Link E-Magazine 01 2023(EN)

CEO RICARDA DEMARMELS

Together we will be stronger

Dear Colleagues

When I started as CFO almost four years ago, I was fascinated by your enthusiasm and passion for Emmi from day one. This unique Emmi culture is also omnipresent in this ‘link’. At its core are the people and how they work together in teams. Our culture of togetherness gives us all the opportunity to develop and contribute our best. Together, we are better and can achieve even more – today and for generations to come.

Recent years have shown us that things don’t always run smoothly. Lots has been called into question: security, peace, price stability, energy. This can be unsettling and stressful. That’s why it’s particularly important to be mindful and take care of yourself and your health. Our culture of togetherness also helps us with this.

Two particularly pleasing examples show that we are taking courageous steps into the future: the new goat’s milk powder plant in the Netherlands and the

success story of Mexideli in Mexico. Both projects are also pioneering in the area of sustainability and demonstrate how we take care of ourselves and our teams, Emmi and the environment. Together, we will be better, stronger and experience the best Emmi moments.

Ricarda Demarmels, CEO

“Our culture of togetherness gives us all the opportunity to develop and contribute our best.”

DEMARMELS

“Shaping our future together”

Ricarda, you already know Emmi very well. Nevertheless, I would like to know how you fared in the first few weeks as CEO and what you focused on. (Laughs) Very good. Together with extraordinary people, I have the privilege of achieving something great: we set standards beyond our industry, make the world more enjoyable with great products and innovative brands, and a better place through our honest and effective sustainability work. It’s a great privilege to enjoy coming to work every day. Our common goal should be for everyone at Emmi to enjoy coming to work, not only to create the best dairy moments, but also to move mountains. For me, this is also part of our responsibility as managers.

I consciously take the time to get to know the Emmi Group from a new perspective and, in particular, to delve deeper into the issues with which I have had less contact until now. Over the past few weeks and months, I have been able to talk to customers, suppliers and many employees and understand what is important and where we have opportunities. I thank them for the opportunity.

Before we look ahead, how satisfied are you with the 2022 financial year?

Ultimately, I see it in a positive light. Things did shake us up a bit in 2022, as we reacted late in many places to the enormous increases in input costs – we were not always sufficiently forward-looking, quick and courageous in our responses. Ultimately, however, we joined forces to halt the downward trend and achieved a respectable overall result thanks to a good second half of the year. And we’ve learnt a lot. I am convinced that we are much stronger today. We need this because, in 2023, we want to close the gap that opened up last year.

You take up your role at a time when significant challenges have to be overcome. What will it take to keep us on track?

In an environment that is challenging for everyone and in which many companies are preoccupied with themselves, having the best teams can really clear the way. And we are such a team. By being close to the market and demonstrating quickly and cooperatively every day that ‘the best dairy moments are Emmi moments,’ we can position ourselves even better for future growth.

What are the most important priorities with which you want to drive Emmi forward?

Together, we want to implement our Strategy 2026 while remaining agile – that means being forward-looking, reacting quickly and courageously to changes and seizing the resulting opportunities. Three issues are particularly important to me. The first is market, market, market. This is our playing field and only here can we win. We focus on consumers and customers, inspire with innovations, continually strengthen our portfolio and thereby create

Ricarda Demarmels believes that our goal should be for us all to enjoy coming to work, so we can create the best dairy moments and be able to ‘move mountains’. In this interview, she reveals how we are writing the next chapter in our success story: achieving our goals with joy, energy and clarity.

CEO RICARDA

“Together with extraordinary people, I have the privilege of achieving something great.”

Ricarda Demarmels, CEO Emmi

better market positions with differentiated concepts and strong brands. Our decentralised business model helps us to keep our finger on the pulse.

The second point?

People and our culture – how we work together –make all the difference. Our culture of togetherness gives us all the opportunity to develop and do our best to help us succeed. Only if everyone contributes their heart and soul will ‘the best dairy moments be Emmi moments, now and in the future’. And last but not least, we need to constantly improve and become more efficient – operational excellence – so that we can invest in the market, in our employees, in working together and in sustainability.

Milk is Emmi’s elixir. What is your relationship to our raw materials?

