Lactalis, the world's largest dairy producer, said its sales had risen by 4.3% to €29.5 billion ($31.51 billion) in 2023, but its net profit margin remained low as inflation pressured consumers purchasing power.
Lactalis, privately controlled by the Besnier family, said its net profit stood at €428 million last year, compared to €384 million in 2022, with a net profit margin of 1.45% of sales in 2023, slightly higher than 1.36% of turnover in 2022 but well below the 2.0% recorded in 2021.
"In a year 2023 marked by inflation, its consequences on purchasing power and unfavourable international prices, the group's profitability remained low. Nevertheless, in this difficult context, the Lactalis teams have maintained the course of profitable and responsible growth," Lactalis chairperson Emannuel Besnier said in a statement.
Consumer Behaviour
The change in consumers' behaviour last year led to a drop in sales volumes and a particular appetite for distributor brands, to the detriment of national brands, especially in Europe, Lactalis said.
The group invested more than €920 million to develop new products, modernise its dairies and cheese factories in France and North America and reduce its environmental impact, it said.
Lactalis' main markets are France, the United States and Canada.
In March, the dairy group agreed to acquire Portuguese food company Sequeira & Sequeira – a company operated by partners and brothers José and António Sequeira, whose father founded the business in 1986.
The agri-food company is hopeful that Lactalis will explore growth opportunities for Sequeira & Sequeira and develop it further. The deal also includes Lacticínios do Paiva, its factory in Lamego, and all its other businesses and activities.
