DMK 2018 earnings up

By Jim Cornall

- Last updated on GMT

A further outlook on corporate restructuring takes place in mid-June.
A further outlook on corporate restructuring takes place in mid-June.

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DMK Group, the largest German dairy cooperative, said its realignment, which was started in the summer of 2017, is reflected in the stable figures for the past fiscal year.

Based on the preliminary figures, DMK Group’s total revenue in 2018 of €5.6bn ($6.3bn) remained at almost the same level as the previous year (2017: €5.8bn/$6.5bn) and earnings slightly improved, at €30.6m/$34.3m (2017: €29.6m/$33.2m).

Ingo Müller, CEO of the DMK Group, said, “We have completely restructured a complex company with many branches in just two years. Based on this, we are now starting to restructure market development accordingly - price margin before quantity. This is an extremely ambitious plan for a company of our size, where we are fully on target in terms of implementation.”

Müller said DMK is already looking at completed construction sites, but also more areas of activity. Two business units, Private Label and Brand, focussed on ‘added value’ last year. The business unit of Ice Cream, which was loss-making in 2017, should be back in the black in 2019, according to DMK.

DMK Ice Cream expands business collaborations

DMK Ice Cream has also announced it has signed a deal with Bahlsen, a long-established German cakes and biscuits brand, which will also be available as an ice cream for the first time from May 1.

As part of its realignment, the DMK Group is strengthening its brand business in the ice cream sector, concentrating on its work with established collaboration partners in addition to its own Milram brand.

DMK said this has allowed it to open up new market segments in a short space of time.

Marcus-Dominic Hauck, COO of DMK Ice Cream, said, “We are pleased that we were able to convince Bahlsen, one of the most popular German brands, about the strength of our portfolio. This confirms that we’re moving in the right direction.”

Served in a 500 ml tub, Bahlsen ice cream will initially be available at food retailers and then at petrol stations and via home delivery.

The three flavors are: Bahlsen Ohne Gleichen Ice Cream combines crunchy, chocolate-covered waffle pieces with vanilla ice cream and nougat sauce; Bahlsen Ohne Gleichen Strawberry-Yoghurt Ice Cream, with strawberry topping, crispy chocolate-coated waffle pieces and white chocolate flakes; and BahlsenN Messino Ice Cream, with its soft biscuit bits, slivers of whole milk chocolate and orange sorbet.

B2B business

At the start of the year, after a three-year construction period, the business unit of Baby Food commenced activities at the new location in Strückhausen (Lower Saxony) and the supplementary food brand Alete was acquired at the end of March; all start-up measures should be completed in the Baby unit by the end of the year, the company said.

The B2B business unit of Industry faced the big challenge of market volatility in the area of whey and powder in 2018. The International business area focused increasingly on key regions, which should be a key activity in 2019 as well.

Müller added, “With all of these necessary, far-reaching changes and the investments that move us forward in the medium-term and the long-term - you have to have the necessary staying power. And we have just that because of our size.”

Looking ahead

After stabilizing the new organization in six business units, DMK has also been looking ahead.

“We have to continue to think more about the customer. Pure suppliers of products are interchangeable,”​ Müller said.

“Things are happening on the demand side of things, which is where we are able to distinguish ourselves from the competition. And that’s where we have the opportunity to add more value. This is how we want to create a sustainable competitive advantage over competitors who are still really thinking purely in terms of products, which has previously been the norm for the dairy industry.

“We will continue to emotionalize ourselves and our brands and shed the sobriety of the past. It’s going to be a long journey that we’ll have to do quickly, but paths are made by walking.”

The company plans to announce detailed results and release a further outlook on corporate restructuring in connection with the representatives’ assembly, which takes place in mid-June.

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