Our fridge is full of dairy products. We love eating and eating a lot of cheese, and our girls love the new Globi Aktifit and, of course, Pierrot. From a business perspective, I find milk very fascinating. Hardly any other product is so versatile and interpretable: high-quality milk, mostly produced from grassland, is the source of our products, from cheese to yoghurt and innovative milk drinks such as Emmi Caffè Latte to desserts and much more. It is a great sounding board that you can use to implement nutritional trends on the market.

You can feel your enthusiasm, energy and drive. Your work is demanding. How do you relax?

Of course, I spend time with my family; we like to be in the mountains or just spend time together playing. And I pay attention to sleep, what I eat and exercise. In times like these of constant change and fraught with uncertainty, it is important that we not only look at our resilience as a company, but also look after ourselves personally. This is where entrepreneurial resilience starts. Our energy is the energy of our teams and organisations.

Interview Robert Bossart Picture André Scheidegger

Background:

Born in Graubünden in 1979, she is the mother of two girls and lives with her family in central Switzerland. She has been CEO of the Emmi Group since 1 January 2023. Prior to this, the HSG graduate was Chief Financial Officer and a member of Group Management jointly responsible for the strategic and operational development of Emmi. Prior to that, she held management positions at various food, investment and strategy consulting companies, where she supported companies on their path to growth. She works with her mind and heart, with focused action and together with the Emmi teams around the world to ensure the best dairy moments – today and for generations to come.

You can find out more about our Annual Report 2022 on page 15.

“Our culture of togetherness gives us all the opportunity to develop and do our best to help us succeed.”

Ricarda Demarmels, CEO Emmi

’26: EXCELLENT IN WHAT WE DO

Shaping the future with clever interplay

In the last part of our series on Strategy ’26, we get to the heart of the matter: what the core area “Excellent in what we do” stands for and what the four value drivers achieve in everyday life.

Our environment is constantly changing: everything seems to be getting faster and faster, and more and more complex. Never has it been more important than now to find smart solutions to current challenges such as supply bottlenecks, cost pressure or shortages of skilled workers.

Excellence is more than pure cost management

To remain successful in the long term, we must seize our opportunities and help shape Emmi’s transformation with flexibility and agility. “Excellent in what we do” stands above all for excellent, cross-divisional action and leadership, but also for cost-conscious implementation of core business processes. We want to take the lead in four selected topics and initiate development impulses. We call these topics “value drivers” – they ensure that we are at the forefront in terms of employees, resources and processes.

The four value drivers: a portrait

Winning Teams

“Winning Teams is our way of fostering an engaged work culture. In this way, we ensure that the focus is kept on employees and their prospects,” says Natalie Rüedi, Chief Human Resources Officer.

To the point: It is talented people who choose their employers, not the other way around. We are creating a modern, diverse organisation in which we collaborate across departmental and national borders, learn from each other and lead in a contemporary way. Each and every one contributes to a positive employee experience.

Strategy ’26 comprises five core areas.

“Excellent at what we do” stands for the cost-conscious implementation of core business processes, but above all for excellent, cross-divisional action and leadership.

For example: “Keep exploring” – We are continually developing

Exciting career paths and further training serve as inspiration and encouragement for your own path. Fabienne Mafli, an employee at the Suhr laboratory, is a good example of this: from production to the laboratory, change of location and now also a practical trainer.

Generating Profitable Growth

“Generating Profitable Growth is about securing sustainable and profitable organic growth. The interplay between marketing, sales and research and development is critical,” says Marc Heim, Executive Vice President Switzerland.

To the point: Consumer demands are constantly changing – we are at the forefront of shaping them. Getting a new product to the shelves requires firstclass collaboration, from development to sales. In this way, we offer our consumers an extensive and innovative product portfolio.

For example: New vegan cheese alternative from beleaf

The vegan cheese is a prime example of good coordination: oat dairy alternative from Bischofszell, tests in the laboratory and production in Langnau, packaging in Kirchberg, and then off to the supermarket. Nicole Gredig and Moritz Streiff from the project management in Langnau, Switzerland, emphasise: “This is just step one; more innovations will follow.”

