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Emmi AG Annual Report 2023

Feb 28, 2024

874_10-k_2024-02-28_cfb0987a-2bf8-4396-a726-534806474332.pdf

Annual Report

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Best dairy moments

Annual Report

The best dairy moments – dear to our hearts

Emmi is shaped by its responsible approach and passion for carefully produced, high-quality dairy products. And our purpose expresses this. Day in, day out, our more than 9,000 MAKERS of the best dairy moments do their bit to ensure that things stay this way – for our consumers, for customers and partners, and for society as a whole.

Key figures Emmi Group

2023 2022
in CHF million
Net sales		 2023
4,242		 adjusted1) 2022
4,230		 adjusted2)
Sales development in % 0.3 8.1
Net sales increase in organic terms in % 3.5 7.0
Acquisition effect in % -1.0 2.1
Currency effect in % -2.2 -1.0
Earnings before interest, taxes, depreciation and amortisation (EBITDA) 375.8 413.0 379.3
as % of net sales 8.9 9.7 9.0
Earnings before interest and taxes (EBIT) 258.2 295.4 253.0 266.1
as % of net sales 6.1 7.0 6.0 6.3
Net profit 186.3 212.4 182.5 194.3
as % of net sales 4.4 5.0 4.3 4.6
Investment in fixed assets (excl. acquisitions) 145.1 206.2
as % of net sales 3.4 4.9
Headcount (full-time equivalents) as at 31.12. 9,346 9,368
Headcount (full-time equivalents) at yearly average 9,337 9,299
31.12.2023 31.12.2022
Total assets 2,715 2,635
of which shareholders' equity incl. minority interests 1,415 1,284
as % of total assets 52.1 48.7
Market capitalisation 4,874 4,189

1) Adjusted for non-recurring effects of CHF 37.2 million at EBITDA and EBIT level and CHF 26.1 million at net profit level. In the reporting year, these resulted from the sale of Gläserne Molkerei and the sale of the minority stake in Ambrosi S.p.A.

2) The adjustment effect in the previous year relates to an impairment of non-current assets at Gläserne Molkerei. This amounts to CHF 13.1 million at EBIT level and CHF 11.8 million at net profit level.

Net sales

Since 1 January 2022, the companies in France have been part of the division Europe (previously division Americas). The previous year's figures have been restated accordingly.

Net sales by product group

Net sales by division

Switzerland

EBIT

in CHF million as % of net sales (previous years restated)9

  • EBIT
  • Adjusted EBIT2
  • FBIT as % of net sales
  • Adjusted EBIT as % of net sales2)

Net profit

in CHF million as % of net sales (previous years restated)0

  • Net profit
  • Adjusted net profit3)
  • Net profit as % of net sales

  • Adjusted net profit as % of net sales3)

  • 2) The adjustment effect in the year under review relates to the loss from the sale of Gläserne Molkerei. The adjustment effect in 2022 related to an impairment of non-current assets at Gläserne Molkerei. The adjustment effect in 2020 related to the loss from the sale of the majority interest in Lácteos Caprinos S.A.

  • 3)The matters mentioned in footnote 2 also resulted in adjustment effects at net profit level. In addition, profit from the sale of the minority interest in Ambrosi S.p.A. led to a further adjustment effect at net profit level in 2023.

Emmi sustainability targets with a 2027 time horizon

25% reduction in emissions in the supply chain (Scope 3 vs. 2019)

-7%

Previous year: -2%2)

Vision netZERO 2050

Further development of the Swiss industry standard

Provisional target achievement levels as at 31.12.2023

<sup>1) Figures for 2019 restated due to change in the consolidation and accounting principles for goodwill in 2020.

<sup>1)Currently only Switzerland considered | 2)Corrected due to new data basis

<sup>3 See this document for the definition > emmi.com > Sustainability > ESG expert corner > Scope of report and methodology for Emmi environmental figures.

Contents

The year at Emmi

Corporate Governance

Compensation report

Financial report

Report on non-financial matters

Ricarda Demarmels CEO

Urs Riedener Chairman of the Board of Directors

Dear Shareholders

Also last year saw no let-up in global upheaval. Geopolitical tensions, war, the advance of climate change, inflation and the rising cost of living adversely affected all of us as individuals as well as wider society and companies. In this environment, the Emmi Group once again did everything in its power to demonstrate its dependability as a partner. In line with a clear strategy and a sound set of values, our teams applied their extensive expertise in their craft and exercised foresight and flexibility to delight our many customers, not to mention millions of consumers, with outstanding products and innovative concepts – day in and day out.

Robust business model

In 2023, the Emmi Group asserted itself effectively, increasing its annual sales to CHF 4,242.4 million in a demanding market environment that continues to be driven by inflation. The Group achieved solid organic sales growth along its strategic priorities, made important progress and expanded its market positions. Broad-based, price-driven and organic

sales growth of 3.5% reflects the consistent implementation of our strategy as well as our clearly differentiated market positions, the strong innovative brand portfolio and the diversified product range and country portfolio that characterises Emmi.

› Our strategy, page 9

In our home market of Switzerland, we exceeded our expectations by achieving pleasing organic growth of 3.8%, driven in large part by innovative brands, successful partnerships with the retail trade and the post-pandemic recovery in the food service sector. In international business, organic growth for the division Americas was 5.7%, slightly below expectations. While Chile, Mexico, Spain and Brazil performed strongly, the milk shortage in Tunisia and the subdued development of cheese specialities in the premium segment in the USA, our most important export market, served to slow down growth. The European market environment remains challenging. In the face of subdued consumer sentiment, division

"In 2023, the Emmi Group achieved growth by showing innovative strength in its priority areas across strategic niches and markets. We have consolidated our strong market positions while generating long-term value for our stakeholder groups through our responsible approach to business."

Ricarda Demarmels

Europe reported slightly lower organic sales development of 0.4%, a figure marginally short of expectations. While development for Emmi Caffè Latte and Dutch fresh goat's cheese was pleasing, export business with cheese from Switzerland hampered sales development in Europe due to exchange rates and prices.

The negative currency effect linked to the stronger Swiss franc and the negative acquisition effect from the divestment of Gläserne Molkerei produced total sales growth of 0.3%. Emmi maintained the consistent development of its company portfolio in 2023, divesting Gläserne Molkerei as well as its minority interest in Ambrosi S.p.A.

Innovative brand and niche businesses

During 2023, the Emmi Group also succeeded in differentiating itself on the market through its innovative brands while building on its leading positions. The strategic niches of ready-to-drink coffee – through the iconic Emmi Caffè Latte brand – speciality cheeses and chilled premium desserts all performed well. By contrast, sales of plant-based milk alternatives have dropped overall in the face of the challenging market conditions.

› Our brands, pages 20–21

Positive result in demanding market environment

The year 2023 was defined by further rises in raw material, energy and wage costs. Despite this, Emmi achieved significant improvements compared to the previous year thanks to operational progress − notably in the strategic niche of chilled premium desserts in the USA and in the important growth market of Chile. This progress was supported by the consistent implementation of efficiency and cost cutting programmes as well as responsible sales price increases. On this basis, we were able to absorb another significant increase in overall input costs while achieving a positive result at the upper end of our own forecast.

›Our operations, pages 22–23

Adjusted to account for the loss from the sale of Gläserne Molkerei, the operating result at EBIT level stood at CHF 295.4 million (previous year: CHF 266.1 million) and the adjusted EBIT margin was 7.0% (previous year: 6.3%). Net profit, adjusted to account for the loss from the sale of Gläserne Molkerei and the profit from the sale of the minority interest in Ambrosi stood at CHF 212.4 million (previous year: CHF 194.3 million) while the adjusted net profit margin was 5.0% (previous year: 4.6%). Excluding the aforementioned adjustment effects, the operating result at EBIT level stood at CHF 258.2 million (previous year: CHF 253.0 million) and the EBIT margin was 6.1% (previous year: 6.0%). The corresponding net profit was CHF 186.3 million (previous year: CHF 182.5 million) and the net profit margin stood at 4.4% (previous year: 4.3%).

Against the background of a positive result and our strong balance sheet, the Board of Directors proposes increasing the dividend by 6.9% to CHF 15.50 per share (previous year: CHF 14.50) in the interests of a consistent dividend policy.

Outlook

The Emmi Group expects the generally challenging economic conditions – characterised by a strong Swiss franc, geopolitical tensions, high input costs and subdued consumer sentiment – to continue during 2024. Emmi is responding with strict cost discipline and Group-wide efficiency programmes while consistently working to transform its portfolio. For financial year 2024, Emmi is anticipating organic sales growth of 1% to 2%. Growth in Switzerland is expected to be in the

range of 0% to 1%. In international business, sales growth is likely to be between 2% and 4% for the division Americas and between 0% and 1% for the division Europe. At EBIT level, Emmi expects a result of between CHF 295 million and CHF 315 million and a net profit margin in the range of 5.0% to 5.5%.

Acting responsibly

For the Emmi Group, acting responsibly is a top priority and something that is anchored in our business model. Sustainable and profitable growth calls for a long-term perspective. The Emmi Purpose illustrates our conviction that we will continue to create value for all stakeholder groups in the future by working together with our partners and taking economic, social and environmental aspects into consideration. For this reason, we advanced our sustainability efforts in 2023 and are publishing our first report on non-financial matters.

›Non-financial report, pages 160–213

"Emmi has been a reliable partner for more than 100 years. We take on responsibility within our value chain to achieve sustainable success together with our partners. Our long-standing commitment to sustainability, our continuity of leadership and the steady enhancement of an established business model make this possible."

Urs Riedener

Together with partners, we compiled a science-based list of criteria for sustainable milk outside Switzerland. During the first year of the "KlimaStaR Milch" industry initiative in Switzerland, we identified the first effective climate protection levers to promote a more sustainable Swiss dairy industry. On our road to netZERO 2050, we are encouraging the use of renewable energies. As a founder member of RecyPac, we are also committed to establishing a circular economy for plastic packaging and drink cartons across Switzerland.

› Our responsible business model, pages 14–17

We can only create the best dairy moments in partnership with our employees. With this in mind, the working environment at Emmi promotes teams and offers them a whole range of development opportunities. In the people area, around 60% of all employees have a personal development plan. Our culture of cooperation extends to functions, locations and countries, and covers our collaboration with customers and suppliers. This is what makes the Emmi culture unique and plays such a major part in our success.

›Our people, pages 18–19

Continuity in supervision and leadership

Last April, the Annual General Meeting elected Urs Riedener as the new Chairman of the Board of Directors. Emmi would like to thank Chairman Konrad Graber, who is stepping down, for his tireless efforts to secure a strategically sound set-up of the Emmi Group during his many years of successful collaboration. Appointed from the Group's own ranks, former CFO Ricarda Demarmels succeeded Urs Riedener as CEO of the Emmi Group at the beginning of the year. Completing the Group Management team, Sacha D. Gerber was appointed the new Chief Financial Officer on 1 June 2023 and Raffael Payer was confirmed as the new Chief Marketing Officer on 1 October 2023.

The Board of Directors and Group Management, backed by a strong management team and over 9,000 dedicated employees, are committed to making sure that Emmi stays on its course for success. We would like to thank each and every one of them for their great commitment.

Urs Riedener

Chairman of the Board of Directors Ricarda Demarmels

CEO

Driving economic success

Our responsible business model, geared towards long-term profitable growth, and our focused strategy help us to do the right thing and remain economically successful. Our approach is based on unique, innovative brand concepts, a diversified portfolio and a highly agile, locally anchored organisation.

The dairy leader in Switzerland

Our roots are in Switzerland, where we are number 1. We want to consolidate this strategically central position in the long term. We will achieve this through innovative concepts, excellent customer service and, when reasonable, new business areas.

A strong international market player

All companies of the Emmi family play their part in achieving our common goals. We are now focusing on strengthening our position in those markets where we have established a stronghold or have seen solid growth in recent years.

An innovative leader in selected niches

We aim to get even closer to our consumers and stand out from our competitors with sophisticated innovations. Our particular focus is on niches where we already have leading market positions or are striving to achieve these.

Excellent in what we do

Through excellent cross-functional action and leadership, we are developing into the benchmark for our industry in selected areas.

A role model in sustainability

Building on our tradition, sustainability is an integral part of our business model and our strategy. We strive

to achieve long-term profitable growth and to create added value for all our stakeholders.

Our ambition for the future

Together, we create the best dairy moments – today and for generations to come.

Our long-term success depends on sustainable and profitable growth and an intact planet. As a key player in the dairy industry, our aim is to continue to positively influence our industry by balancing economic, social and environmental aspects and promoting sustainable practices beyond our direct sphere of influence. We are committed to science-based targets (SBTi) and our netZERO 2050 vision to limit global warming in line with the goals of the UN Paris Agreement.

Support for the UN Sustainable Development Goals

Working together towards a sustainable future

Information on the Emmi sustainability model, our goals and the progress we have made to date, along with the Emmi Sustainability Report, can be found at ›emmi.com/sustainability

Sustainability and responsibility

Code of Conduct

The Emmi Code of Conduct sets out the values and principles according to which we assume our responsibility towards our stakeholders.

Corporate Governance

Committed to the principle of good and transparent governance and based on the requirements of the SIX Swiss Exchange as well as national and international best practice, we have a clear framework of values, principles, rules and regulations in place. These specify how Emmi is managed and developed as a company.

UK Modern Slavery Act

We also fulfil our responsibility with regard to fundamental human rights.

Sustainability Report (GRI)

Since 2011, we have been providing transparent information about our sustainability commitments and progress by reporting in accordance with the Global Reporting Initiative (GRI) guidelines.

Emmi sustainability model

Our long-standing commitment and our ambitious targets are reflected in a comprehensive framework.

Environmental key performance indicators (KPIs)

Emmi reports key figures relating to greenhouse gas emissions, energy and water consumption as well as waste.

Materiality matrix

Our sustainability model focuses on topics that are of particular relevance to us and our stakeholders and where we can achieve the greatest positive impact.

Stakeholdermatrix

We take account of the diversity as well as the differing needs and demands of our stakeholders using a differentiated approach: from active engagement with social groups to regular dialogue and institutionalised exchanges.

netZERO 2050 roadmap

We pursue science-based reduction targets (SBTi) along the entire value chain aligned with our netZERO 2050 vision. A CO2-reduction path with clear interim targets serves as a binding guideline.

Emmi Supplier Code of Conduct

The Emmi Supplier Code of Conduct is evidence of our commitment to managing the company with integrity, and reinforces our efforts to achieve sustainable procurement together with our partners and suppliers. In this way, we can minimise risks together and build trust among our stakeholders.

Whistleblowing hotline

An open culture of dialogue in line with our corporate values coupled with a high level of professionalism and integrity is of central importance for Emmi. The Emmi whistleblower hotline enables grievances and rule violations to be reported anonymously from anywhere in the world.

This and further information can be found at

Our highlights

Emmi Caffè Latte speaks GenZ

The new Emmi Caffe Latte flavours were developed by and for GenZ. The Marketing department asked Emmi apprentices in this target group to share their ideas and preferences. The results were developed into new recipes, sampled and rated by the young people and finally produced by us. The winners: Popcorn and Hazelnut Brownie. The idea behind the new "Fun Latte" is that young people are once again looking for some light-hearted fun after the pandemic years.

A role model in sustainability

We published our seventh sustainability report as part of our long-standing commitment to sustainability, which is an integral part of Emmi's corporate strategy. Every two years we take stock of how we are measuring up to our commitments. We are on course to achieve our ambitious sustainability goals for 2027 in the areas of people. communities and the planet. Emmi has made progress in employee development and sustainable dairy while cutting greenhouse gas emissions and reducing waste. Thus, we create the best dairy moments - today and for generations to come.

More commitment to less sugar

As the leading manufacturer of high-quality dairy products in Switzerland, we attach great importance to a balanced and healthy diet. Back in 2015, we committed to reducing the sugar content of our yogurts. Today we are supporting the extension of the Milan Declaration to milk drinks, such as our popular Emmi Caffè Latte, and also to quark.

Emmi teams get closer together

A passion for the best dairy moments is also uniting our teams in the Netherlands. Since the spring of 2023, we have operated our goat's milk powder business in Etten-Leur as Emmi Nutritional Solutions (ENS) with a view to strengthening this attractive niche. ENS then joined forces with Emmi Benelux and Bettinehoeve to form a more powerful and agile organisation. This creates more opportunities for employees, customers and consumers, and provides greater strategic oversight with the involvement of local teams

Emmi Dessert Italia scoops award in UK

The Rachelli dessert Classico Tiramisu received the coveted Great Taste Award in the UK – just three months after launching on the UK market. Rachelli, a premium brand from Emmi Dessert Italia, is a pioneer in authentic Italian dessert creations made with carefully selected ingredients. It is produced using Sardinian Savoiardi sponge fingers and Italian Marsala wine. The award underlines the innovative flair of the Italian subsidiary in a key strategic niche which the Emmi Group is seeking to expand and develop as part of its strategy.

Commitment to circularity

As a founder member of RecyPac, we are actively committed to a circular economy for plastic packaging and drink cartons. The aim of the organisation is to establish a harmonised and sustainable system for collecting and recycling this kind of packaging across Switzerland. The materials collected will be recycled and used again in packaging. RecyPac chimes with our ambitious sustainability goal of making all packaging fully recyclable by 2027 in the interests of circularity. As a producer of high-quality dairy products, we depend on recyclable packaging. We commit to this goal through our membership of various organisations.

