

Purchase value at 1.1.2010 13,778 35,895 65,120 24,034 21,626 110,780 112 160,565

Reclassification – 11 – – – – – 11

Change in group of consolidated companies – 150 21,724 1,275 – 22,999 – 23,149

Additions 100 1,886 – – – – 3 1,989

Disposals -368 -5,130 – – -4,050 -4,050 – -9,548

Currency effects -147 -220 -1,328 – – -1,328 -19 -1,714

As at 31 December 2010 13,363 32,592 85,516 25,309 17,576 128,401 96 174,452

Accumulated amortization 1.1.2010 12,175 23,360 23,549 3,965 19,857 47,371 77 82,983

Reclassification – – – – – – – –

Change in group of consolidated companies – 37 – – – – – 37

Ordinary amortization 270 5,666 4,141 1,244 335 5,720 22 11,678

Unscheduled amortization 334 993 3,910 – – 3,910 – 5,237

Disposals -237 -4,975 – – -4,050 -4,050 – -9,262

Currency effects -132 -124 -56 – – -56 -15 -327

As at 31 December 2010 12,410 24,957 31,544 5,209 16,142 52,895 84 90,346

Net book value at 31 December 2010 953 7,635 53,972 20,100 1,434 75,506 12 84,106

The assets are checked on the balance sheet date for signs of impairment losses. An impairment test is carried out on larger goodwill items irrespective of this, based on the calculated value in use. This is based on future cash flows for the next five years and the extrapolated values from the sixth year. The figures used are part of the multi-year financial planning approved by Group Management. All intangible assets were acquired. No self-created intangible assets were capitalized.

Intangible assets 2009

Licences/ patents/

trademarks Software

Goodwill fully

consolidated

Goodwill equity-

consolidatedOther

goodwillTotal

goodwill

Other intangible

assets Total

Purchase value at 1.1.2010 13,226 32,160 38,361 21,217 20,626 80,204 113 125,703


Change in group of consolidated companies 245 – 26,759 – – 26,759 – 27,004

Additions 314 4,392 – 2,817 1,000 3,817 – 8,523

Disposals – -923 – – – – – -923

Currency effects -7 -25 – – – – -1 -33

As at 31 December 2009 13,778 35,895 65,120 24,034 21,626 110,780 112 160,565

Accumulated amortization 1.1.2009 10,598 16,903 20,613 2,796 19,271 42,680 55 70,236


Ordinary amortization 360 5,189 2,936 1,169 586 4,691 23 10,263

Unscheduled amortization 1,222 2,010 – – – – – 3,232

Disposals – -801 – – – – – -801

Currency effects -5 -10 – – – – -1 -16

As at 31 December 2009 12,175 23,360 23,549 3,965 19,857 47,371 77 82,983

Net book value at 31 December 2009 1,603 12,535 41,571 20,069 1,769 63,409 35 77,582

Net book value at 1 January 2009 2,628 15,257 17,748 18,421 1,355 37,524 58 55,467


14 Trade accounts payable2010 2009

To third parties 201,078 199,599

To shareholders 20,325 17,565

To related parties 1) 4,526 5,401

Total 225,929 222,565

1) Related parties denotes associated companies and other related parties.

15 Accrued expenses and deferred income2010 2009

Interest 2,690 2,796

Income tax 14,446 22,475

Human Resources 21,976 21,428

Contractual discounts 18,317 22,356

Other 26,201 19,946

To shareholders 28 27

To related parties 1) 2,621 4,360

Total 86,279 93,388

1) Related parties denotes associated companies and other related parties.

Other accrued expenses and deferred income comprise invoices not yet received and relate specifically to reimbursements to customers, contributions to advertising costs, energy and contributions to relevant organizations and associations.

16 Financial liabilities

Long-term financial liabilities 2010Residual terms

2 to 5 yearsResidual terms

over 5 years Total

Of which secured by charges on real

propertyInterest rate

in %

Bank loans 127,611 3,636 131,247 17,879

Leasing 1,275 1,090 2,365 –

Loans from third parties 1,724 555 2,279 –

Loans from shareholders 1,040 – 1,040 –

Total 131,650 5,281 136,931 17,879 0.4-4.7

Long-term bank loans bear interest at actual rates of between 0.40 % and 2.75 %. Financing in the form of mortgages bears interest at rates between 4.10 % and 4.65 %. In accordance with the terms of the credit agreement, the bank loans are linked to financial cove-nants.

Long-term financial liabilities 2009

Bank loans 147,991 1,369 149,360 19,692

Leasing 1,275 1,289 2,564 –

Loans from third parties 4,883 679 5,562 –

Total 154,149 3,337 157,486 19,692 0.7-4.7

Some of the existing loan agreements will expire in 2011. Financial liabilities not covered by continuing contracts have therefore been reclassified as short-term financial liabilities.


17 ProvisionsOngoing

restructuringNegative goodwill

Other provisions Deferred taxes

Total provisions

As at 1 January 2010 492 2,078 12,540 69,229 84,339

Created 1,845 972 3,191 6,694 12,702

Utilized -55 – -3,903 -3,727 -7,685

Released (income statement) – -1,354 -5,130 – -6,484

Change in group of consolidated companies – – 4,484 178 4,662

Currency effects -4 – -543 -319 -866

As at 31 December 2010 2,278 1,696 10,639 72,055 86,668

Of which current provisions 1,695 508 6,022 – 8,225

Long-term provisions 583 1,188 4,617 72,055 78,443

Other provisions include accruals for pending legal matters (CHF 2.1 million), liabilities for staff departures outside Switzerland as required by law (CHF 1.9 million), liabilities to staff (CHF 1.5 million), dismantling costs (CHF 2.8 million) as well as other risks where outflows of funds are likely. In all events, the likelihood of such events occurring has been assessed as being well above 50 %.