Funding the Journey

“Funding the Journey stands for excellent leadership and execution of our core business processes. We achieve this through continuous improvements and digitalisation,” says Kai Könecke, Chief Supply Chain Officer.

To the point: We secure our scope for investment – this is how we finance Emmi’s future. That’s why we continuously scrutinise existing core processes and assess optimisation and savings potential, without losing sight of quality.

For example: Emmi Operational Excellence – living improvement together

Erick Hernandez and Ian Bergman inspire with the EOE mindset at Love & Quiches (EDUSA). After three “gemba sprints”, the team was able to achieve impressive progress in planning, production flow and logistics. This significantly reduced truck loading times and freed up valuable frozen storage space.

Business steering

“With good business steering, we strengthen our ability to execute, anticipate and respond in an uncertain, ever-changing environment,” says Oliver Wasem, Chief Financial Officer a.i.

To the point: A good interplay of strategy, financial management and culture – this is our recipe for success.

Important prerequisites include long-term, stable goals, constant improvement as well as flexible resource allocation.

For example: Capital Management – ensuring the best dairy moments

The CHF 50 million construction of a new cheese dairy in Emmen is one of the most significant investment projects in Emmi’s history. Andreas Pfisterer, Head of Investment Controlling, and Patrick Vielle, Head of Group Engineering, add: “With solid capital management, we ensure that critical success factors, such as a stable financial basis, a precise roadmap and consistent and continuous coordination of all involved business units are in place for such a mega project.”

Funding the Journey : Gemba Sprints have enabled Emmi Dessert USA to make amazing progress in the area of operational excellence.

Text Sybille Lips Pictures zVg

‘A huge growth market’

By commissioning the new powder plant, Emmi aims to gain a foothold in a growing segment in the Netherlands not only with goat’s milk powder but also with other raw materials. Another exciting aspect of “Europe’s most sustainable spraying tower” is the excellent collaboration with Dagmersellen.

Abig step towards the future: in Etten-Leur in the Netherlands, the new powder tower at the location of Emmi subsidiaries Goat Milk Powder (GMP) and Bettinehoeve was commissioned. ‘This will triple our previous capacity,’ says Reto Mattli, Strategic Development Officer Division Europe. Sybren Ewijk, Managing Director of Bettinehoeve, adds: ‘based on our North Stars, the key figures for our long-term success, we expect significant growth in goat’s milk powder. The plant will enable us to achieve the highest quality standards that our customers expect of us for baby food.’

Almost a fifth of the goat’s milk produced annually in the Netherlands will in future be processed by Emmi Nutritional Solutions (see box). ‘The new facility will open up promising segments and enable us to tap into attractive new markets,’ says Robin Barraclough, Head of the business division Europe. The powder business has been merged into a strategic unit, and the product range is being expanded and goes beyond baby nutrition.

Protein powder

‘We are also moving away from pure goat’s milk powder and focusing more broadly on foods that are enriched with protein, for example for older consumers, athletes and vegans,’ says Reto. ‘With the new factory, we are ideally positioned for the powder business, which is a huge growth market,’ says Reto.

Flagship project in the field of sustainability

The new spraying tower is a flagship in terms of sustainability. ‘The plant with a heat pump system for generating heat from electricity instead of gas for a large part of the factory gives us a competitive advantage at a time of high energy prices,’ says Sybren. ‘With this new system, we are able to use the residual heat from our cheese factory across the street for our powder facility.’ The hot air in the spraying tower is currently still produced using gas, ‘but we’ve already thought further, so we can switch to renewable energy,’ says Geri Schatt, Head of Sustainability at the Emmi Group.

Support from Switzerland

Construction began in mid-2021 during the pandemic. ‘It was very difficult at times, but we always believed in it and Martin van Putten did a fantastic job

The excitement about the commisioning is great.

as a project manager,’ says Reto. Another important key to success was the collaboration with the drying team from Dagmersellen, which actively supported the team in Etten-Leur for months.