Dedicated to young people

Given the acute shortage of workers and skilled professionals, employee development - as anchored in the Emmi strategy – is vitally important. As part of this strategy, Emmi sets great store by high-quality apprentice training and staff development opportunities. The fact that all 44 of the apprentices in Switzerland successfully completed their training, with a large number of the young professionals subsequently staying with the company, is testament to Emmi's dedication to its employees. We are passionate about ensuring young people can gain a sound training before looking ahead to development opportunities within the company.

Consolidation of important US market

In Wisconsin, Emmi Roth opened an ultra-modern site where cheese will be converted and packaged, using resources efficiently. This will enable the Emmi Group to consolidate its business activity in the USA, its most important overseas market, while forging still further ahead on the American speciality cheese market. The large-scale investment will give rise to additional sales opportunities for imported Swiss cheese. The facility, which runs on electrical energy, will also help Emmi on the road to netZFRO 2050. Around 125 new and ergonomic workstations were also created.

A role model in sustainability

Sustainability is an integral part of our business model and our strategy. To provide the best dairy moments for generations to come, we need to treat people and nature with consideration.

We believe that acting sustainably and taking account of economic, social and environmental aspects are essential. By working with our milk suppliers and partners, and by involving consumers, we aim to play our part in keeping nature intact and viable for generations to come.

Our sustainability model in practice

We run our business in a resourceefficient, environmentally friendly and socially responsible manner on the basis of the Emmi sustainability model and our netZERO target.

To make further progress and to meet our ambitious targets in the areas of people, communities and the planet, we have enshrined sustainability in the central business processes of all Emmi Group companies.

Progress and challenges

By 2027, all employees of the Emmi Group should have a personal development plan. Already, 71% of employees in Switzerland have a development plan; for the Group as a whole, every second employee has such a plan. This not only enhances the ability of our people to perform in their current fields of responsibility, it also creates a basis for filling vacancies with qualified professionals from within our own ranks. In fact, our goal is to fill half of all vacancies internally (the proportion was 26% for the Group as a whole in financial year 2023).

We are also making progress on our focus topic of sustainable dairy. In the year under review, 99% of our milk suppliers in Switzerland met the requirements of the industry standard for sustainable Swiss milk. We have also had success internationally. At our subsidiary in Chile, we managed to certify 80% of the milk volume with AENOR, the animal welfare label. Quillayes Surlat thus became the first company in South America to gain this certification.

Having achieved a significant reduction in greenhouse gas emissions (Scope 1 and 2) in 2022, emissions in 2023 were, as expected, only marginally below the previous year's level (-3%) and is now thus 30% below the emissions of the base year 2014 (previous year: 28%). Scope 3 emissions in the value chain were not reduced from the previous year's level. We are currently working on projects and measures that we expect to deliver positive effects over the years ahead.

Another aim is to cut production and food waste while conserving resources through the circularity of our packaging. However, we did not reduce our waste or landfill waste compared to the previous year, with both rising by 8% due to extraordinary quality-related incidents. We were able to reduce our waste by 16% against the base year 2017 (previous year: 22%) and waste to landfill by 3% (previous year 11%). We were also unable to counter food waste in Switzerland (+6% against the previous year), corresponding to a reduction of 13% against the base year 2017 (previous year 18%). Working with our partners in our Swiss value chain, we have set a key milestone in terms of the circularity of plastic packaging and beverage cartons: the establishment of RecyPac will pave the way for a material cycle. Emmi is on the Board of this organisation. During 2023, we raised the proportion of recyclable materials in

our packaging five percentage points to 50% in Switzerland. At international level, we continue working to improve the data basis and adapt legal requirements.

Although absolute water consumption has been reduced, we did not achieve a reduction in relation to the production quantity. This was because cleaning times did not decrease to the same extent as the production quantity.

"Emmi Energy Milk High Protein is the perfect choice for my active lifestyle. It tastes great, there's no added sugar and it comes in an environmentally friendly, recyclable PET bottle."

Sophie Jung

Trainee management assistant

Lucerne, Emmi Switzerland

"Emmi Caffè Latte is the ideal start to my day. With 100% natural ingredients, sustainable Swiss milk and freshly brewed, barista-grade coffee, it's exactly what I need to get on top of our logistical processes."

Laura Scheier

Order dispatcher

Nüziders, Emmi Austria

Outlook

Throughout 2024, we will be intensifying our focus on energy and decarbonisation and working closely with our international subsidiaries to develop reduction paths. As a major player in the Swiss dairy industry, we will continue to deepen our commitment to industry platforms and organisations in partnership with our dairy farmers, suppliers and partners in the value chain. In particular, we will focus on the topic of "Developing employees". Our aim here is to raise awareness of development opportunities, encourage exchanges and inspire the makers of Emmi to take the next step in their progression.

United against food waste

In cooperation with other companies and associations, we have committed to the national goal of halving food waste in Switzerland by 2030. The goal is already part of our sustainability model, and adds extra impetus to the existing measures.

A circular economy for Switzerland

We intend to ensure 100% of our packaging is recyclable by 2027, with closed material cycles in place. To achieve this, all of the players in the value chain will need to work together. To establish long-term circularity for plastic packaging and beverage cartons in Switzerland in a far-sighted and sustainable manner, we teamed up with industry partners to found the umbrella organisation "RecyPac – circularity for plastic and beverage cartons". We hold a seat on the Board with a view to promoting the topic responsibly and actively.

Sustainable dairy

Today, 100% of our milk suppliers in Switzerland meet the requirements of the industry standard for sustainable Swiss milk. The "KlimaStaR Milch" industry initiative, which we launched in association with partners, has also made solid progress. In Switzerland, 234 businesses have been recruited and extensive data has been collected. With partners in the value chain, we also participate in the Klimatisch. We are working to realise a joint "climate protection industry platform" with a view to coordinating, implementing and realising climate protection activities on farms.

Fondation Vitalait

Farmers in Tunisia are often young, with no formal education. Therefore, they depend heavily on a fair income. Thanks to the Fondation Vitalait, the farmers can receive training in productivity gains (technology and feeding) alongside such environmental aspects as water, renewable energies and optimal cooling of the milk for farms.

"Zero Waste to Landfill" certification in Spain

Lácteos de Navarra, our Spanish subsidiary, produces yogurts in Pamplona. Through exchanges with waste disposal service providers, the company makes sure a minimum amount of waste ends up in landfill. Lácteos de Navarra was awarded "2022 cero residuo" certification in 2022. In 2023, 99.6% of waste was converted to biogas, used to generate energy or recycled.

Cutting carbon emissions in Brazil

After Switzerland, our Brazilian subsidiary Laticínios Porto Alegre processes the second largest volume of milk in the Emmi Group. A pilot project to record greenhouse gas emissions from suppliers' milk production farms was initiated here during the summer. Measures aimed at reducing emissions will be developed on this basis.

Global criteria list

By the end of 2027, Emmi intends to process only milk that is produced according to the highest regional sustainability standards. In view of our niche activity in many countries, we rely on commitments within the industry and specific agreements with milk suppliers. Having devised the basis for these agreements over the past four years, we evaluated eight aspects of sustainable milk according to a list of criteria developed with experts.

Emmi as an attractive employer

The Emmi Group faces the effects of the shortage of skilled workers, and the transition from an employer's market to an employees' market. We are therefore making all the more effort to be an attractive employer to our employees. Our corporate culture based on respect and our myriad development prospects add up to a working environment that supports and encourages teamwork.

Treating each other with respect is part of the Emmi DNA. We value team spirit, we encourage ideas and we commit to our employees and the upcoming genera

tion. In the process, Emmi offers the creative scope needed to ensure chances are taken and ideas flourish while demanding and exciting tasks are accomplished.

"It fulfils me to be able to contribute my ideas to Emmi. Thanks to our proximity to the market, we can quickly meet the needs of our consumers and also inspire them with plant-based alternatives."

Arkaitz Virto

Key Account Manager y Canaris

Derio (ESP), Kaiku Corporación Alimentaria

Excellent leadership makes the difference

Attractiveness as an employer and a working environment that promotes dedication are the product of a consistent focus on people and our organisation over many years. When the potential of each individual is promoted and motivation is nurtured, employees buy into this environment.

For us to remain attractive to employees, a respectful management style is key. We therefore support the evolution of our management culture through specific measures, including specially developed courses and training sessions like "Excellent Leadership", which enables our managers to develop as leaders. At Emmi Dessert USA, for example we launched a personalised bilingual course for shift supervisors. We now plan to offer the course in Switzerland as well.

New organisational forms and collaboration methods

The future will belong to cross-functional, highly autonomous teams developing fast, customer-oriented solutions in line with clear priorities. Emmi will provide support by applying expertise in organisational forms and modern collaboration methods, while our change model will help us enact organisational changes effectively. On a regular basis, we also survey our employees to determine how they rate their work experience.

We are developing

Continuous further development is incorporated into our values. We promote talent and impart specialist knowledge as necessary. In the face of rapid technological developments, the advancement of employees has become even more important.

Moreover, younger people expect to develop faster. We facilitate this with a wide range of opportunities within various professional groups at home and abroad. This year's Sustainability Day was also devoted to the development of our people – something that will remain a focus topic over the year ahead.

Successful project in partnership

Teams from the Netherlands and Switzerland learned from one another as they worked together to commission a new powder tower in Etten-Leur, bringing the project to a successful conclusion. Experienced employees from Dagmersellen travelled to Etten-Leur to assist their colleagues with their know-how. The teams that stayed behind in Dagmersellen contributed to the success of the project by taking on the additional work in Switzerland. The project in Etten-Leur and the smooth continuance of operations in Dagmersellen are an example of how our values are practised and implemented.

Developing our managers

For some years now, we have been supporting middle management employees at our US subsidiary Cypress Grove through the "Task Force Purple" programme. Alongside professional training, the focus here is on team building and the establishment of an internal network. The managers are trained by the local Management and Human Resources teams, thereby aiming to enhance and develop personal strengths.

"I am very proud to be part of a team that is passionately devoted to the dessert traditions of Italy. Our chilled premium desserts are a delight for all those who appreciate high-quality and craftsmanship."

Daniele Cerchiari

Junior Demand Planner

Gattico (ITA), Emmi Dessert Italia

Diverse product portfolio of brands people love

Day in and day out, we delight consumers with a broad product range and differentiated, highly innovative brand concepts. Through high-quality products, we create the best dairy moments – today and for generations to come.

Each day, countless consumers show their trust in us by choosing high-quality Emmi products. Even as their demands continue to multiply, there is a strong emphasis on good value for money in the face of persistent inflation and changes to consumer behaviour. We are stead

ily expanding our branded business in order to meet these increasing demands and address current needs. We rely on a broad, diversified product portfolio as well as innovations in growth areas, focusing on profitable markets and our strategic niches.

Profitable growth in strategic niches

Emmi Caffè Latte is sustaining its positive momentum. Successful placements on the German TV show "Germany's Next Topmodel" as well as "Love Island" in the UK have continued, with the latter including a limited edition product for retail stores. In the chilled premium desserts area, Emmi Dessert USA has made significant operational improvements. During financial year 2023, we also won the "Food & Beverage Innovator Award" from the National Restaurant Association in recognition of our dessert creations in reusable glass containers.

In the field of speciality cheese, Luzerner Rahmkäse cream cheese continues to develop extremely well on the Swiss domestic market. We collaborate with the comedy duo "Divertimento" to advertise this product. By contrast, the strong Swiss franc has hampered exports of cave-aged Kaltbach cheese. The Beleaf brand, our plant-based milk alternative,

has made significant progress in Switzerland, attracting consumers with a new design and an improved recipe based on certified Swiss oats. In Spain, the Begetal brand has heightened its retail presence with a fresh design.

Innovations driving growth

Market-focused innovations are a core element of our strategy of profitable, long-term growth. The Brazilian subsidiary Laticinios Porto Alegre has launched new fat, lactose and sugar-free yogurt drinks, with drinks driving double-digit sales growth. In Switzerland, the successful Aktifit brand launched a low-sugar mini yogurt drink named after the cult comic character Globi. We achieved double-digit growth once again in this financial year with the Emmi Energy Milk brand in Switzerland, and in Spain the subsidiary Kaiku moved into the highprotein segment.

Emmi Roth

Since the acquisition of Athenos, which leads the US feta market, our American subsidiary Emmi Roth has built on the brand's market position. The renewed sales growth for Athenos was supported by an innovative feta dip and a creative campaign involving regional feta recipes.

Premium Italian delights

Founded in 1935 as a family-run patisserie in Milan, Rachelli has always upheld a tradition of developing high-quality, innovative products. In 2023, the company introduced a range of delicious chilled premium desserts which are exclusively available in retail outlets in Italy and the UK.

Emmi Caffè Latte for GenZ

Created by a team of Emmi apprentices, Emmi Caffè Latte innovations in 2023 are explicitly targeted at GenZ. The recipes are based on the findings of recent market research which revealed that younger consumers need to be introduced gradually to the slightly bitter taste of coffee. For this reason, the original "Fun Latte" has a less intense coffee flavour. Our two new star products are Popcorn and Hazelnut Brownie – exactly what GenZ asked for.

Agile, forward-looking production

The highly dynamic market and the persistently high input costs once again posed procurement challenges for Emmi in financial year 2023. By applying agile methods and working closely with suppliers, however, we managed to produce our high-quality dairy products with our usual reliability.

The market environment remained demanding, characterised by a high level of dynamism and consistently high input costs, especially in the energy area. Aside from the harvest-related shortage of raw materials, the Emmi Group generally managed to ensure goods availability.

Overcoming local challenges with agility

When it comes to responding rapidly to dynamic conditions linked to suppliers and customers as well as legal frameworks, flexible resource allocation is one of the biggest challenges. During

State-of-the-art facility for goat's milk powder

Our ambition is to be a pioneer in the field of sustainability. From our viewpoint, the facility for goat's milk powder in the Netherlands is an important development that will help us attain our sustainability goals. This is the first site in the Emmi Group to operate without a gas-driven steam system. An electric heat pump makes this possible by procuring the electricity required for operation from renewable energy sources. This has enabled us to avoid infrastructure investments like large steel pipes for the steam network while cutting down on carbon emissions.

2023, the Emmi Group supply chain worked on a method for pinpointing local priorities and allocating interdisciplinary resources. This gave rise to an agile approach to identifying solutions. The method, also known as sprint, facilitates cross-functional collaboration across national boundaries. One of the first sprints resulted in significant improvements to the safety and quality culture at Emmi Dessert Italia.

Controlling costs and quality in the USA

Having opened a new site for cheese processing in Stoughton, Wisconsin, last November, Emmi has consolidated its business activity in the strategic niche of speciality cheese in the USA, our most important export market. Cheese is now converted and packaged in a resourceefficient manner at the ultra-modern facility of US subsidiary Emmi Roth, thus enhancing internal added value. The project is boosting efficiency, simplifying processes and encouraging innovation while enhancing the agility of Emmi on the US market.

Data-based decision-making

We strive for excellence in everything we do. In order to control supply chains and production as efficiently as possible, key figures and data are critically important to Emmi. The Group has common principles that facilitate exchanges concerning the key control parameters. This enables

"We produce our exquisite cheese specialties from fine, regional organic milk with a great deal of passion and craftsmanship. We are proud that we receive numerous awards every year for our cheese expertise and innovative strength."

Shawna Haley

Team Lead Production

Petaluma Cader Lane (USA), Cowgirl Creamery

us to learn from one another and identify potential. Alongside production, quality and workplace safety indicators, environmental data is becoming increasingly important. This broad database informs decision-making at Emmi's production

sites. Investments on the Swiss domestic market

Emmi is intensifying its efforts in the area of sustainable packaging by using the recyclable material PET and deploying an additional production line. The company is also investing in modern, more efficient drying facilities in Dagmersellen with a view to producing highquality milk powder and consolidating the site for the long term.

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Local roots, international reach

Close to the market, with a network of global collaboration – these are the principles at the heart of our organisation's success.

From a regionally based organisation in Switzerland, we have developed into a successful group on the international stage. Today, we are the dairy leader in Switzerland with an established presence in 14 countries. The Emmi Group operates 57 production sites of its own.

Our quality products are exported from Switzerland to some 60 countries around the globe so that millions of people can rely on us each day to find what they need to live: high-quality and delicious food.

Contents

Corporate Governance

Guidelines

The information provided below complies with the Directive on Information Relating to issued by the SIX Swiss Exchange as well as the Articles of Association and Organisational Regulations of the Emmi Group. Unless otherwise indicated, all data relate to the balance sheet as at 31 December 2023. Corporate Governance (DCG)

> Media & Investors > Reports & Downloads > Corporate Governance > www.emmi.com Articles of Association of Emmi AG (in German)

> Media & Investors > Reports & Downloads > Corporate Governance > www.emmi.com Organisational Regulations of Emmi AG (in German)

1. Group structure and shareholders

1.1 Group structure

The organisational structure of the Emmi Group is shown below.

The Emmi Group is listed on the SIX Swiss Exchange through the holding company Emmi AG (headquartered in Lucerne, hereinafter referred to as "Emmi"). The group of consolidated companies contains only non-listed companies.

