OMIRA Oberland-Milchverwertung GmbH Annual General Shareholders´ Meeting

OMIRA shareholders voted in favor of takeover by Lactalis

Ravensburg, June 22nd 2017


In today´s Annual General Shareholders´ Meeting the OMIRA shareholders approved the takeover of OMIRA by the French Lactalis group with an overwhelming majority of 97.8 percent. This decision ensures positive future perspectives for both OMIRA sites and a 10-year milk price guarantee for all OMIRA milk producers.

The main topic of the AGM was the vote about a package of future-oriented measures which centers on the takeover of OMIRA by Lactalis. Important aspects of this package are:

  •  Securing a high milk price on a long-term basis for all OMIRA milk producers. The milk price will be guaranteed for a period of at least 10 years, it will correspond to the Bavarian AMI milk price index and, taking into account all individual surcharges (quantity surcharge, GMO-free surcharge, etc.), will be above the Bavarian average milk Price
  • Redemption of the shares in the company held by milk Producers
  • Access to international markets which will open up new sales channels
  • Further development of and investments into the Ravensburg (powder and ingredients) and Neuburg (fresh products) sites
  • Interesting perspectives for all employees

Over the course of a very challenging year 2016, the partnership talks became inevitable. While OMIRA was still at the comparatively higher end of the milk price level in 2015, it has been lagging behind the improvement that set in in summer 2016. The main reason for this situation lies in the large amount of EU intervention milk powder in storage at the moment which adversely effects price developments in this segment.

The lagging milk price paid by OMIRA led to a situation of great insecurity among the milk producers and impacted their willingness to follow through with the OMIRA 2020plus strategy. The resulting departures by milk producers and threats to follow suit by others made it more and more difficult to plan the necessary investments and further developments.

This situation prompted OMIRA to intensify the partnership talks that were already part of its 2020plus strategy. Several potential candidates were approached within a systematic process to evaluate the possibility of cooperating within the framework of the OMIRA 2020plus strategy including the comprehensive investments planned as part of this strategy. Lactalis group quickly presented itself as the ideal partner in the course of these talks. In this process OMIRA stayed true to its principle of ensuring a secure future for all its milk producers and a balanced ratio of opportunities and risks for its members. Today´s takeover approval provides all OMIRA milk producers with high planning security and offers them a long-term perspective. The entrepreneurial risk of undertaking investments in the dairy now lies with Lactalis


Overwhelming majority for takeover and next steps

The overhelming majority of 97.8 percent, which significantly exceeds the necessary majority of 75 percent, shows that the OMIRA milk producers are convinced of the benefits that a takeover by Lactalis has to offer.

After the necessary formal approval by the antitrust authorities, which is expected in August, the day-to-day OMIRA business including all employee contracts (with all collective bargaining regulations as well as employee seniority) will first be transferred to the OMIRA Industrie GmbH. In a second step Lactalis will then take over OMIRA Industrie GmbH.

OMIRA Oberland-Milchverwertung GmbH will remain independent under the ownership of the OMIRA milk producers. Its sole task will be the procurement and management of the raw milk supply. It will continue to collect the milk of the individual milk producers and the cooperatives and sell it in bulk to Lactalis. The company will be represented by the current members of the supervisory board. All contracts – including notice periods - between individual milk producers and cooperatives and OMIRA Oberland-Milchverwertung GmbH will remain intact. The milk price guarantees secured by the contracts signed with Lactalis will be in effect from 01.09.2017 until at least 31.12.2027.


Company key figures 2016

In 2016 we managed to keep the company´s earnings and balance sheet stable despite the turbulent framework.

Due to consistently cautionary management and conservative accounting we achieved a consolidated net income for the year of EUR 1.6m.

We recorded a slight decrease in milk collection volumes to 810m kg in 2016.

The milk price paid by OMIRA mirrored the weak market development, also we were not able to fully profit from market improvements that set in in summer 2016. Taking into account all contract types, surcharges and payments an average milk price of net 27.72 ct/kg was paid in 2016.


Discharges and motion of confidence

The chairman of the supervisory board, Erich Härle, as well as the supervisory board as a whole were granted discharges for the year 2016. CEO Ralph Wonnemann was denied discharge by a narrow majority.

