Muller UK & Ireland reports 2019 sales and profit drop

02-Dec-2020 - Last updated on 02-Dec-2020 at 13:55 GMT

Muller UK & Ireland produces a host of brands sold in top supermarkets, from Muller Corner to Frijj

Related tags Dairy Finance

Dairy product giant Muller UK & Ireland Group has reported sales and profit down in full-year results as inflation raised costs and it continued a hefty investment programme, but it claimed some victories.

The company recorded an operating loss before amortisation and impairment of £65.6m in its results for the year to 31 December 2019, just filed on Companies House, up from £17.3m in the previous year. A drop in sales from £1.93bn to £1.9bn was also recorded.

Muller UK & Ireland, which is shortlisted for the Chilled, Fresh & Dairy Manufacturing Company of the Year Award in the Food Manufacture Excellence Awards, acknowledged the results concerned the period before the COVID-19 pandemic hit the UK market. However, it said it had contingency plans in place and its controlling entity Unternehmangruppe Theo Muller, based in Germany had pledged financial support to enable it to weather any impacts.

Indeed, initial indications from 2020 were that in the eight weeks to 18 April, volume sales for its Muller Corner brand had seen a strong double digit increase.

Muller Yogurt & Desserts

However, in the 2019 report, commenting on its Muller Yogurt & Desserts division, Muller UK & Ireland stated: "The cost structure inflation that started with Brexit in 2016 continued into 2019 with significant year-on-year inflation hitting the bottom line from milk, cream, skim concentrate, packaging, PRNs, energy, logistics and personnel."

Overall volumes remained stable in a declining market. Its Muller Corner brand and split pots business, including its Bliss brand, posted volume share growth for the second year in a row. The Mullerlight brand 'had a more challenging year', but had retained its position as number one yoghurt brand with 'the highest household penetration in the UK market', the company claimed.

It continued to invest in the manufacturing reliability improvement programme at its Market Drayton site and executed product quality improvements, upgrading the recipes and packaging of Muller Corner and Mullerlight brands.

Muller Milk and Ingredients

Referring to its Muller Milk and Ingredients (MMI) division, actions were taken across the business to reorganise operations into a more efficient structure. Its Foston Dairy ceased operations on 21 October 2019. It also created a new division, Muller Milk and Ingredients Distribution, encompassing the MMI delivery network. The division is coordinating with the Culina Group, Muller's logistics business, to identify efficiencies and synergies in the deliver network. During the year £61.8m of one-off costs were incurred, of which £47m related to impairment charges in relation to reorganisations.

Muller UK & Ireland also stated: "Offsetting the improvements in 2019, the business suffered from a continuing decline in cream markets and cost inflations in packaging, fuel, energy and PRNs. The board expect the improvement programme to continue with the benefits delivering significant advances to the MMI EBIT [profit before interest and taxes] in 2020."

Muller UK & Ireland produces a host of brands sold in top supermarkets, from Muller Corner to Frijj.