For market capitalisation, securities number and ISIN number, see section (Emmi Annual Report 2023). Share information of Emmi AG

For consolidated companies, see . Summary of consolidated companies, associates and joint ventures in note 30 of the consolidated financial statements

1.2 Significant shareholders

For significant shareholders, see sectionin the Notes to the financial statements of Emmi AG. 2.5 Share capital and significant shareholders

ZMP Invest AG, Lucerne, Zentralschweizer Käsermeister Genossenschaft, Sursee, and MIBA Genossenschaft, Aesch (canton of Basel-Landschaft), form a Group in the sense ofof the Swiss Financial Markets Infrastructure Act (FinMIA) and hold 60.4% of the total voting rights. As at 7 June 2016, , Los Angeles, USA, reported a holding of 268,500 registered shares of Emmi AG (5.019%). No further disclosure notifications have been made since. Art. 121 Capital Group Companies, Inc.

1.3 Cross-shareholdings

There are no cross-shareholdings with other companies that exceed 5% of capital or votes on both sides.

2. Capital structure

2.1 Share capital

Emmi's share capital amounts to KCHF 53,498.

2.2 Authorised and conditional capital in particular

Emmi did not create any conditional capital or set out a capital bandwidth in its Articles of Association in the reporting year, and there is no conditional or authorised capital from previous years.

2.3 Changes in capital

An overview of changes in capital in the reporting years 2020 to 2023 can be found in the section of the annual financial statements of Emmi AG. Statement of changes in equity

2.4 Shares and participation certificates

The share capital of Emmi comprises 5,349,810 registered shares with a par value of per share. Only one category of registered share exists, and no participation certificates exist. Each share carries the right to one vote. No preferential rights exist. The shares are fully paid up. CHF 10

For further information on shares, see the section Share information Emmi AG.

2.5 Dividend-right certificates

No dividend-right certificates exist.

2.6 Restrictions on transferability and nominee registrations

There are no restrictions on the transfer of registered shares of Emmi. The only precondition for entry in the share register and hence for the exercise of voting rights is a declaration on the part of the purchaser that the shares have been acquired in their own name and for their account. Purchasers may also be rejected if they do not expressly declare (i) that there is no agreement on the redemption or return of corresponding shares and (ii) that they bear the economic risk associated with the shares. No other registration restrictions exist.

The registration of fiduciaries/nominees without voting rights is permitted. On request, the Board of Directors shall decide on the registration of fiduciaries/nominees with voting rights on a case-by-case basis. No fiduciaries/nominees with voting rights were entered during the year under review, nor did the Board of Directors approve any other exceptions for entry in the share register.

2.7 Convertible bonds and options

Emmi has no convertible bonds outstanding. Furthermore, neither Emmi nor other Group companies have issued options on ownership interests in Emmi.

3. Board of Directors

All nine members of the Emmi Board of Directors (see table in sectionare nonexecutive members. Urs Riedener, elected as a new member and Chairman of the Board of Directors at the Annual General Meeting on , was CEO of the from 2008 until the end of the 2022 financial year. The other members of the Board of Directors have not previously been members of Group Management or the management of Emmi or one of its subsidiaries. The basis for nomination as a member of the Board of Directors is the fulfilment of a specific requirement profile, which reflects the relevant expertise for Emmi's strategic long-term development and seeks to achieve balance across the Board. Mandate agreements are in place with each member, governing all the necessary details. Konrad Graber and Alexandra Post Quillet decided not to stand for re-election to the Board of Directors at the Annual General Meeting on . In addition to Urs Riedener, Nadja Lang was elected to the Board of Directors for the first time. 3.1 Members of the Board of Directors) 13 April 2023 Emmi Group 13 April 2023

Thomas Grüter, Hubert Muff and Werner Weiss are members of the Board of the Central Switzerland Milk Producers Cooperative (ZMP), which supplies a large proportion of its milk to the . ZMP, via its subsidiary ZMP Invest AG, Lucerne, holds a majority stake in Emmi. Emmi Group

Fritz Wyss (born 1944) has been Honorary Chairman of the Emmi Board of Directors since 2010. He was a Delegate of the Board of Directors from 1993 to 2003 and its Chairman from 2003 to 2009.

Members of the Emmi Board of Directors from left (as at the balance sheet date): Hubert Muff, Nadja Lang, Christina Johansson, Dominik Bürgy, Monique Bourquin, Urs Riedener (Chairman of the Board of Directors), Werner Weiss, Thomas Grüter, Diana Strebel, Christa Wey (Secretary of the Board of Directors)

3.1 Members of the Board of Directors

Year of birth Nationality Education First elected
Urs Riedener 1965 Swiss Business Economist lic. oec. HSG 2023 Chairman
Chairman of the Board of Directors MBA Stanford Executive Program
Thomas Grüter 1964 Swiss Swiss Certified Master Farmer 2021
Vice-Chairman of the Board of Di
rectors
Monique Bourquin 1966 Swiss Business Economist lic. oec. HSG 2013
Dominik Bürgy 1966 Swiss Lic.iur., Swiss Certified Tax Expert 2021
Christina Johansson 1966 Swiss/ Business Economist, Master of Science in 2018
Swedish Business Administration & Economics
Nadja Lang 1973 Swiss Certified Business Economist, 2023
ZHAW School of Management and Law
Hubert Muff 1984 Swiss Certified Agrotechnician 2022
Diana Strebel 1960 Swiss Certified oec. Business Economist, Master of 2012
Science in Marketing GSBA and University of
Wales
Werner Weiss 1969 Swiss Certified Farmer 2022

3.2 Professional background and other activities and interests

Urs Riedener

Member and Chairman of the Board of Directors since April 2023

Professional background

2008–2022 Emmi Gruppe, Chief Executive Officer
2000–2008 Migros Cooperative (MGB), Head of Marketing and Member of the Executive Board since 2002
1995–2000 Lindt & Sprüngli Group, both in Switzerland and abroad, various management positions, latterly
National Sales Manager and Member of the Board of Management for Switzerland
1992–1995 Kraft Jacobs Suchard Group, various positions, latterly Group Brand Manager

Other activities and vested interests

since 2023 Sandoz AG, Member of the Board of Directors, Chair HC and ESG Committee
since 2022 Schwarz Unternehmenstreuhand KG, Member of the Advisory Board
since 2014 Bystronic AG, Member of the Board of Directors, Chairman of the Personnel Committee
since 2007 Institute of Marketing at the University of St. Gallen, Member of the Committee

Key competencies

Urs Riedener heads the Board of Directors and possesses extensive international business and management experience. He brings to the Board particular experience and expertise in transformation and internationalisation, marketing activities, supply chain and technology.

Thomas Grüter

Member of the Board of Directors since 2021, Vice-Chairman since 2022

Professional background

since 1996 Sonnhaldenhof, St. Urban, Tenant Farmer and Employer

1990–1996 Uf-Stocken Estate, Kilchberg, Farm Manager, Deputy Farm Manager

1985–1990 Employee on various farms

Other activities and vested interests

since 2021 Central Switzerland Milk Producers Cooperative (ZMP), Chairman

since 2021 Swiss Milk Producers (SMP), Member of the Board

since 2021 Swiss Farmers' Union, Member Chamber of Agriculture and Delegate

since 2015 Cantonal Councillor Lucerne, Member of the Commission for Spatial Planning, Environment and

Energy

Key competencies

Thomas Grüter brings to the Board extensive management experience in a variety of organisations and a background in the agriculture and dairy industry, the Swiss domestic market and politics.

Monique Bourquin

Member of the Board of Directors since 2013

Professional background

2012–2016 Unilever Germany, Austria and Switzerland (D-A-CH), Chief Financial Officer
2002–2012 Unilever Switzerland, latterly Country Manager
1999–2002 Mövenpick Foods Switzerland, latterly Country Manager
1997–1999 Rivella AG, National Account Manager Sales
1994–1997 Knorr Nahrmittel AG, Product Manager Marketing
1990–1994 PriceWaterhouseCoopers, Consulting & Corporate Finance

Other activities and vested interests

since 2023 Swisscom AG, Member of the Board of Directors, Head of the Compensation Committee
since 2023 Lindt & Sprüngli AG, Member of the Board of Directors, Head of the Compensation and
Nomination Committee
since 2023 Rivella AG, Member of the Board of Directors
since 2021 W. Kündig & Cie AG, Member of the Board of Directors
since 2019 Swiss Board Institute, Member of the Advisory Council
since 2018 Swisscontact, Member of the Foundation Board
since 2017 Promarca (Swiss branded goods association), President
since 2017 Kambly AG, Member of the Board of Directors
2019–2023 Weleda AG, Member of the Board of Directors
2017–2023 Swiss Federal Institute of Technology (ETH), Zurich, Lecturer in Change Management

Key competencies

Monique Bourquin possesses extensive international business and management experience in consumer goods companies. In particular, she brings to the Board her expertise and experience in strategy and transformation, marketing/sales, finance, people and culture.

Dominik Bürgy

Member of the Board of Directors since 2021

Professional background

since 2019 Wenger & Vieli, Attorneys at Law, Partner
2009–2012 Ernst & Young, Managing Partner Tax & Legal Switzerland
2008–2016 Ernst & Young, Partner, Member of the Executive Board
2008–2014 Ernst & Young, Member Tax Leadership Team GSA (D-A-CH)
2008–2010 Ernst & Young, People Partner Tax GSA
2002–2019 Ernst & Young, Partner
1993–2002 Arthur Andersen, Tax and Legal Consulting, Partner since 2002

Other activities and vested interests

since 2020 Kuehne + Nagel International AG, Member of the Board of Directors
since 2020 Member of the Board of Directors of privately held companies

Key competencies

Dominik Bürgy brings to the Board his legal expertise, management experience and experience in M&A transactions, governance, supply chain and finance/audit.

Christina Johansson

Member of the Board of Directors since 2018

Professional background

since 2022 Dormakaba, CFO
2018–2022 Bilfinger SE, Group CFO and also CEO ad interim 2021-2022
2016–2018 Bucher Industries Gruppe, Group CFO
2014–2016 SR Technics Group, Group CFO and Deputy Group CEO
2007–2014 Pöyry Energy Business Group and Management Consulting Business Group Switzerland, CFO
2005–2007 Zeag Group, CFO and Deputy CEO
1996–2005 Amcor Rentsch & Closures Group Switzerland/Germany/Canada, Group CFO, previously
Corporate Finance Controller
1993–1996 Securitas Group, Financial Controller and Treasury Manager for Germany and Austria

Other activities and vested interests

since 2021 About You AG, Member of the Supervisory Board and Chairwoman of the Audit Committee

Key competencies

Christina Johansson possesses extensive international business and management experience in technology-orientated companies. In particular, she brings her expertise in the areas of strategy, finance/audit, M&A transactions and governance to the Board of Directors.

Nadja Lang

Member of the Board of Directors since April 2023

Professional background

since 2022 Genossenschaft ZFV-Unternehmungen, CEO and Delegate of the Board of Directors
2019–2022 Genossenschaft ZFV-Unternehmungen , Chairwoman of the Board of Directors, also CEO
2021-2022
2017–2019 Genossenschaft ZFV-Unternehmungen, Member of the Board of Directors
2012–2017 Fairtrade Max Havelaar, CEO Schweiz
2005–2012 Fairtrade Max Havelaar, Marketing/Commercial Director Switzerland, Global Account
Management SteCo Fairtrade International
2003–2005 General Mills Europe Sarl, European Marketing Manager
1999–2003 The Coca-Cola Company, various functions in brand and innovation management

Other activities and vested interests

since 2020 Pax, Swiss Life Insurance Company Ltd, Member of the Board of Directors, Chairwoman of the
Nomination and Compensation Committee
2014–2023 Swiss Post AG, Member of the Board of Directors, Chairwoman of the People, Sustainability,
Governance Committee

Key competencies

Nadja Lang possesses extensive international business and management experience in consumer goods and food service companies. She brings particular expertise to the Board in the areas of strategy and transformation, marketing/ sales and ESG.

Hubert Muff

Member of the Board of Directors since 2022

Professional background

since 2014 Farm in Windblosen Neuenkirch, Manager

2010–2013 Krieger AG Ruswil, Dispatcher

2006–2009 Farm in Windblosen Neuenkirch, Farmer

2006–2007 Baumann Sempach forestry team, Forestry Worker

Other activities and vested interests

since 2021 Central Switzerland Milk Producers Cooperative (ZMP), Member of the Board

since 2014 Windblosen Neuenkirch dairy cooperative, President

Key competencies

Hubert Muff brings to the Board experience of the management of an agricultural business, of associations involved in the agriculture and dairy industry, of the Swiss domestic market, of politics and of implementing alternative energy projects.

Diana Strebel

Member of the Board of Directors since 2012

Professional background

2009–2023 Strebel-Birt AG consultancy firm for brand management, marketing and communications,

Managing Director and Co-founder

2005–2009 Interbrand Zintzmeyer & Lux AG, Managing Director

2005–2009 Interbrand Europa, Chief Operating Officer

1981–2003 Various advertising agencies, including as Deputy CEO at Publicis Group and CEO at Wunderman

AG; Founder and Co-owner of Aebi, Strebel AG

Other activities and vested interests

since 2011 Globalance Bank AG, Vice President of the Board of Directors

since 2009 Ricola AG, Member of the Board of Directors

Key competencies

Diana Strebel possesses extensive international business and management experience. In particular, she brings to the Board her expertise and experience in strategy and transformation, marketing, communications and international expansion.

Werner Weiss

Member of the Board of Directors since 2022

Professional background

since 1992 Family farm in Feldheim Meierskappel, Farm Manager

1991 Farm in Feldheim Meierskappel, Employee

1989–1991 Röllin AG milk transporters in Hirzel, Employee

1990 Eberle Zimmerei Holzbau carpentry firm in Edlibach, Employee

1988–1989 Röllin AG engine overhaulers in Hirzel, Employee

1987 Farm in Moos Hünenberg, Employee

Weitere Tätigkeiten und Interessenbindungen

since 2020 ZMP Invest AG, Member of the Board of Directors

since 2005 Genossenschaft Zentralschweizer Milchproduzenten ZMP, Member of the Board, Member of the

Personnel Committee

Various roles in agricultural organisations in Switzerland and commissions of Meierskappel

municipality and surroundings

Key competencies

Werner Weiss brings to the Board experience of the management of an organic agricultural business, of associations involved in the agriculture and dairy industry, of the Swiss domestic market, of politics and of implementing greening.

Allocation of competences within the Board of Directors

The composition of the Board of Directors ensures that the necessary skills and experience are represented in line with Emmi's status as a listed company, its business portfolio, strategic focus, geographical reach, culture and values. The members of the Board of Directors individually identify their most important competencies, which are based on their educational background, professional experience and personal achievements.

The Board reviews the required areas of competence annually and also assesses individual competencies to ensure that the Board has an appropriate balance of skills, expertise, experience and diversity.

3.3 Permitted number of activities

The members of the Board of Directors may hold a maximum of five mandates in listed legal entities and eight mandates in non-listed legal entities. In practice, the limits permitted by the Articles of Association are far from fully exhausted.

3.4 Election and term of office

The first election of members can be seen in the table in section . The term of office of members of the Emmi Board of Directors is one year and accordingly lasts until the General Meeting 2024. Reelection is permitted, subject to an internal regulation passed by the Board of Directors on age limits and terms of office. The members of the Board of Directors and the Personnel and Compensation Committee are elected by the General Meeting, with the period between one Ordinary General Meeting and the end of the next deemed to be one year. The Chairman is elected by the General Meeting from among the members of the Board of Directors. Elections to the Board of Directors are generally carried out as individual elections. All votes and elections are carried out by open ballot unless a majority requests a secret ballot. 3.1 Members of the Board of Directors

3.5 Internal organisation

3.5.1 Allocation of duties within the Board of Directors

The table below illustrates the areas of responsibility within the Board of Directors.

Audit Committee Market Committee Personnel and
Compensation
Committee		 Agricultural
Council
Urs Riedener • • •
(Chairman)		 •
(Chairman)
Chairman of the Board of Directors
Thomas Grüter • • •
Vice-Chairman of the Board of Directors
Monique Bourquin • • •
Member
Dominik Bürgy •
Member
Christina Johansson •
(Chairwoman)
Member
Nadja Lang •
Member
Hubert Muff • •
Member
Diana Strebel •
(Chairwoman)
Member
Werner Weiss •
Member

The Board of Directors subjects its work and the work of the committees to a self-evaluation once a year. This involves assessing the company's own performance, organisation, work processes, competencies and responsibilities in accordance with the organisational regulations, the composition and diversity of the Board of Directors, the renewal process and cooperation with Group Management. Based on this, the Board of Directors determines any measures that are needed. An external assessment is conducted from time to time, most recently in 2020.

3.5.2 Composition, duties and delimitation of responsibilities of the committees

The composition of the committees and the Agricultural Council (hereinafter the "Council") is shown in the previous table.

The supports the Board of Directors in monitoring the management of the company, in particular from a financial perspective. As a body, it is entitled at any time to inspect all documents necessary for the performance of its duties and to request comprehensive information from all offices in the Group and the external auditors. It comprises at least three members of the Board of Directors, one of whom is the Chairman of the Board of Directors. Its meetings are attended by the CEO, CFO, Head of Group Controlling, Head of internal Audit and, on invitation, the external auditor in charge. Audit Committee

The Audit Committee deliberates on and approves:

  • the auditing plan and the personnel budget of internal audit
  • the appointment and dismissal of the Head of internal audit
  • the audit plan and the remuneration budget for the external auditors
  • the approval of additional consulting engagements to the external auditors once the cumulative fees for consulting engagements during the financial year exceed 30% of the audit fee budget approved for the financial year
  • the auditors for consolidated subsidiaries where these differ from the Group auditors
  • financial instruments and counterparty credit limits for financial transactions.