As at 1 January 2009 1,424 4,830 7,598 73,389 87,241

Created 493 1,452 6,416 1,628 9,989

Utilized -1,430 – -1,593 -5,756 -8,779

Released (income statement) – -4,204 -1,085 – -5,289

Change in group of consolidated companies – – 1,227 – 1,227

Currency effects 5 – -23 -32 -50

As at 31 December 2009 492 2,078 12,540 69,229 84,339

Of which current provisions 492 1,236 5,615 – 7,343

Long-term provisions – 842 6,925 69,229 76,996

18 Bond

Bond type Bond with reopening option

Nominal amount CHF 125 million

Securities number 2673417/ISIN CH0026734175

Interest rate 3.00 %

Maturity 13 September 2006 to 13 September 2013

Redemption 13 September 2013 at par value


19 Employee benefit schemes

Nominal value ECR

Waiver of usage

Other value adjustments Discount

Balance sheet

Balance sheet

Result from ECR in personnel expenses

Employer contribution reserve (ECR) 31.12.2010 31.12.2010 31.12.2010 31.12.2010 31.12.2010 31.12.2009 2010 2009

Pension schemes without excess/ insufficient cover (domestic) 1,589 – – – 1,589 1,589 – –

Pension schemes with insufficient cover (domestic) – – – – – – – –

Total 1,589 – – – 1,589 1,589 – –

Economic benefit/economic obligation

Excess/insufficient cover as per

Swiss GAAP FER 26

Economic benefit/obligation

for the company

Change vs. prior year or taken to the

income statement in

the FY

Contributions limited

to the period 1)

Pension expenses in personnel expenses

and pension expenses (domestic) 31.12.2010 31.12.2010 31.12.2009 2010 2009

Welfare funds (domestic) 34,464 – – – 40 40 41

Pension schemes without excess/insufficient cover (domestic) – – – – 16,317 16,317 15,895

Pension schemes without excess/insufficient cover (foreign) – – – – 790 790 665

Pension schemes with excess cover (domestic) – – – – – – –

Pension schemes with insufficient cover (domestic) -78 – – – 304 304 369

Total 34,386 – – – 17,451 17,451 16,970

1) Including result from employer contribution reserves or comparable items in connection with pension schemes abroad.

Domestic Foreign Total

Breakdown of pension expenses 2010 2010 2010

Contributions to pension plans at cost to the companies 16,661 790 17,451

Contributions to pension plans from employer contribution reserves – – –

Total contributions 16,661 790 17,451

+/– change in ECR due to asset performance, value adjustments, discounting, etc. – – –

Contributions and change to employer contribution reserves 16,661 790 17,451

Increase in economic benefit to the company due to excess cover – – –

Reduction in economic obligations of the company due to insufficient cover – – –

Total change in economic impact arising from excess/insufficient cover – – –

Pension expenses in personnel expenses for the period 16,661 790 17,451

Domestic Foreign Total

Breakdown of pension expenses 2009 2009 2009

Contributions to pension plans at cost to the companies 16,305 665 16,970

Contributions to pension plans from employer contribution reserves – – –

Total contributions 16,305 665 16,970

+/– change in ECR due to asset performance, value adjustments, discounting, etc. – – –

Contributions and change to employer contribution reserves 16,305 665 16,970

Increase in economic benefit to the company due to excess cover – – –

Reduction in economic obligations of the company due to insufficient cover – – –

Total change in economic impact arising from excess/insufficient cover – – –

Pension expenses in personnel expenses for the period 16,305 665 16,970


20 AcquisitionsThe companies acquired by Emmi in 2010 reported the following main balance sheet items at the time of acquisition.

Fromalp AG CASP LLCCypress Grove

Chèvre, Inc.

Cash and cash equivalents 1,134 – 1,095

Inventories 11,848 109 1,128

Other current assets 8,218 431 1,106

Fixed assets 13,320 10,908 13,806

Current liabilities 9,559 617 880

Non-current liabilities 1,900 3,722 122

Shareholders’ equity 23,061 7,109 16,133

Total assets 34,520 11,448 17,135

With the acquisition of Fromalp AG, the Emmi Group enhanced its international fondue business. There were also synergies in production with existing capacities. In addition, Emmi acquired CASP LLC, the former contract producer of Caffè Latte in the US, and intends to further expand the production of fresh products for the American market. Cypress Grove Chèvre, Inc., which was acquired in the summer of 2010, adds goat’s milk cheese specialities to Emmi’s premium range in the US.

21 Outstanding derivative financial instruments2010 2009

Exchange rate instrumentsChange of value

Positive value

Negative value Purpose

Change of value

Positive value

Negative value Purpose

Foreign currency options – – – – -102 – 102 Hedging

Forward foreign currency transactions 1,887 1,887 – Hedging – – – –

Total assets and liabilities 1,887 1,887 – Hedging -102 – 102 Hedging

Emmi also has options to acquire further shares in associated and other companies in which it holds a minority stake. These options have no financial value for Emmi and cannot be reliably measured. They are therefore not recognized in the balance sheet. The foreign currency transactions are not included in the balance sheet because they are used to hedge future cash flows.

22 Contingent assets and liabilitiesEmmi is currently involved in legal disputes in connection with ordinary operating activities. Although the outcome of the lawsuits cannot be predicted with certainty at present, Emmi assumes that these legal disputes will have no major negative impact on business activity or the financial situation. Expected outgoing payments are provided for accordingly. At the date of the financial statements, the Group had no major contingent assets.

23 Pledged assets and off-balance sheet leasing/rental liabilities

Pledged assets 2010 2009

Charges on real property, nominal values 236,460 221,467

Of which as security for own liabilities 17,879 19,692

Off-balance sheet leasing/rental liabilities

1 to 2 years 20,631 21,820

3 to 5 years 15,820 22,600

over 5 years 31,454 33,539

Total 67,905 77,959


24 Investment obligations and off-balance sheet liabilities2010 2009

Investment obligations in connection with previously concluded agreements 68,914 18,990

Cooperation agreements with suppliers/customers p. m. p. m.

25 Transactions with related partiesBusiness transactions with related parties are based on standard contractual forms and conditions. All transactions are reported in the consolidated financial statements for 2010 and 2009, and consist of deliveries of products and raw materials as well as services to and from related parties.The corresponding net figures for receivables and payables are reported separately in the financial statements (see Notes 8, 9, 11, 14, 15 and 16). Other short-term liabilities also include CHF 2.4 million (previous year CHF 2.4 million) in respect of current contributions for the Emmi Pension Foundation.