To ensure a solid basis for his future work for OMIRA Oberland-Milchverwertung GmbH, the chairman of the supervisory board, Erich Härle, asked the shareholders to renew their confidence in him. They expressed their confidence with a vote of 86.5 percent in his favor.

OMIRA's "Strategy 2020 plus": medium-sized German dairy is setting the course for the future Ravensburg

Ravensburg, 13.01.2016

After two years of successful restructuring, OMIRA is taking another important step in shaping the future for the company and its members. With the "OMIRA Strategy 2020 plus" that it has introduced, the company is setting itself up to meet the growing challenges on the milk market. The important elements of the concept are the special origin of the milk raw material as well as a clear commitment to quality and "sustainability", which OMIRA keeps on top of with a consistent sustainability model. Furthermore OMIRA is seeking international co-partnerships for long-term cooperation to enter the growing markets.

In August 2013, OMIRA presented its restructuring concept with the goal of regaining OMIRA's stability and working with its members to steadily overcome 2015, which was predicted to be a challenging year for the milk industry; the drop in the milk quota was foreseeable. The most important goals of the restructuring have been achieved. Positive business results, financial debt relief and an above-average milk price paid in 2014 and 2015 are evidence of the return to stability and create a good starting point for the future that needs to be created.

Since summer 2014, the market situation has been shaped by falling sales and persistent insecurity. In light of the current political situation and global milk quantity trend, OMIRA also has a very cautious outlook for 2016. According to OMIRA's research and expert opinions, significant growth on the global dairy product market is still nevertheless foreseeable for the long term. However, this prediction is for the newly industrialised countries, not Western Europe. From 2017 onwards, the market price level is expected to improve but still remain very volatile in the future. This challenging market situation received particular attention in the development of the "OMIRA Strategy 2020 plus".

Key questions had to be answered when it came to shaping the future of the Southern German company, such as: how can OMIRA steadily participate in international opportunities in the long term and how can it sustainably position its business beyond export business with retailers/agents, which is normal for German dairies? How does the dairy handle the specificities of the cooperative, such as the disparity between the farming structures and their structural developments?

As a result, "OMIRA 2020 plus" was drawn up in autumn 2014 as the first systematic strategy project in the history of the dairy. After a year-long project phase, during which a multitude of OMIRA employees, the supervisory committee, customers, suppliers and experts regularly met to exchange ideas, the "OMIRA Strategy 2020 plus" was unanimously passed by the OMIRA supervisory board in October 2015.

"OMIRA 2020 plus" is based on the principle of consistently positioning the cooperative in the long term as a stable dairy producing goods from attractive regions and owned by its approximately 3000 members. The cornerstones of this principle are continuously increasing sales through partnerships in international business as well, and dampening risks by means of a focussed 3-pillar strategy. For the owners and business partners, the high transparency and reliability that have already been in practice since 2013 are a basic requirement for this.

OMIRA milk comes from many recognised regions with a "seal of quality", such as the Alps, the Allgäu, Lake Constance, Bavaria and the Black Forest – this array of special origins is an important unique selling point for OMIRA and will in the future be an essential component in the development of the company alongside high product quality and the sustainability concept. With a significantly quicker innovation process and the ability to separately process these particular raw materials in documentable manner, OMIRA is laying further foundations for success.

Our focus is the further development of the "MinusL/lactose-free", "Ingredients" and "Fresh dairy products" business fields using our own resources. Qualitative growth is paramount. At the same time, we are working with our partners to consistently drive the methods for expanding the business in growing markets further forward.

MinusL & lactose-free: For 15 years, OMIRA's MinusL brand has made it Germany's innovation and market leader in the lactose-free product sector. This is one of the dairy's core areas of business, which is being further expanded by product innovations and an international brand leadership.

Fresh products: Expanding regional brands, further developing dessert expertise and strengthening innovation management are the cornerstones of this approach. The regionally known OMIRA brand is currently undergoing a relaunch. The goal is to give the brand a more emotive and modern design and to reposition it as a premium product.

Industrial business: In OMIRA's main business field, the expansion of technical facilities is paramount. Modernising and expanding the production plants not only allowed OMIRA to tap into new market and customer segments, for example, but also to offer established partners an even better range of services. Here too, qualitative growth is more important than quantity development.