The Audit Committee assesses the following, in particular, for the Board of Directors in an advisory or preparatory capacity:

  • the fundamental design of the accounting system, organisation and content of financial controlling, including the internal audit
  • the effectiveness and independence of the internal auditors
  • the selection of the Group auditors
  • the effectiveness and independence of the external auditors
  • the results of internal and external audits and the monitoring of action plans by management based on these results
  • the consolidated and annual financial statements of Emmi AG and the results of the subsidiaries
  • the financial ambitions of the Group companies and the Group during the strategy period
  • the target-setting system that serves as a basis for setting annual financial targets
  • the annual financial targets of the Group companies and the Group
  • the total investments for the subsequent year
  • multi-year investment and liquidity planning
  • the rolling forecast
  • risk management
  • evaluation of the main risks and of the measures based on them
  • business relationships with financial institutions
  • financial reporting to shareholders and the public
  • annual reporting on "non-financial issues" and "fulfilment of the due diligence obligation" regarding child labour
  • legal proceedings and out-of-court settlement of disputes whose outcome may have implications for the financial situation of the Group
  • tax rulings (offsets, fines and settlements resulting from tax audits), restructuring and reorganisation rulings with a tax effect on net income of more than CHF 2.0 million.
  • the Audit Committee is authorised to view all documents necessary for the performance of its duties and to request comprehensive information from all areas of the Group, as well as from the external auditors, at any time.

The supports the Board of Directors in monitoring the management of the company, in particular from a medium and long-term perspective. It offers recommendations on the basic organisation of the brand, product and market strategy as preparation for the corporate strategy. It comprises at least three members of the Board of Directors, with one of those members being the Chairman of the Board of Directors. Its meetings are attended by the CEO, Chief Marketing Officer and, on invitation, other members of Group Management and management. The Market Committee has no approval power. Market Committee

The Market Committee assesses or processes the following for the Board of Directors in an advisory or preparatory/ follow-up capacity:

  • the organisation based on the strategy
  • merger and acquisition projects based on the strategy of portfolio development of products and markets
  • strengthening focus areas and innovations based on the strategy
  • preparing strategy reviews and changes
  • the development of key customers and markets as well as critical business units
  • the controlling of major projects and major acquisitions
  • portfolio development of products and markets, not linked to strategy.

The supports the Board of Directors in monitoring the management of the company, in particular from a personnel perspective and regarding compensation topics. It comprises at least three members of the Board of Directors, one of whom is the Chairman of the Board of Directors. Its meetings are attended by the CEO and the Chief Human Resources Officer on invitation. Personnel and Compensation Committee

The Personnel and Compensation Committee deliberates on and approves:

  • the remuneration system for management and employees
  • the remuneration for the Chairman of the Board of Directors, the members of the Agricultural Council, the CEO and the other members of Group Management (taking into account the ceiling amounts approved by the General Meeting)
  • nomination of the employer representation in the Emmi Pension Foundation and the Emmi Welfare Foundation
  • other mandates of the members of the Board of Directors and Group Management.

The Personnel and Compensation Committee elects and removes the members of Group Management and the members of the extended Group Management, with the exception of the CEO.

The Personnel and Compensation Committee assesses or processes the following, in particular, for the Board of Directors in an advisory or preparatory capacity:

  • the remuneration system for the compensation of the Board of Directors
  • special remuneration for members of the Board of Directors tasked with special functions
  • the remuneration system for the compensation of Group Management
  • the ceiling amounts for remuneration of the Board of Directors, the Agricultural Council and Group Management for approval by the General Meeting (see 3.1 Approval model of the General Meeting in the Compensation report)
  • the total amount of salary adjustments and bonuses for employees
  • the composition of Group Management
  • succession planning and the evaluation of candidates for the Board of Directors according to election regulations
  • succession planning for the Chairman of Group Management and, at the request of the CEO, for the members of Group Management
  • the succession planning system in the Emmi Group.

The , which consists of members of the Board of Directors and specialists, supports the Board of Directors in monitoring the management of the company, in particular with regard to milk procurement and agricultural issues. As such, it is not a committee of the Board of Directors, but rather acts as an advisory body. The Agricultural Council comprises at least four individuals, of whom at least three are members of the Board of Directors (the Chairman of the Board of Directors plus two further members). Internal and external experts inform the Agricultural Council about the latest developments and provide its members with advice where necessary. On Emmi's side, the meetings are attended by the CEO, the Executive Vice President Switzerland and the Head of Industrial Business Switzerland as internal experts. The external experts are the Managing Directors of the regional milk producer organisation , which has a stake in Emmi, and the national milk producer organisation . Other members are the presidents of the , the milk producer organisation and the Managing Director of the milk producer organisation. The Agricultural Council has no approval power. Agricultural Council ZMP SMP national milk sector organisation BOM Mittelland Milch mooh

The Agricultural Council assesses or processes the following, in particular, for the Board of Directors in an advisory or preparatory capacity:

  • general political issues
  • the development of the milk and cheese industry and its organisations
  • the volume and price management of milk as a raw material
  • milk and cheese procurement

3.5.3 Working methods of the Board of Directors, its committees and the Advisory Board

As a rule, the Emmi Board of Directors, its committees and the Advisory Board meet as often as business requirements dictate, but at least quarterly. The Personnel and Compensation Committee and the Agricultural Council generally meet twice a year. In the year under review, the Board of Directors held ten half-day meetings and one all-day meeting. The Audit Committee met five times for three hours each, and the Market Committee four times for three hours each. The Personnel and Compensation Committee met three times for two hours each. The meeting durations are averages. Attendance at all meetings of the Board of Directors and its three committees was 100% (see the following table). The Agricultural Council met twice for two hours each.

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Board of Directors Committee Council
Personnel and
Board of Directors Audit Committee Compensation
Committe		 Market Committee Agricultural
Council
Konrad Graber
Chairman until
13.4.2023 3/10 1/5 1/3 1/4 1/2
Urs Riedener
Chairman since
13.4.2023 7/10 4/5 2/3 3/4 1/2
Thomas Grüter
Vice-Chairman 10/10 3/3 4/4 2/2
Monique Bourquin
Member 10/10 3/3 4/4 2/2
Dominik Bürgy
Member 10/10 5/5
Christina
Johansson
Member 10/10 5/5
Nadja Lang
Member since
13.4.2023 7/10 3/4
Hubert Muff
Member 10/10 5/5 2/2
Alexandra Post
Quillet
Member until
13.4.2023 3/10 1/4
Diana Strebel
Member 10/10 4/4
Werner Weiss
Member 10/10 2/2
Pirmin Furrer 2/2
Peter Hegglin 0/2
Stefan Hagenbuch 2/2
Sabrina Schlegel 2/2
René Schwager 1/2

Meetings held by the Board of Directors are also attended by the CEO, the CFO and, depending on the topic, other members of Group Management and management. Certain individual items on the agenda are handled exclusively by the members of the Board of Directors. The entire extended Group Management participates in the strategy meeting held by the Board of Directors. The inclusion of members of Group Management in meetings held by the committees is described for the individual committees in section . The inclusion of members of Group Management in meetings held by the committees is shown for the individual committees. With the exception of the Agricultural Council and Audit Committee, the Emmi Board of Directors holds its meetings without any external experts. An external legal expert was consulted at a meeting of the Board of Directors in 2023. The Chairman of the Board of Directors is a member of all committees for the purposes of coordinating the various committees of the Board of Directors and integrating the Board of Directors as a whole. 3.5 Internal organisation

The chairpersons of the committees report to the Board of Directors at every Board meeting regarding their activities and results, and record details of their consultations and decisions in minutes that are distributed to all members of the Board of Directors. If any important issues arise, the Board of Directors is informed immediately following the meeting.

Overall responsibility for the duties assigned to the committees remains with the Emmi Board of Directors. The decisions of the Board of Directors are made with an absolute majority of the votes cast. In the event of a tied vote, the Chairman has the casting vote.

3.6 Definition of responsibilities between the Board of Directors and Group Management

The is responsible for the overall management of the company and the Group, as well as for monitoring the management of the company in accordance with of the Swiss Code of Obligations. On this basis, it deliberates on and determines issues including: Board of Directors Art. 716a

  • the financial ambitions of the Group companies and the Group during the strategy period
  • the target-setting system that serves as a basis for setting annual financial targets
  • the annual financial targets of the Group companies and the Group
  • the total investments for the subsequent year
  • the annual and half-year results
  • preparing the annual non-financial report and the annual due diligence report regarding child labour
  • the Group structure up to and including Group Management
  • the salary policy, in particular the remuneration system for the compensation of the members of the Board of Directors, the remuneration system for the compensation of Group Management, the total amount of salary adjustments and bonuses for employees
  • ceiling amounts for remuneration of the Board of Directors, the Agricultural Council and Group Management for approval by the General Meeting (for approval model, see sectionin the Compensation report 2023) 3.1 Approval model of the General Meeting
  • the evaluation of the main risks
  • multi-year financial and liquidity planning
  • strategy-relevant cooperations and agreements, in particular the purchase and sale of participations, companies, etc.
  • Group regulations
  • incorporation, merger and dissolution of companies other than wholly-owned companies
  • the approval of members of the Board of Directors of consolidated subsidiaries
  • the nomination of candidates for the Board of Directors for the attention of the General Meeting

All other areas of management that are not reserved for the Board of Directors by law or the ( > Media & Investors > Reports & Downloads > Corporate Governance > Organisational Regulations ) are delegated in full by the Board of Directors to the Chairman, CEO and Group Management. The Board of Directors can, at any time, on a case-by-case basis or on the basis of general powers reserved, intervene in the duties and areas of competence of the corporate bodies that report to it and take over business carried out by these bodies. organisational regulations www.emmi.com Emmi AG

The is the Chairman of Group Management. She leads, supervises and coordinates the members of Group Management and – for Group tasks – of the extended Group Management, and grants them the necessary authority to perform their functions. In particular, she is responsible for implementing strategic objectives, defining operational thrusts and priorities, and providing the necessary material and personnel resources for this purpose. She communicates regularly with the Chairman of the Board of Directors and the Board of Directors as a whole regarding business developments. CEO

The consistently ensure the implementation of strategic Group management. They manage the subsidiaries from a financial point of view and influence their strategic orientation. Their areas of competence and responsibility are determined, in particular, by instructions from the CEO and the approved financial goals by the Board of Directors, as well as by the business strategy defined by the Board of Directors. members of Group Management

The selectively fulfil strategic projects assigned to them by the CEO as part of their activities as long-standing former members of the Executive Board. members of the extended Group Management

3.7 Information and control instruments vis-a-vis Group Management

The Emmi Board of Directors is informed at every meeting by the Chairman, the chairpersons of the committees, the CEO, the CFO and depending on the agenda item by other members of Group Management about current business developments, the financial situation and key business events. Additional information is provided during committee meetings. In the case of significant acquisitions, the Market Committee or delegations from the Board of Directors visit the companies concerned to assess the situation first-hand. The Chairman of the Board of Directors meets with a local Executive Board twice a year on average.

In addition to the meetings, every member of the Board of Directors can, having first informed the Chairman of the Board of Directors accordingly, request information from the members of Group Management about business developments and, with the authorisation of the Chairman, about individual transactions. The Chairman is kept up to date by the CEO on a regular basis, at least once every two weeks, and receives the minutes of all Group Management meetings. He and the CEO ensure an appropriate flow of information between Group Management and the Board of Directors. Members of the Board of Directors are informed immediately of exceptional incidents by means of circular letter.

Additional information and control systems are:

  • Management Information System (MIS): Members of the Board of Directors receive a detailed Group Management Report, containing in-depth information on the company's financial position, on a monthly basis. The members of the Audit Committee receive a quarterly Group Treasury Report. A rolling prognosis for the following 18 months is additionally created at least three times a year. The Board of Directors is sent these documents and informed in detail about their contents.
  • Risk management process: At least once a year, the Board of Directors is informed by the CEO regarding the main risks and their assessment on the basis of relevance and likelihood of occurrence. The Board of Directors approves the risk management measures defined by Group Management for implementation and monitors their progress (see Notes to the consolidated financial statements of the Emmi Group in the Annual Report 2023).
  • External and internal audit: Details of the external auditor are provided in section . Internal Audit is a management tool used by the Board of Directors and Group Management, and as such forms a fundamental part of the internal control system. It is directly associated with the Chairwoman of the Audit Committee, as well as the Audit Committee as a whole, through participation in its meetings, which are held at least quarterly (five meetings in the year under review). The Audit Committee approves the audit programme and the annual planning; it also receives all auditor's reports and is kept informed at its meetings of all findings and the resulting measures. In addition, the Head of internal Audit regularly meets with the Chairwoman of the Audit Committee. 8 Auditors

Internal Audit works in accordance with standards defined in the Audit Manual and carries out audits in the entire Emmi Group. These audits involve assessing the risk potential in corporate governance, business processes and information systems of the company in terms of the reliability and integrity of accounting data and other fundamental information, the efficacy and efficiency of business processes, the securing of tangible and non-tangible business assets, and compliance with laws, ordinances and agreements. Internal Audit also works closely together with the external auditors and carries out special audits at the request of the Audit Committee. It evaluates the effectiveness of the internal and external control systems, as well as the risk management of the . Compliance is also supported and jointly monitored by the Legal department. Emmi Group

4. Group Management

4.1 Members of Group Management

Members of Emmi Group Management from left (as at the balance sheet date): Marc Heim, Raffael Payer, Sacha D. Gerber, Natalie Rüedi, Ricarda Demarmels (CEO), Kai Könecke, Jonas Leu, Robin Barraclough

Year of birth Nationality Education Current function
Ricarda Demarmels 1979 Swiss Business Economist lic. oec. HSG Chief Executive Officer
(CEO)
Marc Heim 1967 Swiss Business Economist lic. oec. HSG Deputy CEO,
Executive Vice President
Switzerland
Robin Barraclough 1967 British/
Swiss		 Economist Executive Vice President
Europe
Sacha D. Gerber 1975 Swiss Certified Business Economist
International Executive MBA HSG
in General Management		 Chief Financial Officer
Kai Könecke 1966 German DiplIng. Mechanical Engineering Chief Supply Chain Officer
Jonas Leu 1983 Swiss Master in Food Science ETH
Stanford Executive Program		 Executive Vice President
Americas
Raffael Payer 1981 Swiss Master of Arts in Strategy & International
Management HSG		 Chief Marketing Officer
Natalie Rüedi 1971 Swiss Certified Primary School Teacher
EMBA, Lucerne University of Applied Sci
ences and Arts		 Chief Human Resources
Officer

4.2 Professional background and other activities and interests

Ricarda Demarmels

CEO and Chairwoman of Group Management since 2023, Member of Group Management since 2019

Professional background

2019–2022 Emmi Group, Chief Financial Officer 2015–2018 ORIOR Group, Chief Financial Officer

2009–2014 Capvis Equity Partners Switzerland, Investment Director 2005–2009 Oliver Wyman Financial Services, Project Manager

2002–2003 Swiss National Bank, Research Assistant

Other activities and vested interests

since 2018 Sensirion AG, Member of the Board of Directors, Chairwoman of the Audit Committee and

Chairwoman of the Independent Directors' Committee

Marc Heim

Executive Vice President Switzerland and Deputy CEO since 2017, Member of Group Management since 2009

Professional background

2014–2016 Emmi Group, Executive Vice President Europe

2009–2013 Emmi Group, Head of Sales

2004–2009 Halter Bonbons AG, Managing Director 1999–2004 Kambly AG, various management roles

1992–1999 Effems AG (now Mars Schweiz AG), various positions

Other activities and vested interests

since 2023 Reitzel Group, Member of the Board of Directors

since 2022 Promarca (Swiss branded goods association), Member of the Executive Committee

since 2022 Foodward, Member of the Council

Robin Barraclough

Executive Vice President Europe since 2017, Member of Group Management since 2009

Professional background

2014–2016 Emmi Group, Chief Marketing Officer 2009–2014 Emmi Group, Head of Marketing

2008 Kraft Foods, managing the coffee business in the German-speaking parts of Europe

1991–2007 Mars Incorporated, various managerial marketing roles at national and international level, latterly

Senior Member of the Marketing Leadership Team at the European Masterfoods headquarters in

Bremen (Germany)

Sacha D. Gerber

Chief Financial Officer and Member of Group Management since June 2023

Professional background

2018–2023 Calida Group, Group Chief Financial Officer
2016–2018 Hero AG, Member of the Executive Board, Chief Financial Officer/Chief Operating Officer & Head
of BU Foodservice
2013–2016 Hero AG, Member of the Executive Board, Chief Financial Officer/Chief Operating Officer
2010–2012 Hero AG, Member of the Executive Board, Chief Financial Officer
2002–2010 Swatch Group, financial roles in various Group companies, including Chief Financial Officer for
Microcomponents SA, Michel Präzisionstechnik AG, Meco AG
2000–2002 Credit Suisse, Recovery Manager

Kai Könecke

Chief Supply Chain Officer and Member of Group Management since 2017

Professional background

2012–2016 Unilever Germany-Austria-Switzerland, Managing Director Supply Chain (D-A-CH)
2011–2012 Amazon, General Manager, Fulfillment Center Rheinberg (Germany)
2006–2011 Mars (Effems) Germany, Plant Director of the facility in Viersen (Germany)
1993–2006 Mars (Effems) Germany, various roles in Supply Chain, including Head of Logistics Germany and
Head of Development of Supply Chain Management Europe

Jonas Leu

Executive Vice President Americas and Member of Group Management since 2022

Professional background

2021 Emmi Group, Deputy Executive Vice President Americas 2020 Emmi Group, Managing Director Quillayes Surlat SpA, Chile 2016–2019 Emmi Group, Managing Director Surlat Corporación SA, Chile 2013–2016 Emmi Group, Industry Manager Kaiku, Spain 2011–2012 Emmi Group, Managing Director of Nutrifrais SA, Geneva 1999–2011 Emmi Group, apprenticeship and various roles in production, quality management, development and engineering at different national locations

Raffael Payer

Chief Marketing Officer and Member of Group Management since October 2023

Professional background

2022–2023 Ghirardelli Chocolate Company, USA, Vice President of Restaurant, Retail & E-Commerce
2019–2022 Ghirardelli
2016–2019 Lindt & Sprüngli, Russia, Marketing Director
2014–2016 Mars Schweiz AG, Key Account Manager
2012–2014 Mars Schweiz AG, Group Brand Manager Bars
2011–2012 Mars Schweiz AG, Brand Manager Bars

Natalie Rüedi

Chief Human Resources Officer since 2014, Member of Group Management since 2011

Professional background

2009–2013 Emmi Group, Head of Human Resources, Member of extended Group Management until 2010

2004–2009 Emmi Group, responsible for developing and heading up staff development

2000–2004 Emmi Group, Human Resources Specialist

1992–2000 Teacher and headmistress at a primary school

Other activities and vested interests

since 2020 OPES Holding SA and OPES SA, Member of the Board of Directors

Members of the extended Group Management

Matthias Kunz

Deputy Executive Vice President Americas and Member of the extended Group Management since 2022

Professional background

2002–2021 Emmi Group, Member of Group Management
2014–2021 Emmi Group, Executive Vice President Americas
2009–2013 Emmi Group, Head of International Division
2002–2009 Emmi Group, Head of International Cheese Division
1999–2002 Swiss Dairy Food, Member of Group Management
1997–1999 Toni International AG, Managing Director

4.3 Permitted number of activities

The members of Group Management may hold a maximum of two mandates in listed and five mandates in non-listed legal entities. In practice, the limits permitted by the Articles of Association are far from fully exhausted.