Transactions with associated companies 2010 2009

Net sales 45,269 57,210

Purchase of products 42,399 41,269

Occupancy costs 144 204

Income from services 1,163 676

Services costs 1,507 1,612

Financial income 648 821

Financial expenses 529 138

Transactions with shareholders 2010 2009

Net sales 7,116 7,580



Income from services 69 160

Services costs 14 25

Financial income 9 –

Transactions with other related parties 2010 2009

Net sales 2,178 44



Income from services 126 9

Services costs 30 17 Milk purchases from the main shareholder are included in purchase of products under Transactions with shareholders. These are made under customary market conditions. Under Group VAT liability, the Emmi Group is jointly and severally liable for the corresponding liabilities of the Genossenschaft Zentralschweizer Milchproduzenten ZMP and ZMP Invest AG .

Other transactionsThe compensation paid to members of the Board of Directors and Group Management is disclosed in section 5 of the Corporate Governance Report as well as in the Notes to the Financial Statements of Emmi AG, in compliance with Art. 663b bis of the Swiss Code of Obligations. Emmi Pasticceria SA was renamed Regio Molkerei beider Basel AG in 2010 and moved its head office to Frenkendorf. A capital increase was carried out to acquire the facilities of the former Regio Milch beider Basel AG. Emmi AG then sold a 20 % stake to the MIBA Milchverband Nordwestschweiz.


26 Shareholders

Nominal capital 2010 % 2009 %

ZMP Invest AG , Lucerne 1) 28,951 54.1 28,890 54.0

Lombard Odier Darier Hentsch Fund Managers SA, Geneva 3,136 5.9 3,547 6.6

Zentralschweizerischer Milchkäuferverband, Willisau 1) 2,500 4.7 2,500 4.7

MIBA Milchverband der Nordwestschweiz, Basle 1) 1,931 3.6 1,931 3.6

Emmi Wohlfahrtsfonds, Lucerne (welfare foundation) 342 0.6 890 1.7

Other 16,638 31.1 15,740 29.4

Total 53,498 100.0 53,498 100.0

1) ZMP Invest AG, Lucerne, the Zentralschweizerischer Milchkäuferverband, Willisau, and the MIBA Milchverband der Nordwestschweiz, Basle, form a group in the meaning of Art. 20 of the SESTA. The Group owns 62.4 % (prior year 62.3 %) of the total voting rights.

27 Summary of consolidated and associated companies

Consolidated companies Head Office Function Currency

Capital in 000s

31.12.2010Capital share


31.12.2009

Emmi AG Lucerne Holding CHF 53,498 100 % 100 %

Emmi Schweiz AG Lucerne Service CHF 5,700 100 % 100 %

Emmi International AG Lucerne Service CHF 5,000 100 % 100 %

Emmi Frischprodukte AG Lucerne Production CHF 6,000 100 % 100 %

Mittelland Molkerei AG Suhr Prod. and trade CHF 20,000 60 % 60 %

Molkerei Biedermann AG 1) Bischofszell Prod. and trade CHF 1,010 90 % 80 %

Nutrifrais SA Plan-les-Ouates Prod. and trade CHF 4,000 60 % 60 %

Emmi Käse AG Lucerne Prod. and trade CHF 11,400 100 % 100 %

Emmi Milch AG Lucerne Production CHF 4,000 100 % 100 %

Regio Molkerei beider Basel AG 2) Frenkendorf Production CHF 3,000 80 % 100 %

Emmi Butterzentrale AG Lucerne Service CHF 2,000 100 % 100 %

MOPRO Luzern AG Lucerne Service CHF 120 100 % 100 %

Emmi Logistik AG Lucerne Service CHF 2,000 100 % 100 %

Emmi Interfrais SA Küssnacht SZ Trade CHF 1,000 61 % 61 %

Swissexport, Aktiengesellschaft Schweizerischer Käseexporteure Berne Service CHF 100 79 % 69 %

Emmi Fondue AG Langnau i. E. Production CHF 15,000 59 % 59 %

Fromalp AG Zollikofen Prod. and trade CHF 2,500 58 % –

Fromco S.A. Moudon Moudon Production CHF 2,100 60 % 60 %

Lesa Lataria Engiadinaisa SA Bever Production CHF 1,500 80 % 80 %

FDS Fromagerie de Saignelégier SA Saignelégier Production CHF 1,050 86 % 86 %

Baumann Käse AG Zollikofen Trade CHF 100 100 % 100 %

Walter Schmitt AG Märwil Trade CHF 150 100 % 100 %

HOLDING der Schweizerischen Milchproduzenten Münchenbuchsee Service CHF 5,000 64 % 64 %

Emmental AG Exportgesellschaft für Schweizer Käse Münchenbuchsee Prod. and trade CHF 4,000 64 % 64%

Burra AG Zurich Trade CHF 300 100 % 100 %

Emmi Österreich GmbH Nüziders, Austria Trade EUR 2,800 100 % 100 %

Emmi Nordic AB 3) Konstanz, Germany – – – – 100 %1) No minority interests are shown due to the obligation to purchase the remaining 10 %.2) Emmi Pasticceria SA was renamed to Regio Molkerei beider Basel AG and moved its head office to Frenkendorf.3) Emmi Nordic AB was liquidated in 2010.


