Industry & Wholesaling
In a difficult environment, M-Industry has continued to strengthen its market position in Switzerland and abroad, with real-term growth up by 3.4%. Although prices have fallen by 1.8%, sales have increased by 1.6% to CHF 5'420 million (previous year CHF 5'333 million). The principal growth driver was the initial consolidation of CCA Angehrn, following the taking over of a majority shareholding in the company on 1 July 2012.
As a result of the takeover of a majority holding in CCA Angehrn and the gains of market share, sales in the bulk consumer business increased substantially to CHF 776 million (2011: CHF 627 million). Business with the Migros Group was impacted by substantial price reductions, and ended 0.5% down on the previous year. Sales in the international business were held at practically the same level, in spite of portfolio adjustments. M-Industry has continued to work hard on its competitiveness, and carried out a number of programmes to reduce costs and increase productivity. At the end of 2012, M-Industry employed 11'079 people (400 more than in 2011). The increase was due to the takeover of CCA Angehrn.
| in CHF million | 2012 | 2011 | Change in % |
| Net revenue from goods and services sold | 5'419.8 | 5'333.2 | 1.6 |
| Other operating income | 46.5 | 45.6 | 2.0 |
| Eliminations | –261.7 | –251.4 | 4.1 |
| Total income | 5'204.6 | 5'127.4 | 1.5 |
| Earnings before financial income, income tax and pension plan effect (EBIT) | 125.8 | 185.7 | –32.3 |
| Segment assets | 2'217.8 | 2'099.0 | |
| Investments in long-term assets | 127.6 | 156.6 | |
| Employees | 11'079 | 10'679 |
Continued strengthening of market position in Switzerland and abroad
M-Industry has managed to strengthen its position in an economically challenging market environment in Switzerland and abroad. While domestic prices came under continued pressure, competition abroad intensified as a result of the weak economy and overcapacities in many markets. Sales increased from CHF 5'333 million to CHF 5'420 million, and after adjustment for price reductions and negative currency effects real-term growth was 3.4%. M-Industry has therefore again won market share.
In the Migros business, M-Industry passed on productivity increases and the currency-related more favourable purchase prices in the form of lower prices. Nevertheless, volume increases were unable to compensate for the general fall in prices, and as a result sales were down by 0.5%. Sales with Denner, Le Shop and migrolino, however, rose substantially by over 15%.
Business with Swiss customers outside the Migros Group increased by 23.9% to CHF 776 million following the takeover of CCA Angehrn and as a result of gains in market share. The market position will be considerably strengthened as a result of the bringing together under one roof of the wholesale delivery and cash and carry businesses, together with industry competence, representing a unique combination on the Swiss market. With comprehensive solutions, the business will continue to develop rapidly, making further growth possible.
In the international business, portfolio adjustments and price increases were put into effect in a very difficult market environment. Despite this, sales remained virtually the same year on year, at CHF 478 million. In the key eurozone countries, portfolio adjustments resulted in a loss of sales. Substantial growth was achieved in other countries, with business in North America growing by well above the average because of the local structures.
Differentiation thanks to innovations
Because of M-Industry’s competence in innovation, Migros was able to consolidate its market position. The successful launch of the «Café Royal» coffee capsules helped to win further market share. New product ranges under the Migros «Farmer» own brand and «Bifidus» were launched in the muesli, yogurt and milk drinks segments. M-Industry is therefore making some important contributions to Migros’ differentiation strategy.
Investments in Switzerland as a centre of industry and in sustainable development
In 2012 M-Industry invested around CHF 130 million in Switzerland as a centre of industry, thereby further increasing its ability to compete. As well as the very latest technologies in the bottling and packaging area, a number of automated systems have been completed in logistics, which combined with Migros’ reusable containers system are leading to improved efficiency and sustainability gains.
Sustainable development in practice
Additional projects have been implemented or launched as part of the «Generation M» sustainable development strategy. In the palm oil sector, the planned conversion was accelerated and substantial quantities raised to a higher, more sustainable standard. In coffee and cocoa procurement, comprehensive sustainable development initiatives have been implemented in partnership with the «UTZ» organisation. In order to achieve the goals of progressive reduction of CO2 emissions and electricity consumption per tonne produced, substantial resources are made available annually in a fund, out of which projects for reducing energy are financed.
Goals and outlook
The market environment, both in the Swiss market and in international business, is likely to remain challenging. Because of the stronger market position, it should be possible to win market share in the Swiss catering services/wholesale businesses. After a phase of consolidation with portfolio adjustments in the international business, the target now is renewed growth. An initial distribution structure is being set up in Hong Kong for the development of the Asian markets. In all of our target markets, the key to success lies in being close to the customer, in value-added concepts, innovations and convincing quality with a good value for money promise. Following these lines of action, M-Industry will continue to build on its success.