4.4 Management contracts

No management contracts exist.

5. Compensation, participations and loans

Information on remuneration, the definition process, statutory rules, participations, and loans and credits to members of the Board of Directors, Agricultural Council and Group Management can be found in the Compensation report (see Compensation report 2023).

6. Shareholders' rights of co-determination

6.1 Restrictions on voting rights and proxies

Emmi's Articles of Association contain no restrictions on voting rights. A shareholder who has voting rights may represent their shares themselves at the General Meeting or grant a power of attorney in writing to a representative of their choice or the independent proxy. Power of attorney and instructions to the independent proxy may be issued electronically.

6.2 Statutory quorum

Unless the law stipulates otherwise, the General Meeting passes its resolutions and performs its elections by a majority of the voting rights represented. In addition to the legal exceptions, the resolution concerning the amendment of the provision of the Articles of Association relating to the restrictions on registration (see section ) also requires at least two-thirds of voting rights represented and the majority of shares represented. 2.6 Restrictions on transferability and nominee registration

6.3 Convening of the General Meeting

The Ordinary General Meeting takes place annually, at the latest six months after the end of the financial year. It is convened by the Board of Directors. The procedure for convening Extraordinary General Meetings is governed by the applicable legal provisions.

The Board of Directors decides whether a General Meeting is held physically or virtually, by electronic means, and whether shareholders who do not attend a physical General Meeting can exercise their rights electronically.

6.4 Agenda

Shareholders who individually or jointly represent at least 0.5% of the share capital or votes can request that items be placed on the agenda at the General Meeting. Such requests must be submitted to the Board of Directors in writing at least 45 days before the General Meeting, citing the motions concerned.

6.5 Entries in the share register

The share register is usually closed ten days prior to the General Meeting. The Board of Directors may approve exceptional subsequent entries on request. The effective closing date is published in the invitation to the General Meeting and in good time in the financial calendar on the Emmi website at:

www.emmi.com > Media & Investors > Financial calendar

7. Change of control/Defensive measures

7.1 Obligatory offer

Emmi's Articles of Association include neither an "opting up" clause pursuant to nor an "opting out" clause pursuant toregarding the legal obligation to make a takeover bid. Art. 135 (1) FinMIA Art. 125 (4) FinMIA

7.2 Change-of-control clauses

No contractual agreements exist either for members of the Board of Directors, members of Group Management or other management members in the event of a change in the controlling majority stake.

8. Auditors

8.1 Duration of the mandate and term of the Auditor in Charge

At the General Meeting 2014, KPMG, Lucerne, was elected as the new auditors for one financial year. Since then, they have been re-elected annually. According to the Articles of Association, their term ends with the approval of the financial statements for the relevant financial year. The Auditor in Charge, François Rouiller, has been in office since the General Meeting 2021. According to the provisions of the Swiss Code of Obligations, he may execute this mandate for a maximum of seven years.

8.2 Audit fees

For the year under review, the agreed audit fees for the performance of their mandate as statutory auditors (including the audit of the consolidated financial statements) amounted to a total of KCHF 1,416.

8.3 Additional fees

During the year under review, KPMG charged a total of for additional services beyond the scope of their statutory mandate. These fees included for audit related services, for tax advice and KCHF 152 for other consulting services. KCHF 411 KCHF 100 KCHF 159

8.4 Information tools used by the external auditors

The supervision and monitoring of the auditors is exercised by the full Board of Directors. The Board of Directors' Audit Committee assesses the performance, invoicing and independence of the external auditors and provides the Board of Directors with corresponding recommendations. It also annually reviews the scope of the audit, the audit plans and the relevant procedures, and discusses the audit reports with the Auditor in Charge. Details of the term of the Auditor in Charge can be found in section . The report on the final audit of the annual accounts is also sent to all members of the Board of Directors for the final approval of the Annual Report. The Auditor in Charge attended three meetings of the Audit Committee in the year under review. Details on internal Audit are provided in section . 8.1 3.7 Information and control instruments vis-a-vis Group Management

9. Information policy

Emmi strives to maintain open and ongoing communication with shareholders, existing and potential investors, and other stakeholder groups. Emmi aims to provide rapid, real-time and transparent information about the company, its strategy and business developments, and to offer a truthful picture of Emmi's performance in the past and the present, as well as its future prospects. This picture is intended to reflect the assessment of the current situation of the company by Group Management and the Board of Directors. Investor Relations guidelines:

Emmi publishes an extensive Annual Report every year that presents operating activities, corporate governance and financial reporting for the current year, drafted and audited in accordance with. A half-year report is also published. Methodology: Swiss GAAP FER

Furthermore, media releases are published about events relevant to the share price, such as acquisitions, minority or majority shareholdings, joint ventures and alliances in accordance with guidelines relating to ad-hoc publicity. Important announcements, in particular half- and full-year results, are accompanied by presentations together with press and analyst conferences or analyst calls.

Emmi meets during the course of the year with institutional investors both in Switzerland and abroad, presents its published results on a regular basis, organises road shows and holds meetings with individual institutional investors and groups. The main point of contact for these meetings and presentations is the Head of Investor Relations. The meetings and presentations focus on Emmi's financial results, its strategic orientation and the current initiatives of the Group.

Emmi uses the Internet in order to ensure rapid, real-time and consistent distribution of information. The company's website features an electronic information tool that enables shareholders and other interested parties to add their names to an electronic distribution list: www.emmi.com > Media & Investors > Emmi News Service

Media releases and investor information can be accessed via the following link: www.emmi.com > Media & Investors > Media Releases

Notifications to SIX Exchange Regulation of participations that exceed the level at which notification becomes obligatory can be found via the following link: > Market Data > Shares > List of Equity Issuers > Symbol, Company = Emmi (magnifying glass) > www.six-group.com Emmi AG

Contact for Investor Relations: Emmi Management AG, Corporate Communications & IR, Landenbergstrasse 1, P.O. Box 230, CH-6002 Lucerne, Phone +41 58 227 50 69, E-mail [email protected], www.emmi.com

Important dates:

  • The annual results press conference on the occasion of the publication of the annual results is scheduled for 29 February 2024.
  • The General Meeting will take place on 11 April 2024. All registered shareholders will receive an invitation to the General Meeting by post.
  • The next business results (half-year results 2024) will be published on 14 August 2024.

10. Trading blackout periods

For members of the Board of Directors, Group Management and the global management teams (management level 2) and other selected employees – primarily from the Finance and Corporate Communications departments – a general ban on trading in Emmi shares, bonds, options and derivatives applies for a defined period prior to the publication of the annual and half-year results. These general trading blackout periods extend from the first working day in January and July until after publication of the annual and half-year results. No exceptions are foreseen.

Contents

Compensation report

1. Guidelines

Productive employees with integrity are the key factor in Emmi's success. They enable objectives to be met through their commitment, mutual respect and honest business practices. In this way, they contribute to the sustainable growth of the Group. Remuneration is only one part of the overall reward: respect, meaningful work, responsible organisation of the working environment and opportunities for further development are just as important.

The Board of Directors supports employees and thus the corporate strategy with an appropriate remuneration policy, i.e. one that is performance-focused and in line with market conditions and that incorporates the company's commercial development. Basic remuneration should reflect the requirements, skills and responsibilities of the respective role, as well as the performance and conduct of the employee. In addition, it should provide income security. The variable remuneration component at management level strengthens shared responsibility. It focuses performance and conduct on sustainable business development and provides the opportunity to share in the company's success.

The Board of Directors firmly believes that the aforementioned factors improve and reward job motivation while at the same time reflecting Emmi's corporate values. It therefore considers a share and option programme to be unnecessary at present, also with a view to a simple and transparent remuneration system.

With regard to the remuneration of the company's management, ( > Download-Center > Corporate Governance > Articles of Association (in German)) states: Remuneration of members of the Board of Directors, Group Management and any advisory body should be adequate, competitive and performance-based and should be determined in accordance with the strategic objectives and success of the . Article 31 (1) of the Articles of Association of Emmi AG report.emmi.com Emmi AG Emmi Group

2. Remuneration system

2.1 Remuneration components

The remuneration of the Board of Directors and the Agricultural Council is a fixed remuneration. The remuneration of Group Management comprises a fixed and a variable component. Variable means: depending on success and performance in the previous financial year in connection with defined objectives ("bonus"). The variable remuneration of a member of Group Management may not exceed the member's fixed remuneration. No long-term variable component has been implemented. For further information on this topic see section . 2.3 Remuneration of Group Management

According to ( > Download-Center > Corporate Governance > Articles of Association (in German)), the company can issue equity securities, conversion or option rights, or other rights to equity securities to members of the Board of Directors, the Agricultural Council and Group Management as part of their remuneration. Emmi currently intentionally forgoes share or option plans or other share ownership programmes. This is intended to ensure that the remuneration system remains straightforward and transparent. Article 31 (3) of the Articles of Association of Emmi AG report.emmi.com Emmi AG

2.2 Remuneration of the Board of Directors and the Agricultural Council

The remuneration of members of the Board of Directors and the Agricultural Council is not related to performance. It is therefore purely basic remuneration, which is paid in cash. It comprises a basic salary and compensation for attending meetings. The amount of the remuneration reflects the time and work which the members invest to fulfil their duties in the Board of Directors, the Agricultural Council and the three committees, as well as in the two pension fund foundations. In particular, the members of the Board of Directors and the Agricultural Council do not receive any bonus payments or other financial benefits such as employee terms and conditions or discounted share options. They have no entitlement to services or non-cash benefits.

Once a year, the Personnel and Compensation Committee assesses the remuneration of the Board of Directors compared to listed (small cap) and private Swiss companies. The Committee takes into account companies from the consumer goods sector with a similar level of internationalisation, together with firms based in the region from various sectors and of different sizes. Approximately 20 companies meeting the criteria given above, primarily from the food, machinery, plastics and retail industries, served as the comparison group. In addition, the Committee has access to an external benchmark study from 2021 which compared the remuneration of the Emmi Board of Directors with external salaries and analysed whether the current remuneration and remuneration structure were in line with the market.

The basic remuneration and social security contributions as set out in the table in section are components of the fixed remuneration. The General Meeting approves this fixed remuneration as a maximum ceiling amount for the current financial year. 6 Remuneration for the year under review

2.3 Remuneration of Group Management

Remuneration of the members of Group Management comprises a fixed and a variable remuneration component (short-term bonus). Both components are paid in cash.

The basic remuneration reflects the experience, knowledge and continuing performance of members of Group Management as well as the competitiveness in external market comparisons based on function-related salary benchmarks. The Personnel and Compensation Committee has access to a current external study from 2021 for the purpose of comparing the adequacy and competitiveness of the total remuneration. The same comparison group was used for the function-related salary benchmark and for the assessment of the remuneration of the Board of Directors.

The basic remuneration, non-cash benefits (company car) and relevant social security and pension benefits as set out in the table in section are components of the fixed remuneration. The General Meeting approves this fixed remuneration prospectively as a maximum ceiling amount for the coming financial year. 6 Remuneration for the year under review

The Personnel and Compensation Committee decides the fixed remuneration of the CEO and other members of Group Management for the following year, taking into account the maximum ceiling amount approved by the General Meeting.

Variable remuneration: (> Download-Center > Corporate Governance > Articles of Association (in German)) states that the variable remuneration paid to a member of Group Management must not exceed the member's fixed remuneration. This is a bonus based on achievement of performance targets, which is paid in cash. The amount reflects the result of the previous financial year and comprises the following three criteria: Article 31 (2) of the Articles of Association of Emmi AG report.emmi.com Emmi AG

  • Group performance (weighting 50%)
  • business area performance (weighting 30%)
  • achievement of individual performance targets (weighting 20%)

The measurement of business performance is based on the three pillars of sales, income and market share. For service areas, the relevant targets also relate to ongoing development with a view to providing the core business with continuously better support.

The non-achievement of targets may lead to this remuneration not being paid at all in extreme cases; in the event of over achievement of targets, it can increase up to a maximum of 120% of the target amount. The variable remuneration of the CEO and the other members of Group Management is agreed by the Personnel and Compensation Committee in connection with the business results. The General Meeting approves the total variable remuneration from the previous financial year.

3. Responsibilities and definition process

3.1 Approval model of the General Meeting

( > Download-Center > Corporate Governance > Articles of Association Emmi AG (in German)) defines the approval model. Each year, the General Meeting approves in a separate and binding manner the proposals put forward by the Board of Directors with regard to: Article 34 (1) of the Articles of Association of Emmi AG report.emmi.com

  • the maximum total amount of remuneration of the Board of Directors and the Agricultural Council for the current financial year
  • the maximum total amount of fixed remuneration for Group Management for the following financial year
  • the total amount of variable remuneration for Group Management for the previous financial year

The following clarifies on which remuneration components and for which period the shareholders will vote on at the Ordinary General Meeting 2024. approval model

Financial year 2023 Financial year 2024 Financial year 2025
General Meeting 2024
Group Management variable Board of Directors fixed / Group Management fixed
Total amount of variable remuneration Agricultural Council fixed Maximum total amount of fixed
for members of Group Management for Maximum total amount of fixed remu- remuneration for members of Group
financial year 2023 neration for members of the Board of Management for financial year 2025
Directors and members of the Agricultural
Council for financial year 2024

3.2 Decision-making process

The Board of Directors determines the principles of the remuneration system for the Board of Directors and Group Management as part of its general overall management. The Personnel and Compensation Committee undertakes its regular review and assessment. In this respect, it supports the Board of Directors in determining the remuneration system. External experts would only be involved at most in a fundamental restructuring of the remuneration system. Remuneration system:

The Personnel and Compensation Committee submits a proposal for the remuneration of the members of the Board of Directors to the Board of Directors. The Board of Directors decides annually on its remuneration and submits the maximum total remuneration to the General Meeting for approval. Remuneration amounts:

The remuneration for the Chairman of the Board of Directors, the members of the Agricultural Council, the CEO and the other members of Group Management is decided annually by the Personnel and Compensation Committee. The Board of Directors proposes the total amounts of the relevant remuneration to the General Meeting for approval.

3.3 Personnel and Compensation Committee

With the exception of the remuneration of the members of the Board of Directors, the Personnel and Compensation Committee decides on remuneration. It defines the remuneration of the Chairman of the Board of Directors and CEO (associate member) in compliance with the rules on abstention.

Composition of the Personnel and Compensation Committee

Election by the General Meeting 2023 until the General Meeting 2024.

Urs Riedener Independent Member and Chairman of the Board of Directors
Chairman
Monique Bourquin Independent Member of the Board of Directors
Member
Thomas Grüter Independent Member and Vice-Chairman of the Board of Directors
Member

4. Loans and credits

( Download-Center > Corporate Governance > Articles of Association Emmi AG (in German)) stipulates that the members of the Board of Directors, Agricultural Council and Group Management may be granted advance payments up to a maximum of , in particular in the form of advances on costs for litigation connected to the activity of the person concerned as a member of the Board of Directors, Agricultural Council or Group Management. These limits were not utilised in the financial year. Article 32 (2) of the Articles of Association of Emmi AG report.emmi.com KCHF 1,000

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5. Proposals to the General Meeting

The proposed total amounts ensure the required level of entrepreneurial flexibility to be able to react to changes (additional members of the Board of Directors, Agricultural Council and Group Management; transfers in committees; extraordinary occurrences; general reserve). There is no intention to use up the full ceiling amounts. ( > Download-Center > Corporate Governance > Articles of Association Emmi AG (in German) provides for an additional amount of a maximum of 20% if additional or replacement members are appointed to Group Management following approval of the fixed remuneration. Article 34 (3) of the Articles of Association of Emmi AG report.emmi.com

All amounts mentioned under point 5 are in KCHF.