Emmi Deutschland GmbH Essen, Germany Trade EUR 75 100 % 100 %

Molkerei Biedermann GmbH Konstanz, Germany Trade EUR 25 100 % 100 %

Emmi Lácteos España, S.L.U. Pamplona, Spain Trade EUR 50 100 % 100 %

Emmi France S.A.S. Rungis, France Trade EUR 40 100 % 100 %

SAS Emmi Ambrosi France E.A.F. Nice, France Trade EUR 100 51 % 51 %

Emmental S.r.l. in Liq. Milan, Italy Trade EUR 520 64 % 64 %

Emmi Italia S.p.A. Milan, Italy Trade EUR 500 100 % 100 %

Trentinalatte S.p.A. Rovère della Luna, Italy Production EUR 520 100 % 100 %

Emmi Holding Italia S.r.l. Milan, Italy Holding EUR 1,200 100 % 100 %

Craamer & Co. B.V. Tiel, Netherlands Trade EUR 523 100 % 100 %

Emmi Benelux B.V. Tiel, Netherlands Service EUR 18 100 % 100 %

Emmi Belux SA 4) Brussels, Belgium Trade EUR 500 100 % 100 %

Emmi UK Limited Putney, UK Trade GBP p. m. 100 % 100 %

Emmi Holding (USA), Inc. Wilmington, USA Holding USD 28,000 100 % 100 %

Emmi USA Inc. New York, USA Trade USD 800 100 % 100 %

Emmental Cheese Corp. New York, USA Trade USD 6 100 % 100 %

Zingg + Co. Inc. New York, USA Trade USD 1 100 % 100 %

Switzerland Cheese Marketing (USA) Inc. New York, USA Trade USD 1 79 % 69 %

Switzerland Cheese Marketing Inc. Québec, Canada Trade CAD 1 79 % 69 %

Emmi Canada Inc. Montreal, Canada Trade CAD p. m. 100 % 100 %

Emmi Roth USA, Inc. Monroe, USA Prod. and trade USD 3 100 % 100 %

CASP LLC USA-Penn Yan Production USD 2,390 100 % 19 %

Cypress Grove Chèvre, Inc. USA-Arcata Prod. and trade USD 202 100 % 0 %

Associated companies and joint ventures Head Office Function Currency

Capital in 000s



31.12.2009

Vermo Tiefkühl Pool AG Lucerne Trade CHF 2,500 35 % 35 %

Emmentaler Schaukäserei AG Affoltern i.E. Prod. and trade CHF 4,954 36 % 36 %

BO Butter GmbH Bern Service CHF 500 33 % 33 %

Thurgauische Käse-Reifungs AG Weinfelden Service CHF 2,000 25 % 25 %

FDC Fromagerie de Courgenay SA Courgenay Service CHF 990 25 % 25 %

Cetra Alimentari SA Lugano Trade CHF 250 34 % 34 %

Sbrinz Käse GmbH Sursee Service CHF 180 24 % 24 %

Switzerland Cheese Marketing AG Bern Service CHF 290 23 % 18 %

Kaiku Corporación Alimentaria, S.L. San Sebastián, Spain Prod. and trade EUR 66,000 43 % 43 %

Ambrosi S.p.A. Brescia, Italy Prod. and trade EUR 10,000 25 % 25 %

Carl Fr. Scheer GmbH + Co. KG Willstätt, Germany Trade EUR 500 25 % 25 %

Scheer Verwaltungs u. Beteiligungs GmbH Willstätt, Germany Service EUR 26 25 % 25 %

SAS D.I.P.R.O.L.A. Avignon, France Trade EUR 206 25 % 0 %

Big Red Cheese Company LLC Monroe, USA Trade USD p. m. 50 % 50 %

White Hill Cheese Company LLC Shullsburg, USA Trade USD 1,200 50 % 0 %

Consolidated companies Head Office Function Currency

Capital in 000s



31.12.2009

4) S.A. Haerten & Interimex N.V. was renamed Emmi Belux SA.


28 Risk management and internal controlsGroup Management carried out a company-wide risk assessment in the year under review. As part of a formal process, significant business risks were assessed in group workshops and individual interviews according to the extent of the potential damage and their likelihood of occurrence. The causes of significant risks and measures to manage them were drawn from this assessment. The Board of Directors of Emmi AG approved the risk assessment and is monitoring the implementation of the defined measures by Group Manage-ment. No exceptional risks that went beyond normal limits were detected during the assessment. The process is repeated every year and the following risks were identified, amongst others, as significant risks to the Emmi Group:– Currency risk: The exchange rates for the CHF to the EUR and USD change to Emmi’s disadvantage. If prices for Emmi products in

foreign currencies remain the same, margins drop; if prices change, market share may be lost. Based on a hedging concept, short-term fluctuations/volatility in the Emmi Group are compensated for. In addition, purchases are increasingly made in foreign currencies as a result of the expansion of natural hedging. Furthermore, as part of Emmi’s strategy, expenditure and production in foreign currency areas are expanded through investments and acquisitions.

– Loss of subsidies: The potential abolition of the “Schoggi-Gesetz” (Chocolate Act) or the cheese subsidy will weaken national and international competitiveness. A recognized segmentation of raw materials that is accepted by milk producers should ensure that raw materials continue to be available to the milk and food industry at competitive prices.

– Liberalization of the milk market: Continuing deregulation in Switzerland will lead to new price relationships, with foreign competi-tion increasing in the medium term and reducing the market shares of the Emmi Group. At the same time, there is a risk of price erosion in generic products. The Emmi Group is preparing for full liberalization of the milk market with its strategic objectives. The Group’s associated international expansion was also identified as a further main risk. A consistent focus on the strategy, its imple-mentation and restrictive cost management will minimize this risk for the Emmi Group.

The Emmi Group is exposed to various financial risks through its business activities, including credit, liquidity and other market risks. Credit risks are managed by means of suitable, continual monitoring of day-to-day business and appropriate risk assessment when closing a transaction. Liquidity risk is controlled by means of central cash management, which ensures that the planned liquidity requirement is covered by corresponding finance agreements. Other market risks, such as currency and interest rate risk, are partially hedged using derivative instruments. The non-hedged part is consciously borne as a risk. The currencies which are of particular relevance to the Emmi Group are EUR, USD, CAD and GBP. To ensure that the consolidated financial statements are in accordance with the applicable accounting standards as well as accurate reporting, the Emmi Group has set up effective internal control and manage-ment systems, which are checked regularly. The accounting and valuation includes estimates and assumptions regarding the future. These are based on the knowledge possessed by the respective employees and are regularly examined with a critical eye. Where an item includes a significant risk or a significant fair value adjustment, this is stated accordingly in the notes. However, no risks that could lead to a significant correction to the company’s assets, financial position or results of operations as reported in the annual accounts were identified for the last financial year.