The networking of Dutch and Swiss specialists in the powder segment is of value to Emmi as a whole. ‘We have created an excellent human and professional foundation for the future,’ enthuses Hans Heer, Head of Liquid/Powder in Dagmersellen. For around three months, one or two members of his team were in the Netherlands. In recent years, Dagmersellen has built numerous extensions and new buildings, which is why it has accumulated a great deal of expertise. ‘We were able to take this backpack of experience to the Netherlands and equip it with new insights.’ The collaboration with the Dutch was great. ‘We were welcomed in a very appreciative and friendly way.’

Perfect team spirit

Five employees from Dagmersellen provided support in Etten-Leur. ‘The entire sixteen-strong drying team made this possible, with those in Switzerland filling in the gaps for those who were absent,’ says Hans. ‘The team spirit was perfect.’ Friendly, unifying, appre -

ciative: this is what Swiss-Dutch collaboration felt like. ‘For me, it was another great experience, which Emmi made possible for me,’ says André Lötscher, Drying Team Leader. Hans adds: ‘we enthusiastically pursued the same goal together. This brought us together and to experience real Emmi moments.’ It is also positive that around 20 new employees have been hired to operate the new facility. ‘They are part of our exciting growth journey,’ says Sybren.

New name: Emmi Nutritional Solutions (ENS) Goat Milk Powder G.V., which consists of a cooperation between goat’s cheese manufacturer Bettinehoeve B.V. and goat’s and sheep’s milk powder distributor AVH dairy trade B.B, merged with AVH and was renamed. The company is now called Emmi Nutritionial Solutions (ENS), subdivided into ENS Niederlande and ENS International. This will enable us to strengthen the powder business and merge it into a single strategic unit.

Text Robert Bossart Fotos zVg

1 The new plant will triple the previous capacity.

2 Experts from Dagmersellen supported the employees on site.

2 The new plant will triple the previous capacity.

The right steps towards a successful, sustainable future

Mexideli imports premium products, especially cheese, for Mexico. It is extremely successful in doing so. With its new headquarters, the Emmi subsidiary has skillfully set the course for innovation and growth. Mexideli is even playing a pioneering role in sustainability.

Things are going very well in Mexico. Since the Mexideli Group was founded in 1988 by Haggai Blich and Yory Salant, Mexideli has set itself the goal of “bringing the best gourmet products in the world to Mexico”. With success: turnover has more than doubled in the last eight years, and the number of employees grew 45% to some 350. Here’s a quote from Yory Salant, MD of Mexideli –

“I am very happy with our development. The success is here because we focus all our energy on giving the best service to our customers and also thanks to our dedicated employees, quality products and nice cooperation with Emmi”.

Products from all over the world

In fact, Mexideli is now the number one Import Gourmet cheese company in Mexico and its subsidiary, Comalca Gourmet, is the leading food service company in the Cancun touristic region. Comalca was founded in 1997 by Jose Maria Alfor, Gerardo Cardenas and Mexideli. Jose Maria Alfor, MD of Comalca, says “Comalca is known today as the most important Refrigerated and Frozen Gourmet products supplier in the Cancun area”.

Mexideli imports high-quality food from Europe, Asia, South and North America, Africa and Oceania. Over 50 per cent of this is cheese – including Emmi brands, of course, but also fish and meat, desserts, fruit juice and other premium products. Jose Luis Botello, CFO and Manager in charge of the Import Process, says “every week Mexideli imports many containers that enter Mexico through 7 different ports of entry”. This is a huge operational challenge but if you do it right, as Mexideli does, you have a solid base to give a good service to your customers “.

The company has five distribution centers: the new center in Mexico City, Cancun, Monterrey, Guadalajara, and Mérida. In addition, there are three food processing plants; one in the north of Mexico City

The new warehous with headquarter’ office opened two years ago.

region where Fish is processed and packaged, the second one at the headquarters where cheese is processed and packaged and the third one which is small in the Cancun area. The big wheels, such as Emmi’s 90-kilogram Emmentaler, are cut into wedges of different sizes and packaged. “These food processing plants are very important because the products are prepared exactly as the customers want them,” says Gerardo A Cardenas, Deputy MD and Commercial Director of Mexideli.

Comprehensive service

Mexideli delivers its products to leading retailers, Food Service Operators and Wholesale Clubs throughout Mexico. The important thing is the total service: the import of high-quality branded products, reliable and punctual deliveries and good service in the stores. Numerous in-store demos and sampling take place and Mexideli advises local vendors on how to present and sell the products.