5.1 Board of Directors

Approval of the total amount of fixed remuneration of the Board of Directors up to a maximum of for financial year 2024. KCHF 1,300

Proposal to GM 2024
for full year 2024		 Remuneration paid 2023
(see section 6)		 Proposal to GM 2023
for full year 2023
1,300 1,243 1,300
(ceiling amount) (ceiling amount)

5.2 Agricultural Council

Approval of the total amount of fixed remuneration of the Agricultural Council up to a maximum of for financial year 2024. KCHF 40

Proposal to GM 2024
for full year 2024		 Remuneration paid 2023
(see section 6)		 Proposal to GM 2023
for full year 2023
40 33 40
(ceiling amount) (ceiling amount)

5.3 Group Management fixed remuneration

Approval of the total amount of fixed remuneration of Group Management up to a maximum of for financial year 2025. KCHF 5,540

Proposal to GM 2024
for full year 2025		 Proposal to GM 2023
for full year 2024		 Fixed remuneration paid 2023
(see section 6)		 Proposal to GM 2022
for full year 2023
5,540 5,200 4,523 5,540
(ceiling amount) (ceiling amount) (ceiling amount)

5.4 Group Management variable remuneration

Approval of the total amount of variable remuneration of Group Management of KCHF 1,279 for financial year 2023.

Proposal to GM 2024
for full year 2023 Variable remuneration 2022 Proposal to GM 2023
(see section 6) paid in 2023 for full year 2022
1,279 1,189 1,189

6. Remuneration for the year under review

in CHF 000s

Fixed remuneration Variable remuneration
Basic Non-cash Other Total Total Total
fixed and		 Total
previous
Board of Directors remuneration1) benefits remuneration2) fixed 3) Bonus1) variable variable year
Urs Riedener
Chairman
(since 13.4.2023) 249 – 43 292 – – 292 n/a
Thomas Grüter
Vice-Chairman 97 – 25 122 – – 122 115
Monique Bourquin
Member 78 – 28 106 – – 106 117
Dominik Bürgy
Member 64 – 17 81 – – 81 86
Konrad Graber
Chairman
(until 13.4.2023) 169 – 29 198 – – 198 314
Christina Johansson
Member 75 – 20 95 – – 95 109
Nadja Lang
Member (since 13.4.2023) 52 – 14 66 – – 66 n/a
Hubert Muff
Member (since 7.4.2022) 66 – 18 84 – – 84 69
Thomas Oehen-Bühlmann
Vice-Chairman
(until 7.4.2022) – – – – – – n/a 64
Alexandra Post Quillet
Member (until 13.4.2023) 34 – 1 35 – – 35 82
Franz Steiger
Member (until 7.4.2022) – – – – – – n/a 41
Diana Strebel
Member 71 – 20 91 – – 91 92
Werner Weiss
Member (since 7.4.2022) 57 – 16 73 – – 73 60
Total Board of Directors 1,012 – 231 1,243 – – 1,243 1,149
Agricultural Council
Pirmin Furrer 6 – 1 7 – – 7 7
Stephan Hagenbuch 7 – – 7 – – 7 7
Peter Hegglin 4 – 1 5 – – 5 7
Andreas Hitz (until 30.6.2022) – – – – – – n/a 4
Sabrina Schlegel
(since 1.7.2022) 6 – 2 8 – – 8 4
René Schwager 6 – – 6 – – 6 7
Total Agricultural Council 29 – 4 33 – – 33 36
Group Management
Ricarda Demarmels, CEO
(since 1.1.2023) 706 5 170 881 368 368 1,249 n/a
Urs Riedener, CEO
(until 31.12.2022) – – – – – – n/a 1,676
Other members 2,750 26 866 3,642 911 911 4,553 4,151
Total Group Management 3,456 31 1,036 4,523 1,279 1,2794) 5,802 5,827

1) Basic remuneration and bonuses comprise payments already made or still to be made and social security and pension contributions made by the employee.

2) Other compensation comprises all additional benefits, such as pensions, child allowances and mandatory social security contributions made by the employer that are currently paid to the Board of Directors or to the members of Group Management directly or that will be paid to them at a later stage after the end of their employment.

3) The remuneration of the Board of Directors also includes work in the committees, in the Agricultural Council (see Corporate Governance report for allocation of duties) and in the two pension fund foundations. Emmi Group employees who are members of the Agricultural Council do not receive any compensation for their work on the Agricultural Council.

4) Subject to approval by the General Meeting.

Loans and credits in the year under review

No loans or credits were granted or made to members of the Board of Directors, Agricultural Council or Group Management in the year under review, and none were outstanding as at 31 December 2023. In addition, no loans or credits have been granted to former members of the Board of Directors, Agricultural Council or Group Management, or to related parties of current or former members of the Board of Directors, Agricultural Council or Group Management, and none were outstanding as at 31 December 2023.

7. Participations of members of the Board of Directors, the Council and Group Management

As at 31 December 2023, individual members of the Board of Directors, the Agricultural Council and Group Management (including affiliated persons) held the following number of shares in the company:

Board of Directors No. of shares
31.12.2023		 No. of shares
31.12.2022
Urs Riedener, Chairman (since 13.4.2023) – n/a
Thomas Grüter, Vice-Chairman – –
Monique Bourquin, Member – –
Dominik Bürgy, Member – –
Konrad Graber, Chairman (until 13.4.2023) n/a 960
Christina Johansson, Member – –
Nadja Lang, Member (since 13.4.2023) – n/a
Hubert Muff, Member – –
Alexandra Post Quillet, Member (until 13.4.2023) n/a –
Diana Strebel, Member – –
Werner Weiss, Member 58 58
Agricultural Council
Pirmin Furrer – –
Stephan Hagenbuch 50 50
Peter Hegglin – –
Sabrina Schlegel – –
René Schwager – –
Group Management
Ricarda Demarmels, Member (until 31.12.2022), CEO (since 1.1.2023) – –
Marc Heim, Deputy CEO 150 150
Robin Barraclough, Member 20 20
Sacha D. Gerber, Member – n/a
Kai Könecke, Member – –
Jonas Leu, Member – –
Thomas Morf, Member (until 31.8.2023) n/a –
Raffael Payer, Member (since 1.10.2023) – n/a
Urs Riedener, CEO (until 31.12.2022) n/a –
Natalie Rüedi, Member – –

The members of the Board of Directors, the Agricultural Council and the Group Management own a total of 278 shares (previous year: 1,238 shares) and thus hold 0.01% of the voting rights (previous year: 0.02%).

8. Other mandates

In accordance withof the Swiss Code of Obligations, the following list shows all other mandates which the members of the Board of Directors, the Agricultural Council and Group Management have in comparable functions in other companies with an economic purpose within the meaning ofof the Swiss Code of Obligations: Art. 734e Art. 626 para. 2 (1)

8.1 Board of Directors

Urs Riedener

since 2023 Sandoz AG, Member of the Board of Directors, Chair HC & ESG Committee
since 2022 Schwarz Unternehmenstreuhand KG, Member of the Advisory Board
since 2014 Bystronic AG (formerly Conzetta), Member of the Board of Directors, Chairman of the Personnel
Committee

Thomas Grüter

since 2021 Central Switzerland Milk Producers Cooperative (ZMP), Chairman
since 2021 Swiss Milk Producers (SMP), Member of the Board
since 2021 Swiss Farmers' Union, Member Chamber of Agriculture and Delegate
since 1996 Sonnhaldenhof St. Urban, Tenant Farmer and Employer

Monique Bourquin

since 2023 Swisscom AG, Member of the Board of Directors, Chair of the Compensation Committee
since 2023 Lindt & Sprüngli AG, Member of the Board of Directors, Chairwoman of the Compensation and
Nomination Committee
since 2023 Rivella AG, Member of the Board of Directors
since 2021 W. Kündig & Cie AG, Member of the Board of Directors
since 2017 Promarca (Swiss branded goods association), President
since 2017 Kambly AG, Member of the Board of Directors
2019–2023 Weleda AG, Member of the Board of Directors

Dominik Bürgy

since 2022
Logad Holding AG, Member of the Board of Directors
since 2022
Oritor AG, Member of the Board of Directors
since 2022
Ormand AG, Member of the Board of Directors
since 2020
Kuehne + Nagel International AG, Member of the Board of Directors
since 2020
Arban AG, Member of the Board of Directors
since 2019
Wenger & Vieli, Attorneys at Law, Partner
since 2019
Edelweiss AG, Member of the Board of Directors

Christina Johansson

since 2022 Dormakaba AG, CFO
since 2021 About You AG, Member of the Supervisory Board and Chairwoman of the Audit Committee

Nadja Lang

since 2022 Genossenschaft ZFV-Unternehmungen, CEO and Delegate of the Board of Directors
since 2020 Pax, Swiss Life Insurance Company Ltd, Member of the Board of Directors, Chairwoman of the
Nomination and Compensation Committee
2014–2023 Swiss Post AG, Member of the Board of Directors, Chairwoman of the People, Sustainability,
Governance Committee

Hubert Muff

since 2021 Central Switzerland Milk Producers Cooperative (ZMP), Member of the Board
since 2014 Windblosen Neuenkirch dairy cooperative, President
since 2014 Farm in Windblosen Neuenkirch, Manager

Diana Strebel

since 2011 Globalance Bank AG, Vice President of the Board of Directors

since 2009 Ricola AG, Member of the Board of Directors

2009–2023 Strebel-Birt AG consultancy firm for brand management, marketing and communications,

Managing Director and Co-founder

Werner Weiss

since 2020 ZMP Invest AG, Member of the Board of Directors

since 2005 Genossenschaft Zentralschweizer Milchproduzenten ZMP, Member of the Board, Member of the

Personnel Committee

since 1992 Family farm in Feldheim Meierskappel, Farm Manager

8.2 Agricultural Council

Pirmin Furrer

since 2020 ZMP Invest AG, Managing Director

since 2010 Neue Napfmilch AG, Member of the Board of Directors since 2010 Central Switzerland Milk Producers Cooperative (ZMP)

Stephan Hagenbuch

since 2022 Floralp GmbH, Member of the Board of Directors
since 2018 Landwirtschaftlicher Informationsdienst, Chairman
since 2018 Liebefeld Kulturen AG, Member of the Board Directors
since 2017 Swiss Farmers' Union, Member of the Chamber of Agriculture
since 2017 Schweizer Agrarmedien AG, Member of the Board of Directors
since 2017 BO Butter GmbH, Member of the Board of Directors
since 2017 Agro Marketing Suisse, Member of the Board of Directors
since 2017 TSM Treuhand GmbH, Member of the Board of Directors
since 2012 Branchenorganisation Milch, Member of the Board of Directors
since 2012 Vorsorge- und Zusatzstiftung SMP, Foundation Board
since 2006 Stiftung Fonds für Appenzeller Käse, Foundation Board
since 2006 Sortenorganisation Appenzeller Käse GmbH, Member of the Board of Directors

Peter Hegglin

since 2022 santesuisse, Member of the Board of Directors
since 2020 Hürlimann AG, Member of the Board of Directors
since 2017 RVK Rück AG, Chairman of the Board of Directors

Sabrina Schlegel

since 2022 SMP, Member of the Board of Directors
since 2022 Mittelland Milch, Chairwoman of the Board of Directors
since 2022 Chamber of Agriculture (LaKa), Member
since 2017 Vital AG, Member of the Board of Directors

René Schwager

since 2019 mooh Genossenschaft, Managing Director
since 2016 swissmooh AG, Delegate of the Board of Directors
since 2016 swissmoh Qingdao Ltd., Executive Director
since 2016 Käserei Laubbach AG, Delegate of the Board of Directors
since 2009 Milk sector organisation (BOM), Member of the Board of Directors

8.3 Group Management

Ricarda Demarmels

since 2018 Sensirion AG, Member of the Board of Directors, Chairwoman of the Audit Committee and

Chairwoman of the Independent Directors' Committee

Marc Heim

since 2023 Reitzel Group, Member of the Board of Directors
since 2022 Promarca (Swiss branded goods association), Member of the Executive Committee
since 2022 Foodward, Member of the Council

Robin Barraclough

since 2008 Prokopsche Family Foundation (Traismauer, Austria), Foundation Board
------------ -- -----------------------------------------------------------------------

Natalie Rüedi

since 2020 OPES Holding SA and OPES SA, Member of the Board of Directors

8.4 Extended Group Management

Matthias Kunz

since 2022 Pasta Röthlin AG, Member of the Board of Directors
since 2009 Kunz Kunath AG, Member of the Board of Directors
since 2006 Kunz Kunath Holding AG, Member of the Board of Directors

9. Auditor's report

Report of the statutory auditor

To the General Meeting of Emmi AG, Luzern

Report on the Audit of the Compensation Report

Opinion

We have audited the Compensation Report of Emmi AG (the Company) for the year ended 31 December 2023. The audit was limited to the information pursuant to Art. 734a-734f of the Swiss Code of Obligations (CO) in the chapters «6. Remuneration for the year under review», «7. Participations of members of the Board of Directors, the Council and Group Management» and «8. Other mandates» on pages 76 to 84 of the Compensation Report.

In our opinion, the information pursuant to Art. 734a-734f CO in the accompanying Compensation Report complies with Swiss law and the Company's articles of incorporation.

Basis for Opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's Responsibilities for the Audit of the Compensation Report" section of our report. We are independent of the Company in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the chapters «6. Remuneration for the year under review», «7. Participations of members of the Board of Directors, the Council and Group Management» and «8. Other mandates» in the Compensation Report, the consolidated financial statements, the stand-alone financial statements and our auditor's reports thereon.

Our opinion on the Compensation Report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Compensation Report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the audited financial information in the Compensation Report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' Responsibilities for the Compensation Report

The Board of Directors is responsible for the preparation of a Compensation Report in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of a Compensation Report that is free from material

misstatement, whether due to fraud or error. The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.

Auditor's Responsibilities for the Audit of the Compensation Report

{{Signatureleft}} {{Signatureright}}

Our objectives are to obtain reasonable assurance about whether the information pursuant to Art. 734a-734f CO is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Compensation Report.

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:

  • − Identify and assess the risks of material misstatement in the Compensation Report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • − Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
  • − Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

KPMG AG

François Rouiller Licensed Audit Expert Auditor in Charge

Manuel Odoni Licensed Audit Expert

Lucerne, 28 February 2024

Contents

Comments

89 Financial commentary

Consolidated financial statements of Emmi Group

Emmi AG

Income statetment

Sales

In 2023 Emmi generated organic growth of 3.5% and net sales of million. This represented a slight increase of 0.3% on the previous year's figure of million. This overall growth consists of organic growth of 3.5%, a negative acquisition effect of 1.0% and a negative foreign currency effect of 2.2%. Organic growth is therefore within the range of our own expectations for the year as a whole (3% to 4%), which were confirmed at the end of the first half of the year. Compared to the previous year's high organic growth, which was heavily affected by inflationary developments, organic growth during the year under review was still heavily price-driven, although in line with expectations flattened out during the second half of the year due to the fading away of price effects. CHF 4,242.4 CHF 4,230.0

Organic growth on the home market in Switzerland amounted to 3.8%, thereby outperforming our expectations. Alongside price effects, this growth is attributable in particular to proven brand concepts such as Emmi Caffè Latte, Emmi Energy Milk and Aktifit in the fresh products segment and Luzerner Rahmkäse and Gerber in the cheese segment. The division Americas achieved organic growth of 5.7%, which was slightly below our expectations. Sales development in this division was held back in particular by performance in the US, the most significant foreign market, in the cheese segment. Conversely, companies in Chile, Brazil, Mexico and Spain made a positive contribution, with each achieving significant growth. The division Europe also performed below our expectations, posting an organic decline in sales of 0.4% due to the challenging economic environment. In particular the Swiss cheese exports and the goat's milk powder business in the Netherlands held back sales development in the division Europe. On the other hand, Emmi Caffè Latte, chilled premium Italian desserts and Dutch fresh goat's cheese made a positive contribution to performance.

Thanks to leading market positions and differentiated brands and innovations, the strategic niche of ready-to-drink coffee experienced further strong growth. The continued strong sales performance of Emmi Caffè Latte in Spain, Switzerland and in division Europe's key markets is especially pleasing. Sales in the speciality cheeses segment increased further, although exchange rate and price effects had a tangibly negative effect on foreign demand for Swiss speciality cheeses. Among chilled premium desserts, in particular Emmi Dessert USA stood out, once again posting satisfactory growth. On the other hand, sales of plant-based milk alternatives dropped overall in the face of challenging market conditions.

The negative acquisition effect is due to the divestment of Gläserne Molkerei (Germany, 14 August 2023).

Developments in the divisions Switzerland, Americas, Europe and Global Trade are explained below.