29 Subsequent eventsFrom the balance sheet date until the consolidated financial statements were approved by the Board of Directors on 7 March 2011, no major events occurred which could adversely affect the validity of the annual financial statements for 2010 or which would have to be disclosed here. On 3 January 2011, following approval by the relevant competition authorities, Emmi definitively acquired the Onken yoghurt brand. This is expected to increase sales in the UK and Germany by a total of around CHF 75 million.

73CONSOLIDATED FINANCIAL STATEMENTS OF EMMI GROUP

Auditors’ Report on the Consolidated Financial Statements

74 FINANCIAL STATEMENTS OF EMMI AG, LUCERNE (HOLDING COMPANY)

2010 2009

Income from investments 38,347 24,197

Financial income 20,799 21,510

Other income 6,688 6,197

Total income 65,834 51,904

Personnel expenses 630 830

Financial expense 23,328 5,482

Administration expense 1,047 1,068

Total expenses 25,005 7,380

Ordinary profit before taxes 40,829 44,524

Tax expense 429 1,864

Profit from sale of companies – 1,149

Net profit 40,400 43,809

CHF 000s

Income Statement

75FINANCIAL STATEMENTS OF EMMI AG, LUCERNE (HOLDING COMPANY)

Assets 31.12.2010 % 31.12.2009 %

Cash and cash equivalents 227 185

Securities 261 261

Other receivables from third parties 39 1,243

Other receivables from consolidated companies 120,634 –

Accrued income and prepaid expenses 133 358

Current assets 121,294 14.9 2,047 0.3

Loans to consolidated companies 514,980 588,999

Securities 14 67

Investment in subsidiaries and associates 180,446 180,348

Financial assets 695,440 769,414

Intangible assets p. m. p. m.

Fixed assets 695,440 85.1 769,414 99.7

Total assets 816,734 100.0 771,461 100.0

LiabilitiesShort-term bank overdrafts 40,000 –

Other current liabilities 2,085 2,188

Accrued expenses and deferred income 3,722 9,679

Current liabilities 45,807 5.6 11,867 1.5

Long-term bank overdrafts 120,000 130,000

Long-term loans – 2,000

Accrued expenses and deferred income 1,781 2,799

Bond 125,000 125,000

Long-term liabilities 246,781 30.2 259,799 33.7

Liabilities 292,588 35.8 271,666 35.2

Share capital 53,498 53,498

Legal reserves 189,863 189,863

Free reserves 235,000 200,000

Retained earnings as per 1.1. 5,385 12,625

Net profit 40,400 43,809

Retained earnings as per 31.12. 45,785 56,434

Shareholders’ equity 524,146 64.2 499,795 64.8

Total liabilities 816,734 100.0 771,461 100.0

Balance sheetCHF 000s


Share capitalLegal

reservesFree

reservesAvailable earnings Total

Shareholders’ equity as at 31 December 2006 52,287 182,424 80,000 78,062 392,773

Allocation – – 50,000 -50,000 –

Dividends – – – -13,722 -13,722

Capital increase 1,211 7,439 – – 8,650

Net profit – – – 46,966 46,966


Allocation – – 30,000 -30,000 –

Dividends – – – -13,910 -13,910

Net profit – – – 49,139 49,139


Allocation – – 40,000 -40,000 –

Dividends – – – -13,910 -13,910

Net profit – – – 43,809 43,809


Allocation – – 35,000 -35,000 –

Dividends – – – -16,049 -16,049

Net profit – – – 40,400 40,400


Statement of Shareholders’ EquityCHF 000s


Notes pursuant to Art. 663b ff. Swiss Code of Obligations

1. Exception to the principle of consistency (presentation)

Receivables from Group companiesThe statement of receivables from Group companies was adjusted in 2010 in consideration of economic circumstances. As a result, current accounts have been reclassified from long-term to short-term. In addition, parts of the current accounts that from an economic perspective can be considered as base amounts have also been reclassified as long-term loans. Prior-year figures have not been restated.

2. Summary of consolidated and associated companiesCapital share Capital share

Purpose Capital 31.12.2010 31.12.2009

Emmi Schweiz AG, Lucerne Service 5,700 100 % 100 %

Emmi International AG, Lucerne Service 5,000 100 % 100 %

Emmi Frischprodukte AG, Lucerne Production 6,000 100 % 100 %

Molkerei Biedermann AG, Bischofszell Production and trade 1,010 90 % 80 %

Nutrifrais SA, Plan-les-Ouates Production and trade 4,000 60 % 60 %

Mittelland Molkerei AG, Suhr Production and trade 20,000 60 % 60 %

Emmi Käse AG, Lucerne Production and trade 11,400 100 % 100 %

Emmi Milch AG, Lucerne Production 4,000 100 % 100 %

Emmi Butterzentrale AG, Lucerne Service 2,000 100 % 100 %

Emmi Logistik AG, Lucerne Service 2,000 91 % 91 %

Emmi Fondue AG, Langnau i. E. Production 15,000 49 % 49 %

MOPRO Luzern AG, Lucerne Service 120 100 % 100 %

Emmi Interfrais SA, Küssnacht SZ Trade 1,000 61 % 61 %

Burra AG, Zurich Trade 300 100 % 100 %

Baumann Käse AG, Zollikofen Trade 100 100 % 100 %

Holding der Schweizerischen Milchproduzenten, Münchenbuchsee Service 5,000 64 % 64 %

Fromco S.A. Moudon, Moudon Production 2,100 60 % 60 %

Cetra Alimentari SA, Lugano Trade 250 34 % 34 %

Switzerland Cheese Marketing AG, Berne Service 290 23 % 18 %

Vermo Tiefkühl Pool AG, Lucerne Trade 2,500 35 % 35 %

3. Sureties granted and guarantees in favour of Group companies31.12.2010 31.12.2009

Joint and several liability for loans of Group companies 20,660 20,660

Of which drawn down by Group companies 1,942 1,905

Guarantees for Group companies 1,050 750

Emmi AG has subsidiary liability for outstanding lease liabilities of Burra AG to Zürcher Freilager AG.