Far-reaching partnerships: Since 2013, the dairy has been in discussion with companies with an interest in OMIRA milk's special regions of origin, MinusL/lactose-free expertise and top-quality industrial products. In autumn 2013, OMIRA's collaboration with Mondelez turned into a long-term cooperation. In addition to further developing this partnership, the company also intends to build additional partnerships. OMIRA aims to enter into one or two more longstanding win/win relationships. However, deciding on a suitable co-operation partner to create a long-term stable access to the growing markets is a systematic process, and one that OMIRA is not going to rush.


OMIRA is investing approximately 60 million euros into the Ravensburg and Neuburg sites by 2020

The Ravensburg and Neuburg production sites have been preparing for the next step since 2015. Focussed investments for the future have also been made at both sites to facilitate the consistent further development of their respective production focuses. All measures are structured and implemented into project plants. The goal is to invest approximately 60 million euros into increasing efficiency, flexibility, quality and sales by 2020. OMIRA can largely finance this volume itself by borrowing a maximum of 20 million euros. In accordance with the cooperative's own risk philosophy, the financial debt and therefore the liability/risk for the owners must be kept deliberately low.

Using the measures and projects set out in the "OMIRA 2020 plus" strategy, the dairy intends to be able to meet the increasing challenges on the milk market in the long term. But successful implementation of the strategy now requires a great deal of commitment from everyone involved. With targeted business management, and the further development and building of partnerships, OMIRA will walk this path together with its owners.


OMIRA sustainability concept

The future of our planet is a key topic for everybody – including the milk industry. When it comes to designing a future-proof OMIRA, the subject of sustainability is a major cornerstone that plays a large part in the 2020 plus strategy.

As a responsible company with cooperative values, OMIRA must of course behave in a manner that focuses on profit for its members. At the same time, sustainable economic management and the protection of the environment also need to remain in the focus. This is what motivated OMIRA to decide to introduce a sustainability management concept in 2015. After an intensive development phase – which also included involvement of external experts, such as the company Zukunftswerk – in 2016, the dairy launched a resilient and professional sustainability concept.

This model is based on a holistic approach that encompasses the three sectors of ecology, economy and social responsibility. The sustainability model refers to both production in the dairy as well as the agricultural sustainability concept for its farmers.

In 2015, the dairy had already taken the first steps in implementing the model: increased energy efficiency, participation in the Global Compact of the United Nations, execution of a social audit and the creation of a CO2 footprint. OMIRA will be able to significantly reduce its CO2 emissions by means of measures already implemented and converting to 100% green power. As of 2016, the dairy will also compensate for its CO2 footprint using UN emissions permits and will therefore be a climate-neutral company in the next few years.

The agricultural sustainability concept has been developed in collaboration with Prof. Holzner and his team from the Weihenstephan-Triesdorf University of Applied Sciences in Germany and the OMIRA agricultural council as representatives of milk producers. In addition to the topics of animal welfare and the environment that are currently intensively discussed, the newly developed concept also puts farmers in the focus. Here, the focus is intended to be on social commitment, health-promoting measures and training. OMIRA aims to use its sustainability concept to document that its farmers act responsibly when it comes to animals and the environment. In the future, special achievements will also be rewarded separately.

The cooperative company sees the "OMIRA Strategy 2020 plus" including the "OMIRA sustainability concept" as a solid basis for itself and its milk producers enabling them to look optimistically into the future.

OMIRA GmbH is one of the largest dairies in Southern Germany and is owned by around 3000 milk producers. The company processes approximately 850 million kg of milk each year at two sites. The exceptional quality feature of all OMIRA products is that the milk comes from recognised Southern German regions with a "seal of quality", such as the Alps, the Allgäu, Lake Constance, Bavaria and the Black Forest – this array of special origins is an important unique selling point for OMIRA. The company's core business includes the manufacturing of milk products for the international food and confectionary industry as well as for baby food producers. Another major line of business is the manufacturing of lactose-free dairy products. OMIRA's MinusL brand makes it an innovation and market leader in Germany. Profound expertise and state-of-the-art technology allow OMIRA to produce recipes and product qualities tailored specifically to customer requirements. In addition, certification to various international standards, an innovative sustainability concept and high product quality make OMIRA a reliable supplier.