Sales development Switzerland

Net sales by product group: Switzerland

in CHF million Sales 2023 Sales 2022 Difference
2023/2022		 Acquisition
effect		 Organic
growth
Dairy products 687.9 661.1 4.1% – 4.1%
Cheese 418.2 411.4 1.6% – 1.6%
Fresh products 382.1 362.3 5.5% – 5.5%
Fresh cheese 115.2 106.0 8.7% – 8.7%
Powder/concentrates 82.0 86.4 -5.0% – -5.0%
Other products/services 76.6 70.9 8.1% – 8.1%
Total Switzerland 1,762.0 1,698.1 3.8% – 3.8%

The division achieved sales of million in 2023 (previous year: million), corresponding to organic growth of 3.8%. Growth thus flattened out over the second half of the year in line with expectations, although exceeded our own expectations for the year as a whole (2.0% to 3.0%). Growth was generated by, inter alia, brand concepts such as Emmi Caffè Latte, Emmi Energy Milk and Aktifit in the fresh products segment and Luzerner Rahmkäse and Gerber in the cheese segment. Growth was also boosted by the continuing recovery in the food service sector and price effects. The division Switzerland accounted for 41.5% of Group sales (previous year: 40.1%). Switzerland CHF 1,762.0 CHF 1,698.1

Sales in the segment (milk, cream, butter) rose by 4.1%, reflecting not only price effects but also the highly dynamic food service sector as well as strategic retail trade channels. Emmi also performed strongly with new products such as organic milk in reusable glass bottles and milk packaging depicting Disney characters. dairy products

The segment posted organic growth of 1.6%. Most of the increase related to the processed cheese segment, where in particular Gerber-brand products have been becoming increasingly popular. Despite the challenging environment in the natural cheese segment, the further growth achieved by Luzerner Rahmkäse was a positive note. cheese

The segment grew pleasingly by 5.5% in organic terms, proving to be a major growth driver of the division. Thanks to various innovations and new products, the branded products Emmi Caffè Latte, Emmi Energy Milk and Aktifit in particular continued to enjoy great popularity and recorded correspondingly strong gains. fresh products

In addition, the segment reported pleasing growth of 8.7%, primarily driven by sales of mozzarella and quark in the retail and food service business. fresh cheese

The decline in sales by 5.0% in the segment reflects the lower sales of milk powder to industrial customers. powder/concentrates

The segment experienced strong organic growth of 8.1%. This is due to higher revenue from services and trading goods for the food service sector. other products/services

Sales development Americas

Net sales by product group: Americas

in CHF million Sales 2023 Sales 2022 Difference
2023/2022		 Acquisition
effect		 Currency
effect		 Organic
growth
Cheese 635.2 663.0 -4.2% – -4.7% 0.5%
Dairy products 427.1 414.1 3.2% – -4.1% 7.3%
Fresh products 367.2 342.7 7.1% – -5.6% 12.7%
Fresh cheese 98.7 96.9 1.8% – -1.3% 3.1%
Powder/concentrates 48.5 40.2 20.7% – -3.9% 24.6%
Other products/services 122.1 117.0 4.3% – 0.0% 4.3%
Total Americas 1,698.8 1,673.9 1.5% – -4.2% 5.7%

The division includes the Emmi Group companies in the US, Brazil, Spain, Chile, Tunisia, Mexico and Canada. Americas

The division Americas achieved organic sales growth during the reporting period of 5.7% and sales of million. This represents an overall increase in sales of 1.5% compared to the previous year ( million). Strongly negative currency effects, due in particular to the devaluation of the US dollar against the Swiss franc, had a negative impact on performance, reducing it by 4.2%. The organic sales growth of 5.7% was slightly below our expectations (6% to 8%). Group companies in Chile, Brazil, Mexico and Spain stood out as drivers of growth for the division. The division Americas accounted for 40.1% of Group sales (previous year: 39.6%). CHF 1,698.8 CHF 1,673.9

The largest segment in terms of sales, achieved only moderate organic growth of 0.5%. In particular, business in the US posted negative performance in terms of both locally produced cheese and speciality cheese imported from Switzerland. On the other hand, trading business in Canada and Mexico grew, as did sales of locally produced cheese in Chile and Brazil. cheese,

The segment recorded organic growth of 7.3%. This development was driven primarily by business in Chile, which improved significantly following the previous year's operational distribution difficulties. Emmi also achieved significant growth in Spain with cow's milk and in the US with goat's milk under the Meyenberg brand. The decline in sales in Tunisia due to a shortage of milk, by contrast, restricted growth in this segment. dairy products

Organic growth of 12.7% was achieved in the segment. The largest contribution came from Spain where, alongside yogurt, further significant growth was pleasingly achieved also by Emmi Caffè Latte. Moreover, the speciality desserts of Emmi Dessert USA and yogurt and yogurt drinks in Chile, Tunisia and Brazil contributed strongly to organic growth in this segment. fresh products

The organic growth of 3.1% in the segment resulted primarily from Mexideli's trading business and locally produced fresh cheese under the Green Valley brand in California, while growth in this segment was held back by the performance of the mozzarella business in Brazil. On the other hand, Brazil was the main driver of organic growth of 24.6% in the segment. Organic growth of 4.3% in the segment is primarily due to the positive development in Mexideli's trading business. fresh cheese powder/concentrates other products/services

Sales development Europe

Net sales by product group: Europe

in CHF million Sales 2023 Sales 2022 Difference
2023/2022		 Acquisition
effect		 Currency
effect		 Organic
growth
Fresh products 362.9 371.8 -2.4% -1.2% -3.7% 2.5%
Cheese 124.4 138.5 -10.2% -0.4% -3.2% -6.6%
Dairy products 55.8 96.8 -42.4% -38.4% -1.9% -2.1%
Fresh cheese 46.3 43.2 7.4% – -3.6% 11.0%
Powder/concentrates 35.3 39.8 -11.6% -0.3% -3.0% -8.3%
Other products/services 36.7 40.3 -8.9% -0.3% -3.1% -5.5%
Total Europe 661.4 730.4 -9.5% -5.8% -3.3% -0.4%

The division includes the Emmi Group companies in Italy, Germany, the Netherlands, France, the UK and Austria. Europe

The division Europe suffered a slight organic decline in sales of 0.4% during the reporting period with sales of million, representing an overall decline of 9.5% ( million) compared to the previous year. In addition to the divestment effect of 5.8% resulting from the disposal of Gläserne Molkerei, currency effects had a negative impact of 3.3% on sales. As a result of the organic decline in sales of 0.4%, the division Europe fell just short of its forecast for the year as a whole (0% to 1%). The organic decline in sales is primarily attributable to the cheese segment, while the fresh products and fresh cheese segments were only partially able to make up for this decline. The division Europe accounted for 15.6% of Group sales (previous year: 17.3%). CHF 661.4 CHF 730.4

The largest segment in terms of sales, achieved organic growth of 2.5%. Once again, the growth drivers were innovative speciality desserts from Italy and the product range of Emmi Caffè Latte, with significant growth in Germany, the UK and Austria. fresh products,

The segment posted an organic decline of 6.6%. The decline affected mainly Germany and the Netherlands with speciality cheeses imported from Switzerland. This development was due primarily to the slowdown in consumer demand caused by price and exchange rates. cheese

Sales in the segment fell by a total of 42.4% as a result of the divestment of Gläserne Molkerei. After adjustment for acquisition and currency effects, there was still an organic decline of 2.1% resulting from sales of milk and cream in Austria. dairy products

In the segment, business relating to fresh goat's cheese in the Netherlands continued to develop positively, resulting in significant organic growth of 11.0%. fresh cheese

The sales achieved from fell in organic terms by 8.3% as a result of falling sales of goat's milk powder in the Netherlands. This negative development was fuelled by economic uncertainties, globally high inventory held by distributors and a shortage of raw materials. powder/concentrates

The organic decline in sales by 5.5% in the segment was due primarily to non-dairy products in Austria, Germany and Italy. other products/services

Sales development Global Trade

Net sales by product group: Global Trade

in CHF million Sales 2023 Sales 2022 Difference
2023/2022		 Acquisition
effect		 Currency
effect		 Organic
growth
Cheese 64.0 68.2 -6.0% – – -6.0%
Fresh products 34.9 35.3 -1.2% – – -1.2%
Powder/concentrates 19.1 20.8 -8.2% – – -8.2%
Dairy products 1.0 1.4 -29.5% – – -29.5%
Other products/services 1.2 1.9 -35.7% – – -35.7%
Total Global Trade 120.2 127.6 -5.7% – – -5.7%

The division primarily comprises direct sales from Switzerland to customers in countries where Emmi has no subsidiaries. These include the Asian and Eastern European markets, most South American countries and the Arabian Peninsula. The division Global Trade accounted for 2.8% of Group sales (previous year: 3.0%). Global Trade

Sales of the division Global Trade amounted to million. Compared to the previous year's figure of million, this represents an organic decline in sales of 5.7%. CHF 120.2 CHF 127.6

The organic decline in sales by 6.0% in the segment is mainly attributable to lower sales in Asia coupled with the discontinuation of deliveries to Russia during the first half of 2022. The segment fell by 1.2%, primarily driven by the negative development of yogurt in Asia and of yogurt drinks in northern Europe. The decline by 8.2% in the segment reflects lower exports of skimmed milk powder from Switzerland. cheese fresh products powder/concentrates

Gross profit

The increased during the year under review by million to million (previous year: million) despite significant negative currency effects in conjunction with the negative effect resulting from the disposal of Gläserne Molkerei. Alongside organic growth, this increase reflects primarily the higher of 36.7%, which was significantly higher than the previous year's figure (35.1%). Following the temporary margin decline in the previous year, the increase in the margin was driven above all by operational improvements by individual foreign companies such as Quillayes Surlat in Chile and dessert companies in the US and Italy, as well as the continual transformation of the Group's portfolio. Moreover, measures to increase productivity and in the area of procurement once again had a positive effect, along with delayed effects of sales price increases. gross profit CHF 72.1 CHF 1,555.2 CHF 1,483.1 gross profit margin

Non-recurring effects in the consolidated financial statements

As part of the process of ongoing portfolio transformation and a focus on profitable growth segments, during the year under review Emmi sold the 100%-owned Gläserne Molkerei and the minority interest of 25% in the Italian Ambrosi S.p.A., which had a significant impact on the income statement.

The divestment of Gläserne Molkerei resulted in a pre-tax loss of million, which is reported in "Other operating expenses" and had an impact in this amount on the figures for EBITDA, EBIT and EBT. After taking account of the positive tax effect of million at the selling Swiss company, this transaction had a net impact of million on profit including minority interests and on net profit. Disregarding the positive tax effect, the transaction also resulted in a net outflow of cash and cash equivalents of million. CHF 37.2 CHF 8.3 CHF 28.9 CHF 11.5

The sale of the minority interest in resulted in a pre-tax profit of million, which is recorded under "Income from associates and joint ventures", and had a corresponding impact on EBT. After accounting for the tax effect, this left a gain of million under profit including minority interests and net profit. The net inflow from this transaction in terms of cash and cash equivalents amounted to million. Ambrosi S.p.A. CHF 3.0 CHF 2.8 CHF 27.1

The previous year's income statement was significantly impacted by the impairment of non-current assets at Gläserne Molkerei totalling million. This amounted to million for the item "Depreciation of property, plant and equipment" and to million for the item "Amortisation of intangible assets". Adjusted for this non-recurring effect, EBIT and EBT increased by million last year, while profit including minority interests and net profit increased by million. CHF 13.1 CHF 13.0 CHF 0.1 CHF 13.1 CHF 11.8

Operating result

increased by a total of million to million in the year under review (previous year: million). After adjustment for the loss from the disposal of Gläserne Molkerei, the increase due to inflation was million, or 3.2%, which corresponds to a disproportionate increase in relation to sales and accordingly held back the increase in the margin at the level of gross profit. Operating expenses CHF 73.3 CHF 1,186.1 CHF 1,112.8 CHF 36.1

were million in the year under review, compared to million in the previous year. The increase of million resulted primarily from higher wage costs in all countries due to inflation. However, the increase was largely aligned with sales, from 13.2% during the previous year to 13.3% during the year under review. Personnel expenses CHF 566.1 CHF 556.5 CHF 9.6

During the year under review, amounted to million or million after adjustment for the loss from the disposal of Gläserne Molkerei. Compared to the previous year ( million), the increase in terms of adjusted figures was million, entailing a rise from 13.1% during the previous year to 13.7% as a proportion of sales. A significant increase, both in absolute terms and in relation to sales, resulted in particular from higher costs of energy and operating materials. The higher cost of electricity and fuel drove up the cost of energy and operating materials to million, a significant increase of million or 24.8%. Marketing and salesrelated expenses also posted an increase, reaching a total of million compared to million in the previous year, pursuing the goal of strengthening established brand concepts. Logistics costs followed an opposite trajectory, thereby supporting margins, as they to some extent normalised after the previous year's record highs, falling by million or 13.6% to million (previous year: CHF 161.5 million). other operating expenses CHF 620.0 CHF 582.8 CHF 556.3 CHF 26.5 CHF 118.6 CHF 23.5 CHF 140.7 CHF 130.1 CHF 21.9 CHF 139.6

amounted to million in the year under review, down slightly on the previous year's figure of million. Other operating income CHF 6.7 CHF 9.0

During the period under review, amounted to million, or million excluding the loss from the disposal of Gläserne Molkerei. Compared to the previous year ( million), this represents an adjusted increase of million. The therefore rose from the previous year's 9.0% to the adjusted figure of 9.7% in the period under review. earnings before interest, taxes, depreciation and amortisation (EBITDA) CHF 375.8 CHF 413.0 CHF 379.3 CHF 33.7 EBITDA margin

fell by million in the year under review, from million to million. However, if the previous year's impairment of non-current assets at Gläserne Molkerei is factored out, this resulted in an increase of million. Depreciation and amortisation CHF 8.8 CHF 126.4 CHF 117.6 CHF 4.3

During the period under review, amounted to million (previous year: ), or million (previous year adjusted: million) excluding the loss from the disposal of Gläserne Molkerei. Compared to the previous year, EBIT therefore increased by million, or by million based on the respective adjusted figures. The resulting of 6.1% (adjusted 7.0%) was accordingly also above the previous year's margin of 6.0% (adjusted 6.3%). earnings before interest and taxes (EBIT) CHF 258.2 253.0 million CHF 295.4 CHF 266.1 CHF 5.2 CHF 29.3 EBIT margin

Income from associates, financial results and income taxes

Following a loss of million in the previous year, recorded a profit of million. Excluding the profit from the disposal of , profit during the year under review amounted to million. CHF 0.1 income from associates and joint ventures CHF 3.9 Ambrosi S.p.A. CHF 0.9

The (net financial expenses) was million, compared to million in the previous year. Net interest expense rose by million to million in the year under review (previous year: million). This increase was due in particular to the refinancing of euro promissory notes in mid 2022 and the general increase in financing costs for various local financing arrangements. On the other hand, with a loss of million, the foreign currency result was improved by million than the previous year ( million). financial result CHF 24.0 CHF 23.3 CHF 2.4 CHF 16.5 CHF 14.1 CHF 6.5 CHF 1.9 CHF 8.4

during the year under review amounted to million, compared to million (adjusted: CHF ) in the previous year. Adjusted for the tax effect from the disposal of Gläserne Molkerei and Ambrosi, tax expenses amounted to million in the year under review. The tax rate of 13.7% (adjusted: 14.9%) was thus significantly lower than in the previous year (17.0% or adjusted 16.6%). The lower tax rate is due primarily to a change in tax legislation in Brazil approved in December 2023, which resulted in a recognition of previously unrecognised tax loss carryforwards. Income taxes CHF 32.6 CHF 38.9 40.3 million CHF 40.7

Net profit

was million. Compared to million in the previous year, this represents an increase of million. The increase on the basis of adjusted figures was million. Profit including minority interests CHF 205.5 CHF 190.6 CHF 14.9 CHF 29.2

The significant increase in the amount of profit attributable to from million in the previous year to million in the year under review is a positive sign, even though it diminishes the net profit. However, it means that companies with minority interests were able to increase their overall profitability significantly during the period under review. minority interests CHF 8.1 CHF 19.2

The resulting of million thus came in million higher than the previous year ( million). However, the net profit for the year under review, adjusted for non-recurring effects mentioned, of million was significantly higher, by million, than the adjusted figure for the previous year of million. The was 4.4% (adjusted 5.0%) compared to 4.3% (adjusted 4.6%) in the previous year. net profit CHF 186.3 CHF 3.8 CHF 182.5 CHF 212.4 CHF 18.1 CHF 194.3 net profit margin

Assets, financing and cash flow

as at 2023 increased by 3.0% or million compared with 2022 to million (previous year: million). The increase was primarily due to a significant increase in cash and cash equivalents, while the rest of the current assets and the non-current assets fell compared to the previous year. Total assets 31 December CHF 79.1 31 December CHF 2,714.5 CHF 2,635.4