4. Subordinated loansLoans to Group companies include subordinated loans amounting to CHF 27.0 million (prior year CHF 32.3 million).

CHF 000s

Notes to the Financial Statements 2010


5. Bond

Bond type Bond with reopening option

Nominal amount CHF 125 million

Securities number 2673417/ISIN CH0026734175

Interest rate 3.00 %

Maturity 13 September 2006 to 13 September 2013

Redemption 13 September 2013 at par value

6. Shareholders

Nominal capital 2010 % 2009 %

ZMP Invest AG, Lucerne 1) 28,951 54.1 28,890 54.0

Lombard Odier Darier Hentsch Fund Managers SA, Geneva 3,136 5.9 3,547 6.6

Zentralschweizerischer Milchkäuferverband, Willisau 1) 2,500 4.7 2,500 4.7

MIBA Milchverband der Nordwestschweiz, Basel 1) 1,931 3.6 1,931 3.6

Emmi Wohlfahrtsfonds, Lucerne (welfare foundation) 342 0.6 890 1.7

Other 16,638 31.1 15,740 29.4

Total 53,498 100.0 53,498 100.0

1) ZMP Invest AG, Lucerne, the Zentralschweizerischer Milchkäuferverband, Willisau, and the MIBA Milchverband der Nordwestschweiz, Basel, from a Group in the sense of Article 20 SESTA. The group owns 62.4 % (prior year 62.3 %) of the total voting rights.

7. Transactions in own sharesThere were no transactions in own shares in the year under review. The following transactions were reported in 2009:

Emmi AG, Lucerne Date Number Price in CHF Value in CHF

Opening balance 01.01.2009 – – –

Purchase of own shares 21.04.2009 1,000 107 106,800

Redemption of own shares 20.05.2009 1,000 107 106,800

Closing balance 31.12.2009 – – –

8. Contingent liabilitiesGroup VAT liability (all Group companies are jointly and severally liable).


9. Compensations and participations of members of the Board of Directors, the Council and Group Management

Board of DirectorsBasic

compensationVariable

compensationNon-cash

benefitsOther

compensationTotal 2010

Total 2009

Konrad Graber, Chairman (since 20 May 2009, previously member) 180 – – – 180 136

Fritz Wyss, Chairman (until 20 May 2009) – – – – – 262

Moritz Erni, Vice-Chairman 53 – – 13 66 68

Dominique Christian Bach, member (since 12 May 2010) 9 – – 3 12 –

Stephan Baer, member 46 – – 1 47 51

Peter Bühlmann, member (until 20 May 2009) – – – – – 21

Joseph Deiss, member 35 – – 11 46 48

Hans Herzog, member 50 – – 12 62 68

Alexander Jost, member (until 12 May 2010) 20 – – 6 26 52

Hanspeter Müller, member 36 – – 10 46 48

Thomas Oehen, member 36 – – 11 47 21

Josef Schmidli, member 33 – – 10 43 45

Total Board of Directors 498 – – 77 575 820

Agricultural Council

Jacques Gygax (until 30 June 2009) – – – – – 1

Albert Rösti 8 – – 1 9 4

Pirmin Furrer (since 1 February 2010) 4 – – 1 5 –

Christophe Eggenschwiler (since 1 February 2010) 4 – – 1 5 –

Total Agricultural Council 16 – – 3 19 5

Group Management

Urs Riedener, CEO 645 296 3 199 1,143 1,077

Other members 2,271 869 29 733 3,902 3,791

Total Group Management 2,916 1,165 32 932 5,045 4,868 NotesBasic and variable compensation is paid exclusively in cash. There are currently no share or option plans within the Emmi Group. The Board of Directors does not receive any variable compensation. The private share of company cars are shown under non-cash benefits, and social security contributions and expenses are included in other compensation. No severance payments were made during the year under review. As at 31 December 2010, the Emmi Group had not granted loans to any current or former members of the Board of Directors or Group Management or to any persons affiliated to the same. Furthermore, no loans were granted during the entire period under review. No compensation was paid to former members of the Board of Directors or Group Management. Equally, no compensa-tions which deviate from standard commercial practice were paid to persons affiliated to current or former members of the Board of Directors or Group Management.


Investment in subsidiaries and associatesAs at 31 December 2010, individual members of the Board of Directors, Agricultural Council and Group Management (including affiliated persons) held the following number of shares in the company.

No. of shares No. of shares

Board of Directors 31.12.2010 31.12.2009

Konrad Graber, Chairman 850 950

Moritz Erni, Vice-Chairman 100 100

Dominique Christian Bach, member (since 12 May 2010) – –

Stephan Baer, member 30,000 30,000

Joseph Deiss, member 100 100

Hans Herzog, member 540 540

Alexander Jost, member (until 12 May 2010) – 490

Hanspeter Müller, member – –

Thomas Oehen, member 380 180

Josef Schmidli, member 74 74

Agricultural Council

Albert Rösti – –

Pirmin Furrer (since 1 February 2010) 50 –

Christophe Eggenschwiler (since 1 February 2010) – –

Group Management

Urs Riedener, CEO – –

Robert Muri, Deputy CEO 100 50

Robin Barraclough, member 120 –

Reto Conrad, member 50 –

Othmar Dubach, member 176 176

Marc Heim, member 100 –

Matthias Kunz, member 27 27

Max Peter, member 100 –

Markus Willimann, member 44 44

The members of the Board of Directors, the Agricultural Council and Group Management own a total of 32,811 shares (prior year 32,731 shares) and thus hold 0.6 % of the voting rights (prior year 0.6 %).

10. Risk managementEmmi carried out a company-wide risk assessment in the last financial year. As part of a formal process, significant business risks were assessed in group workshops and individual interviews according to the extent of the potential damage and their likelihood of occurrence. The causes of significant risks and measures to manage them were drawn from this assessment. The Board of Directors approved the risk assessment and is monitoring the implementation of the defined measures by Group Management. No exceptional risks that went beyond normal limits were detected during the assessment.