But the company’s strength also lies in its culture. “We have many long-term employees with great experience,” says Yory Salant. Interaction is respectful and the employer is reliable – this is a good basis for trust and the involvement of the Emmi Group is positive. “Emmi also creates trust and reliability with its good reputation, which is very helpful,” says Thierry Trottereau, Deputy EVP Americas for LATAM in the Americas Division.

Development opportunities through new headquarters

One milestone is the new warehouse with headquarters’ offices in Mexico City, which opened 2 years ago. “Before, there were six different locations in the city,

which was not optimal” says Yory. It is also important that now the cheese packaging has been modernized and enlarged. With the new building, Mexideli has a total of 70,900 cubic meters of cooling space and is thus equipped for future growth. Emmi provided valuable support in planning and implementation with its know-how from various experts.

Milestone in sustainability

A major success can certainly be seen in sustainability. The cooling system works with a CO₂-based coolant, which means that environmentally harmful coolants could be dispensed with. The system runs very efficiently with minimal energy consumption. In addition, heat exchangers ensure that all energy for hot water, heating, etc. can be saved. This saves the company 1600 tons of CO₂ annually. “Mexideli is very innovative and follows exactly the path towards our net zero ambition,” says Geri Schatt, Head of Sustainability at the Emmi Group.

Text Robert Bossart Pictures zVg

Managing Director Yory Salant (on the right) and Thierry Trottereau, Deputy EVP for Americas for LATAM work together closely.

Product presentations in the shops are part of Mexideli’s good service.

How sustainable is our milk?

Milk is our most important raw material. That’s why we want to process only sustainable milk worldwide by 2027. We explain what that means and how we approach it here.

Making sustainable milk the norm – an ambitious goal that is unique in the dairy industry. While many companies highlight individual sustainability topics such as emissions or animal welfare, we take a holistic view of sustainability.

A catalogue of criteria as a basis

What is sustainable milk? Together with experts such as the WWF, we have developed a list of criteria for this purpose, which evaluates eight aspects of sustainable milk (see box). The valuation is adapted to the conditions in the respective countries. In Tunisia, for example, where there are no pastures, sustainable feed (animal welfare aspect) is defined differently than in Switzerland.

Chile as a pilot

We started with Quillayes Surlat in Chile. We collected data on the eight aspects from 34 farms that

produce 80% of the milk. The results showed that the areas of income and work, milk quality and the environment are already at a good level. Energy and materials, climate and biodiversity, on the other hand, are not.

The following objectives have now been defined: improve waste management and animal welfare and reduce the use of antibiotics.

One major challenge is that we receive this data from all companies. Not everyone works so closely and sustainably with their milk suppliers. Each subsidiary must therefore be considered on its own merits.

Progress in the divisions

Almost half of the milk at Emmi companies worldwide processes label milk. In other words, milk that goes beyond conventional milk in at least one sustainability aspect.

SUSTAINABLE DAIRY FARMING

All companies have set themselves qualitative targets. Here is a selection of the status relevant to each one:

Laticínios Porto Alegre, Brazil:

The company has created an in-house standard, according to which around 10% of its farmers produce. In addition, LPA is working on a greenhouse gas reduction pathway.

Vitalait, Tunisia

With its own foundation, Vitalait supports the working conditions and incomes of dairy farmers in rural areas. This commitment is to be expanded further with the support of Swiss official development assistance.

Kaiku, Spain

In 2021, Kaiku established a starting point for sustainable milk. In total, the farmers score 66% of the possible points. Topics to be optimised include climate, biodiversity, materials and energy.

Emmi Roth, USA

The company is now including sustainability criteria in its tender for dairy cooperatives. Emmi Roth is also supporting a research project on healthy soil. The company also wants to assess the baseline situation and set quantitative targets to reduce emissions and water by 2023.

Glaserne Molkerei, Germany

The successful pilot of the biodiversity initiative is leading to the roll-out of support measures for more biodiversity and healthier soils to more and more farmers (12 in 2023).

