Emmi: Growth in Sales in Line with Objectives

Emmi anticipated growth of 5% and a net profit margin of between 2.0% and 2.5% for 2007. In the first half of 2007, Emmi achieved growth of 10.3% and a net profit of CHF 22.7 million, corresponding to a net profit margin of 1.9%.

Emmi's growth in 2007 will be in line with its objectives, both in Switzerland and abroad. In the second half of 2007, various negative developments abroad led to significantly weaker growth in earnings. As these only started to have an impact in the third and fourth quarters, corrective measures will be fully effective in the first quarter of 2008. Emmi therefore anticipates a net profit margin of between 1.5% and 1.7% for 2007:

Because of the large volumes of Emmentaler available on the export markets, sales prices are falling significantly at international level, and in Italy in particular. Italy is the largest market for Emmentaler worldwide and also Emmi's most important export market for Emmentaler. Increases in the price of raw materials can only be passed on in international markets after a delay. In Italy, the producer prices for milk have been increasing dramatically since late summer, but Trentinalatte will only be able to pass on these higher prices to the market from 1 January 2008. Estimates of the international performance of fresh products have generally been too optimistic. High levels of investment spending to boost Emmi’s international market position and the cold, wet summer in Europe mean that earnings from abroad are significantly below expectations.

Optimistic for 2008 From January 2008, prices will also be able to be increased abroad. The overheating seen on the European milk market seems to be cooling down again and the milk price looks set to stabilise at a high level. In addition, the restrictions on volume approved by the Board of the Emmentaler Switzerland organization will likely lead to the price of Emmentaler stabilising at a higher level, including on international markets.

The Board of Directors and the Group Management believe that with its defined international strategy, Emmi is on the right track and will continue to adhere to this strategy. Emmi is currently working on measures to ensure long-term profitability in the international business, with the aim of strengthening earnings power and lowering costs.

Against this backdrop, Emmi anticipates a net profit margin of over 2.0% for 2008.

Conference call Monday, 10 December 2007, 9.30 a.m. Reto Conrad, CFO, and Stephan Wehrle, Investor Relations, will be available on a conference call at 9.30 a.m. to answer any questions. Please dial in around 10 minutes before.

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