Further details on risk management can be found in section 28 of the Notes to the Consolidated Financial Statements (page 72).


Available earnings 31.12.2010 31.12.2009

Available for distribution by the Shareholders’ Meeting prior year 56,434 66,535

Effective distribution of the dividend prior year 16,049 13,910

Allocation to free reserves 35,000 40,000

Carried forward to new account 5,385 12,625

Net profit 40,400 43,809

Available for distribution by the Shareholders’ Meeting 45,785 56,434

Appropriation of available earningsThe Board of Directors proposes that the available earnings be used as follows: distribution of a dividend of CHF 3.40 (prior year CHF 3.00) gross per registered share for the financial year 2010 on 5,349,810 shares entitled to dividends.

Dividends 18,189 16,049

Allocation to free reserves 25,000 35,000

Carried forward to new account 2,596 5,385

Total 45,785 56,434

Proposed Appropriation of Available EarningsCHF 000s


Auditors’ Report

83SHARE INFORMATION

Share Information

Stock exchange information 2010 2009 2008 2007 2006

Share price on 31.12. in CHF 210.00 128.50 99.00 150.00 144.90

Year’s high (end-of-day position) in CHF 225.00 130.00 150.90 172.00 169.80

Year’s low (end-of-day position) in CHF 125.00 100.10 98.00 146.00 120.30

Market capitalization on 31.12. in CHF milion 1,123 687 530 802 758

Ø trading volume units 2,742 2,598 2,393 4,246 5,007

Key share data

Net profit per share in CHF 16.10 14.08 10.98 7.52 10.55

Net profit per share (diluted) in CHF 16.10 14.08 10.98 7.52 10.33

Shareholders’ equity per share in CHF 157.54 148.97 138.34 130.94 127.49

Return on shareholders’ equity 1) in % 7.67 10.96 11.10 5.01 7.28

Distribution in CHF 3.40 3.00 2.60 2.60 2.60

Distribution rate 2) in % 21.12 21.31 23.67 34.60 24.63

Return on dividends 3) in % 1.62 2.33 2.63 1.73 1.791) Profit per share/year-end closing price 2) Distribution per share/net profit per share 3) Distribution per share/year-end closing price

Capital structure on 31.12

Share capital CHF 000s 53,498 53,498 53,498 53,498 52,287

divided into number of registered shares units 5,349,810 5,349,810 5,349,810 5,349,810 5,228,710

Par value per registered share in CHF 10 10 10 10 10

Share ranking for dividends All

Voting rights All registered shareholders have full voting rights

Securities number 1.282.989

ISIN code CH0012829898

Ticker EMMN

Common code 20.592.664

Traded In the SIX Local Caps segment on the SIX Swiss Exchange

Index inclusion SPI, SPI Extra, SPI ex SLI, Swiss All Share Index

0.00

50.00

100.00

150.00

200.00

250.00

04.0

1.10

18.0

1.10

01.0

2.10

15.0

2.10

01.0

3.10

15.0

3.10

29.0

3.10

12.0

4.10

26.0

4.10

10.0

5.10

24.0

5.10

07.0

6.10

21.0

6.10

05.0

7.10

19.0

7.10

02.0

8.10

16.0

8.10

30.0

8.10

13.0

9.10

27.0

9.10

11.1

0.10

25.1

0.10

08.1

1.10

22.1

1.10

06.1

2.10

Pric

e

31.1

2.10

Date

Share price 2010

in CHF

Opening price on 4.1. CHF 129.00

Closing price on 31.12. CHF 210.00

84

Vanilla is the queen of spices. Only a little is required to lift the taste of foodstuffs. The subtle aroma

mesmerizes the senses. Vanilla oil features in numerous perfumes and cosmetics, with good reason.

Only genuine, natural vanilla has the full range of innumerable fragrance components. The delicate

fragrance evokes far-away places. The vanilla pods grow on bushes in exotic countries such as Tahiti

or Madagascar, which is where Emmi sources its vanilla.

THE bEST FROM THE bEST

Mesmerizes the senses

85

Simmered and extractedA delicate ice cream melting on the tongue makes for a moment of perfection. Emmi uses specially

selected vanilla for its extra-creamy Crema di Latte ice cream. Before making the ice cream, the pods

are simmered in cream in the traditional manner. Natural vanilla extract is then added to give the

Crema di Latte an even more intense aroma. Marzipan and rose water contribute further layers

of flavour. The mixture is then frozen to a temperature of minus six degrees Celsius, during which

time it is continuously whipped to incorporate air and make the ice-cream light and fluffy. Finally,

the mixture is frozen for 45 minutes at minus 40 degrees Celsius.

THE bEST FROM THE bEST

86 LOCATIONS

Emmi International

AustriaEmmi Österreich GmbH, Illweg 8, A-6714 Nüziders

Belgium and Luxembourg Emmi Belux SA., Chaussée de la Hulpe 166, Section C, B-1170 Watermael-Boitsfort

CanadaEmmi Canada Inc., 1370 rue Joliot-Curie, Boucherville (Québec), Canada J4B 7L9

Switzerland Cheese Marketing Inc., 1370 rue Joliot-Curie, Boucherville (Québec), Canada J4B 7L9

FranceSAS Ambrosi Emmi France E.A.F., 5 place de l’île de Beauté, F-06300 Nice

GermanyEmmi Deutschland GmbH, Maxstrasse 64, D-45127 Essen

ItalyEmmi Holding Italia S.r.l., Corso Magenta 56, I-20123 Milano

Emmi Italia S.p.A., Corso Magenta 56, I-20123 Milano

Trentinalatte S.p.A., Via dell’Adige Vecchio 15, I-38030 Roverè della Luna (TN)

NetherlandsEmmi Nederland, Zuiderhavenweg 4, NL-4004 JJ Tiel

SpainEmmi Lácteos España, S.L.U., Calle Soto de Aizoain, E-31080 Pamplona

UKEmmi UK Limited, 12 Blades Court, Deodar Road, Putney, London SW15 2NU, Great Britain

USAEmmi Holding (USA), Inc., 100 Dutch Hill Road, Suite 220, Orangeburg, NY 10962, USA