Achieving success together

Only by working together with our partners and suppliers can we make a difference in the dairy industry. This is ensured by the internal focus issue group ‘Sustainable Milk,’ consisting of 15 people from all divisions. In January, for example, we visited our Spanish subsidiary Kaiku in Switzerland with a delegation of farmers, politicians and researchers. They wanted to learn more about the pioneering Swiss project “KlimaStaR” and start a similar project.

Text

Eight aspects of sustainable milk

Laura Jakobeit/Ladina Guggiari Pictures André Scheidegger

We also want to produce milk sustainably in the produce milk sustainably.

“You steered us towards our course of success”

Konrad Graber will conduct the General Meeting for the last time as Chairman of the Board of Directors on 13 April. He is largely responsible for the successful development of the Emmi Group during this period to the present day. Vice President Thomas Grüter praises Koni as a prudent and forward-looking strategist.

“Dear Koni, let’s start with this: it is simply unbelievable how well Emmi has developed during your time, an impressive success story! As Vice Chairman and on behalf of all the members of the Board of Directors, I would like to thank you for everything you have done. Let’s look back on your very successful time, in various positions as an Emmi employee.

You were elected to the Board of Directors in 2006, and have also been a successful business economist and certified auditor. With your election to the Council of States (2007) in the Swiss Parliament, you achieved a major political goal and earned a high level of respect and recognition for your human, professional and political skills.

This was also confirmed by your election as Chairman of the Board of Directors of Emmi AG, succeeding Fritz Wyss in 2009. As a level-headed, forward-looking and gifted speaker who was always clear in his statements, you have strategically expanded Emmi, together with us colleagues on the Board of Directors, and steered us towards our course of success.

Over the years, together with Urs Riedener, you have been able to build up a highly committed Group Management and have contributed to operational success. The personnel evaluations planned in detail and the achievement of the 4 billion sales mark with over 9,000 employees are all milestones from your long time at Emmi. Thank you, Koni, for all your hard work over the years.”

Konrad Graber, Emmi Group Chairman of the Board of Directors

Konrad Graber was voted onto the Board of Directors of Emmi in 2006. In 2009, he took over the office of Chairman and is now stepping down. During his 14-year chairmanship, Emmi expanded its national and international business with around 30 acquisitions. Net sales rose from just over CHF 2.5 billion to over CHF 4 billion, and the number of employees increased from around 3,300 to over 9,000.

Thomas Grüter

Vice-Chairman of the Board of Directors at Emmi

Emmi grows and proves robust

Emmi generated net sales of CHF 4,230.0 million in 2022. We see the broad-based organic growth of 7% as confirmation that our business model is robust and that our strategy is working with a focus on attractive markets, niches and innovative brands. The international business, our strategic niches and brands, such as Emmi Caffè Latte once again, as well as our business in Switzerland all contributed in particular to the positive sales performance.

Step-by-step progress

At the same time, we made further progress in portfolio transformation with the seamless integration of Athenos’

Feta range in the key US market. We have also taken a major step forward in the area of sustainability. We reduced our own greenhouse gas emissions by 10% compared to the previous year thanks to the use of additional renewable electricity and the commissioning of other alternative energy sources, such as the pioneering solar thermal plant in Langnau. The “KlimaStaR Milch” resource project in Switzerland, which we co-initiated, has also got off to a good start.

Our efforts have paid off

We have responded with great commitment to market challenges such as significantly higher energy and raw

material costs. We have implemented many initiatives, both large and small, to improve efficiency, contain cost increases and responsibly increase sales prices. This allowed us to fight back in the second half of the year after a difficult start to the year and achieve a respectable overall result. CEO Ricarda Demarmels is satisfied: “a big thank you goes to all our teams – we fought back with our heads and hearts after a difficult first half of the year.”

Text Simone Burgener

Stop cyber criminals in

Digital crime is booming and is responsible for losses in the billions. Alongside technical measures, we humans also play a key role in our defenses. A few simple rules can help to protect you and our business against cyber attacks.

Become a Cyber Resiliance Hero: emmi.com/crc

Emmi breaks the CHF 4 billion sales threshold in 2022 and achieves a respectable overall result. We were able to achieve this thanks to our strong brands and market positions, but also thanks to the courage and dedication of our employees.

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