Emmi USA Inc., 100 Dutch Hill Road, Suite 220, Orangeburg, NY 10962, USA

Emmi Roth USA, Inc., 657 Second Street, Monroe, Wisconsin 53566, USA

Switzerland Cheese Marketing (USA) Inc., 100 Dutch Hill Road, Suite 220, Orangeburg, NY 10962, USA

CASP LLC, 105 Horizon Park Drive, Penn Yan,NY 14527, USA

Cypress Grove Chèvre, Inc., 1330 Q Street, ArcataCA 95521, USA

Emmi Switzerland

Lucerne headquarters Emmi, Habsburgerstrasse 12, 6002 Lucerne

DagmersellenEmmi, Stationsstrasse 21, 6252 DagmersellenProduction of powdered milk, fresh cheeseSales to industry

EmmenEmmi, Seetalstrasse 200, 6032 EmmenProduction and development of fresh productsProduction, pre-packaging and development of cheese

KaltbachEmmi, Dorf, 6212 KaltbachProduction of cheese specialitiesKALTBACH cheese-ageing cave

KirchbergEmmi, Winkelweg 4, P.O. Box 545, 3422 KirchbergPre-packaging of cheeseExport

KüssnachtEmmi, Zugerstrasse 60, Fänn, 6403 KüssnachtSupplies to retail and catering trade

LangnauEmmi, Bahnhofstrasse 32, 3550 Langnau i. E.Production of fresh cheese, processed cheese and fondue

OstermundigenEmmi, Milchstrasse 9, 3072 OstermundigenProduction of fresh products and ice cream

SuhrMittelland Molkerei AG, Obertelweg 2, 5034 SuhrProduction of fresh and dairy products

Further Emmi locations

Distribution of cheese specialities:Zollikofen

Frozen warehouse:Kriens

Maturation:Gossau, Landquart, Lucerne, Moudon, St-Imier, Thun, Zollikofen

Packaging:Nüziders (Austria)

Production of cheese:Bever, Landquart, Saignelégier, Sarnen, Stein, various village cheese dairies

Production of fresh products:Bever, Bischofszell, Frenkendorf, Geneva

Production of processed cheese and fondue:Zollikofen

Supply of dairy products to catering trade:Zurich

Emmi can look back on a successful 2010 in which sales and

earnings targets were exceeded. The company generated net

sales of CHF 2,684 million, 27.3 % of which came from interna-

tional sales. Net profit was up 14.3 % to CHF 86.1 million in

2010, while earnings before interest and taxes (EBIT) rose by

24.5 % to CHF 135.8 million, resulting in an EBIT margin of 5.1 %

compared with 4.2 % in the previous year. This success is the

result of a robust corporate strategy applied consistently in

the year under review, one which Emmi is looking to further

establish in the future.

2,335

2006

2,501

2007

2,671

2008

2,619

2009

Net sales

in CHF million

3,000

2,500

2,000

1,500

1,000

500

0

2,684

2010

109.0

4.2

EBIT

in CHF million

140

130

120

110

100

90

80

70

60

502006

5.5

5.0

4.5

4.0

3.5

3.0

2.5

2007 2008 2009 2010

102.1

3.8

62.3

2.5

3.2

74.0

as % of net sales

135.8

5.1

54.0

41.3

58.7

75.3

2.3 1.6

2.2

2.9

Net profit


90

80

70

60

50

40

30

20

10

02006

3.5

3.0

2.5

2.0

1.5

1.0

0.5

2007 2008 2009 2010

86.1

3.2

Net sales by product group 2010

35.7 % Cheese

6.2 % Fresh cheese

3.2 % Powder/concentrates

6.7 % Other products and services

27.3 % Dairy products

20.9 % Fresh products

Amounts in CHF million 2010 2009 2008 2007 2006

Net sales 2,684 2,619 2,671 2,501 2,335

Earnings before interest, taxes, depreciation and amortization (EBITDA) 233.6 208.3 184.4 140.1 140.7

as % of net sales 8.7 8.0 6.8 5.6 6.0

Earnings before interest and taxes (EBIT) 135.8 109.0 102.1 62.3 74.0

as % of net sales 5.1 4.2 3.8 2.5 3.2

Net profit 86.1 75.3 58.7 41.3 54.0

as % of net sales 3.2 2.9 2.2 1.6 2.3

Investment in fixed assets (excl. acquisitions) 107.0 77.5 91.0 84.8 76.8

as % of net sales 4.0 3.0 3.4 3.4 3.3

Headcount (full-time equivalents) as at 31.12. 3,701 3,525 3,373 3,350 3,300

Net sales per employee CHF 000s 725 743 792 747 708

Volume of milk and cream processed in kg million 992 943 963 886 849

31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006

Total assets 1,729 1,655 1,683 1,635 1,531

of which shareholder’s equity incl. minority interests and convertible bonds 977 916 835 784 754

as % of total assets 56.5 55.3 49.6 47.9 49.3

Key figures Emmi GroupContinuing along the road to success

Editing Emmi Group Communications, Lucerne

Concept, Design and productionFarner Consulting AG, Zurich

photographyHarry Burst: page 2, 4, 18, 28, 46, 84Matthias Studer: page 7, 34, 41

translationCLS Communication AG, Basel

printingNeidhart + Schön Group, Zurich

The Emmi 2010 Annual Report is available in German and English.

© Emmi, Lucerne, March 2011

Annual Report 2010

Net sales CHF 2,683.7 million

EBITDA CHF 233.6 million

EBIT CHF 135.8 million

Net profit CHF 86.1 million

Total assets CHF 1,728.7 million

Shareholders’ equity incl. minority interests CHF 976.9 million

Headcount (full-time equivalents) 3,701

Emm

i A

nn

uA

l r

Epo

rt

20

10

EmmiHabsburgerstrasse 12CH-6002 LucerneTelephone +41 41 227 27 27Fax +41 41 227 27 37 [email protected]

Key figures 2010

Emmi Geschäftsbericht 2010

Documents

Transcript of Emmi Geschäftsbericht 2010