(consisting of inventories and trade receivables and payables) amounted to a fall of million or 4.9% compared with the high level in the previous year ( million). In relation to sales, it fell from a high 16.2% in 2022 to 15.4% in 2023. Operating net working capital CHF 653.1 million, CHF 33.8 CHF 686.9

fell slightly by million or 1.1% from million to million. Property, plant and equipment accounts for the large majority of non-current assets at million (previous year: million). As a result of significantly negative foreign currency effects, it increased by only million, even though investment exceeded depreciation. Non-current assets CHF 13.9 CHF 1,278.0 CHF 1,264.1 CHF 1,105.4 CHF 1,100.2 CHF 5.2

amounted to million as at 2023 compared with million at the end of 2022. Lower trade payables were the main reason for the decline by million. Refinancing the million bond that matured in July 2023 led to a reclassification from current to non-current liabilities. Against this, short-term bank overdrafts rose, while longer-term bank overdrafts declined. The ratio rose from 48.7% at 2022 to 52.1%. A significant increase in cash and cash equivalents compared to the previous year, combined with slightly lower financial liabilities, resulted in of million as at 2023, compared to million in the previous year. Net debt to EBITDA fell from 1.25 as at 2022 to 0.79 at the end of the year under review. Liabilities CHF 1,299.6 31 December CHF 1,351.5 CHF 51.9 CHF 200 equity 31 December net debt CHF 298.3 31 December CHF 473.2 31 December

amounted to million in 2023, an increase of million from million in 2022. While the increase of million in cash flow before changes in net working capital, interest and taxes largely reflects the operating improvement at EBITDA level, the increase in cash flow from operating activities resulted predominantly from the positive developments in net working capital. The fall in net working capital had a positive impact of million on cash flow from operating activities in the year under review. In 2022, net working capital burdened the cash flow from operating activities by million, which represents a difference of million. The main driver of this positive change was the normalisation in net operating working capital. This increased sharply in the previous year, mainly due to the build-up of a safety stock of inventories to guarantee the ability to deliver. Meanwhile, interest and taxes paid detracted from cash flow from operating activities by million more than in the previous year. Cash inflow from operating activities CHF 370.1 CHF 161.8 CHF 208.3 CHF 33.1 CHF 21.9 CHF 111.2 CHF 133.1 CHF 4.5

The amounted to million in 2023, compared to million in the previous year. This decline was due firstly to lower investments in plant, property and equipment, where there was an outflow of million in the year under review, compared with million in 2022. Acquisition activities led to a net cash inflow of million in 2023. This included an inflow from the disposal of the minority interest in for million. In the previous year, acquisition activities led to an outflow of million. cash outflow from investing activities CHF 135.8 CHF 228.2 CHF 145.4 CHF 198.3 CHF 10.8 Ambrosi S.p.A. CHF 27.1 CHF 23.5

Not including cash flow from acquisition activities, the Group generated of million in the year under review. The significant increase compared with the low 2022 figure of million was due to the greatly increased cash flow from operating activities and the simultaneously lower investments in property, plant and equipment. free cash flow CHF 223.5 CHF 3.7

There was a of million in 2023, compared with a cash outflow of million in the prior year. The difference relates largely to the cash inflows in the previous year from the refinancing of euro promissory notes and the capital increase at companies with minority interests. But the increased dividend paid to shareholders and minority shareholders also contributed to the increased cash outflow from financing activities. cash outflow from financing activities CHF 81.1 CHF 23.1 Emmi AG

As a consequence of the cash flows described above, rose by million in financial year 2023 from million in the previous year to million as at 2023. cash and cash equivalents CHF 146.9 CHF 202.2 CHF 349.1 31 December

Outlook for 2024

Economic conditions will remain very challenging in 2024. Inflation is still high and easing only slowly in many of the markets and regions relevant for Emmi. Although inflation rates are likely to continue to decline in the coming months, in many countries they are likely to remain well above historic ranges and the levels targeted by the central banks.

Consumer confidence is stuck at low levels in many markets, which can be explained by, inter alia, the fall in real wages in many countries in recent years. A number of relevant markets for Emmi are expecting only modest economic growth or even a recession in 2024. This market environment is also expected to hold back Emmi's sales growth in the short term.

In terms of operating expenses, pressure on personnel costs will remain high due to inflation-related wage increases. This is exacerbated by the continuing acute shortage of skilled workers and labour in various countries. Volatility in procurement and in global supply chains is also likely to continue, not least due to ongoing and new geopolitical uncertainties. Emmi also expects a further increase in energy costs in the coming year, as it hedges its energy requirements in a series of annual tranches.

Overall, Emmi therefore expects input costs to continue to rise in 2024. The Swiss franc is also likely to continue to strengthen compared to the previous year, which not only depresses Group sales expressed in Swiss francs, but also hurts export competitiveness from Switzerland.

At Emmi, we will therefore continue to exercise our usual discipline and prudence, and counter the pressure on margins with further efficiency and cost-saving initiatives, carefully targeted price increases and a continual portfolio transformation in line with our strategic priorities.

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Markets

Conditions in the remain challenging for Emmi. Import pressure will persist, while an increase in shopping tourism in foreign countries close to the border can also be expected due to the further strengthening in the Swiss franc. In addition, new production capacities for milk processing have been built in Switzerland in recent years, which need to be fully utilised and create further price pressure. Emmi will counter these negative developments with its strong brand concepts, trend-led innovations, a strong focus on customers and consumers, and robust production output. business division Switzerland

The should continue to see rising demand in the US and the growth markets of Brazil, Mexico and Chile in the coming year. How soon the milk supply in Tunisia will normalise is difficult to say due to the challenging macroeconomic conditions in the country. The high volatility in the growth markets in the business division Americas is likely to pose continuing growth risks. Overall, Emmi therefore expects organic sales growth in the business division Americas to be a little below the medium-term targets in the short term. business division Americas

In the innovative Italian speciality desserts and the product range of Emmi Caffè Latte are key success factors, which will continue to generate organic growth in the coming year. The powder business in the Netherlands, where Emmi was unable to exploit the full sales potential in 2023 due to a challenging market environment in China and high inventories at distributors, is also expected to have a positive impact on sales. On the other hand, the further strengthening of the Swiss franc hampers the competitiveness of the Swiss export business, particularly in the cheese segment. Emmi therefore expects organic sales growth in the business division Europe to fall short of the medium-term targets in the near term. business division Europe,

Sales and profit growth

Emmi expects organic sales growth of 1% to 2% at Group level in 2024, which is below the medium-term forecast of 2% to 3%, due to uncertainties in volume developments. In Switzerland Emmi is projecting organic sales growth in line with the medium-term forecast of 0% to 1%, in spite of the reduction in milk prices effective from 2024, which will slow sales growth. Emmi also expects restrained sales growth in the international business. Growth of 2% to 4% is expected for the business division Americas, with growth of 0% to 1% for the business division Europe. In the longer term, Emmi is retaining its medium-term targets for organic sales growth (Group 2% to 3%, Switzerland 0% to 1%, Americas 4% to 6%, Europe 1% to 3%). 1 January

In spite of the numerous uncertainties described and continuing high cost pressures, Emmi is forecasting a rising operating result at EBIT level of between and CHF 315 million and a rising net profit margin of between 5.0% and 5.5% for financial year 2024, thanks to ongoing operating improvements and the continual transformation of the Group's portfolio. Emmi is also confirming its medium-term targets for net profit margin (5.5% to 6.0%), ROIC (improving trend) and distribution rate (35% to 45%). CHF 295 million

Consolidated income statement

in CHF 000s

Notes 20231) % 20222) %
Sales of products 4,209,623 4,198,712
Sales of services 32,784 31,297
Net sales 1 4,242,407 100.0 4,230,009 100.0
Change in inventories of semi-finished and finished products -46,282 1.1 5,324 -0.1
Cost of materials and services -2,640,964 62.2 -2,752,198 65.0
Gross profit 1,555,161 36.7 1,483,135 35.1
Other operating income 2 6,744 0.1 9,022 0.2
Personnel expenses -566,126 13.3 -556,487 13.2
Other operating expenses 3 -619,957 14.6 -556,326 13.1
Operating expenses -1,186,083 27.9 -1,112,813 26.3
Earnings before interest3), taxes, depreciation and
amortisation (EBITDA)		 375,822 8.9 379,344 9.0
Depreciation of property, plant and equipment 4 -104,707 2.5 -113,414 2.7
Amortisation of intangible assets 4 -12,867 0.3 -12,969 0.3
Earnings before interest3) and taxes (EBIT) 258,248 6.1 252,961 6.0
Income from associates and joint ventures 3,880 -148
Financial result 5 -24,021 -23,268
Earnings before taxes (EBT) 238,107 5.6 229,545 5.4
Income taxes 6 -32,625 -38,941
Profit incl. minority interests 205,482 4.8 190,604 4.5
Minority interests -19,209 -8,058
Net profit 186,273 4.4 182,546 4.3
Earnings per share (diluted/basic in CHF) 7 34.82 34.12

1) Please refer to page 1 for the results adjusted for the loss from the sale of Gläserne Molkerei and the gain from the sale of Ambrosi S.p.A.

2) Please refer to page 1 for earnings adjusted for the impairment of non-current assets at Gläserne Molkerei.

3) Incl. income from associates and joint ventures and other financial positions that are reported in the financial result.

Consolidated balance sheet

in CHF 000s

Assets Notes 31.12.2023 % 31.12.2022 %
Cash and cash equivalents 349,115 202,195
Securities 22,210 1,920
Trade receivables 8 473,665 533,584
Other receivables 9 60,869 58,611
Inventories 10 481,311 508,240
Prepayments and accrued income 11 63,220 52,872
Current assets 1,450,390 53.4 1,357,422 51.5
Investments in associates and joint ventures 30 12,012 18,251
Loans and other receivables 12 12,715 16,589
Securities 9,907 7,775
Employer contribution reserves 20 1,610 1,668
Deferred tax assets 6 11,954 4,881
Total financial assets 48,198 49,164
Prepayments and accrued income 11 4,864 5,009
Property, plant and equipment 13 1,105,405 1,100,243
Intangible assets 14 105,650 123,601
Non-current assets 1,264,117 46.6 1,278,017 48.5
Total assets 2,714,507 100.0 2,635,439 100.0

Liabilities and shareholders' equity

Bank overdrafts 18 68,475 45,424
Finance lease liabilities 18 430 677
Loans 18 500 26
Bonds 18 – 200,000
Trade payables 15 301,841 354,931
Other payables 16 43,957 30,720
Accrued liabilities and deferred income 17 193,200 183,407
Provisions 19 8,221 5,957
Current liabilities 616,624 22.7 821,142 31.2
Bank overdrafts 18 112,610 145,806
Finance lease liabilities 18 305 434
Loans 18 457 2,028
Bonds 18 499,520 299,520
Accrued liabilities and deferred income 17 4,198 5,363
Provisions 19 65,909 77,240
Non-current liabilities 682,999 25.2 530,391 20.1
Liabilities 1,299,623 47.9 1,351,533 51.3
Share capital 53,498 53,498
Capital reserves 2,088 2,088
Retained earnings 1,237,377 1,113,790
Shareholders' equity excl. minority interests 1,292,963 47.6 1,169,376 44.4
Minority interests 121,921 4.5 114,530 4.3
Shareholders' equity incl. minority interests 1,414,884 52.1 1,283,906 48.7
Total liabilities and shareholders' equity 2,714,507 100.0 2,635,439 100.0

Consolidated cash flow statement

in CHF 000s

2023 2022
Profit incl. minority interests 205,482 190,604
Net interest expense 16,472 14,072
Income taxes 32,625 38,941
Result from sale of non-current assets -721 -878
Result from sale of investments/businesses 34,153 –
Depreciation and amortisation 114,686 111,273
Impairment charges 2,888 15,110
Change in provisions -1,011 974
Income from associates and joint ventures -872 148
Other non-cash adjustments 6,572 6,914
Cash flow before changes in net working capital, interest and taxes 410,274 377,158
Change in inventories 7,353 -76,150
Change in trade receivables 32,255 -66,143
Change in other receivables, prepayments and accrued income -12,900 -3,741
Change in trade payables -36,629 39,194
Change in other payables, accrued liabilities and deferred income 31,851 -4,394
Interest paid -19,114 -15,705
Taxes paid -42,945 -41,871
Cash flow from operating activities 370,145 208,348
Investments in property, plant and equipment -147,075 -200,264
Proceeds from disposal of property, plant and equipment 1,689 1,992
Purchase of securities -4,104 –
Sale of securities 1,166 –
Investments in intangible assets -2,390 -4,307
Proceeds from sale of shares in associates 27,147 –
Acquisition of consolidated investments/businesses -1,892 -5,983
Acquisition of minority interests -2,855 -17,558
Proceeds from sale of investments/businesses -11,607 –
Change in loans receivable 1,154 -4,985
Dividend received 425 782
Interest received 2,514 2,155
Cash flow from investing activities -135,828 -228,168
Change in other current financial liabilities -8,443 -65,838
Change in other non-current financial liabilities 8,800 108,942
Repayments of bonds -200,000 –
Proceeds from bond-issuance 199,751 –
Share of minority shareholders in capital increases of Group companies – 10,847
Dividend payments to shareholders -77,572 -74,897
Dividend payments to minority shareholders -3,613 -2,148
Cash flow from financing activities -81,077 -23,094
Currency translation -6,320 -2,172
Net change in cash and cash equivalents 146,920 -45,086
Cash and cash equivalents at beginning of period 202,195 247,281
Cash and cash equivalents at end of period 349,115 202,195

Consolidated statement of changes in equity

in CHF 000s

Share
capital		 Capital
reserves
(premium)		 Retained
earnings		 Accumulated
translation
differences		 Total
profit
reserves		 Total excl.
minority
interests		 Minority
interests		 Total incl.
minority
interests
Shareholders' equity at
1 January 2022 53,498 2,088 1,144,526 -119,102 1,025,424 1,081,010 100,666 1,181,676
Capital increase of a
group company – – – – – – 10,847 10,847
Offset goodwill – – -12,982 – -12,982 -12,982 – -12,982
Acquisition of minority
interests		 – – – – – – -3,718 -3,718
Profit incl. minority
interests – – 182,546 – 182,546 182,546 8,058 190,604
Currency translation
differences – – – -6,301 -6,301 -6,301 825 -5,476
Dividend – – -74,897 – -74,897 -74,897 -2,148 -77,045
Shareholders' equity at
31 December 2022		 53,498 2,088 1,239,193 -125,403 1,113,790 1,169,376 114,530 1,283,906
Offset goodwill – – -1,027 – -1,027 -1,027 – -1,027
Goodwill recycling from
disposal		 – – 32,122 5,617 37,739 37,739 – 37,739
Acquisition of minority
interests		 – – – – – – -1,556 -1,556
Profit incl. minority
interests – – 186,273 – 186,273 186,273 19,209 205,482
Currency translation
differences		 – – – -21,826 -21,826 -21,826 -6,649 -28,475
Dividend – – -77,572 – -77,572 -77,572 -3,613 -81,185
Shareholders' equity at
31 December 2023		 53,498 2,088 1,378,989 -141,612 1,237,377 1,292,963 121,921 1,414,884

As at 31 December 2023, 5,349,810 registered shares with a par value of CHF 10 were issued (unchanged from previous year). With regard to the rights associated with the shares, we refer to note 2 in the Corporate Governance report.

The accumulated non-distributable reserves amounted to CHF 37.5 million (previous year: CHF 37.9 million).

Notes to the consolidated financial statements

Principles of consolidation

General information

The Board of Directors of approved the Group financial statements on 2024. They are subject to the approval of the Annual General Meeting. Emmi AG 28 February

Accounting principles

The consolidated financial statements are based on the annual accounts of the Group companies for the year ending 2023, prepared on a uniform basis. The Group prepares its accounts in compliance with all existing guidelines of (Swiss Accounting and Reporting Recommendations) and the provisions of Swiss law. 31 December Swiss GAAP FER

Valuation is based on historical cost (acquisition cost or production cost) or actual value. The section "Principles of valuation" contains the valuation principles of specific balance sheet items. The income statement is presented using the classification of expenses based on their nature. The consolidated financial statements are based on economic values and present a true and fair view of the company's assets, financial position and results of operations. They are prepared under the assumption of a going concern.

The consolidated financial statements are presented in Swiss francs (CHF). Except where stated otherwise, all amounts in the Financial report are presented in thousands of Swiss francs.

Scope of consolidation

The consolidated financial statements include the annual accounts of and the Group companies in which directly or indirectly holds more than 50% of the voting rights or where Emmi has a controlling influence over the financial and business policy of a company by contractual agreement. Investments in joint ventures and investments in associates where Emmi has significant influence (this is usually assumed when the Group owns 20% to 50% of the voting rights in the company) are accounted for using the equity method. Accounts based on or reconciliations to are used to calculate Emmi's proportionate share in shareholders' equity. Minority holdings in companies where Emmi does not have a significant influence are carried in the balance sheet at acquisition cost less any necessary adjustments for impairment. The consolidated companies are listed in the Notes to the consolidated financial statements ( ). Emmi AG Emmi AG Swiss GAAP FER note 30

Changes to the scope of consolidation

The following changes to the scope of consolidation took place in the year under review. For changes of the capital share with no impact on the scope of consolidation or on the consolidation method, please refer to note 30.

Capital in Capital share Capital share
Consolidated companies Currency thousands 31.12.2023 31.12.2022
Liquidated on
SDA Guipuzcoa, S.L., Bilbao, Spain 24.3.2023 EUR – – 73%
Merged on
Molkerei Biedermann AG, Bischofszell, Switzerland1) 2.6.2023 CHF – – 100%
Gläserne Molkerei GmbH, Dechow, Germany2) Sold on 14.8.2023 EUR – – 100%
Liquidated on
SDA Bilbao, S.L., Bilbao, Spain 14.12.2023 EUR – – 73%

1) Molkerei Biedermann AG was merged with Emmi Schweiz AG. See note 30.

2) Gläserne Molkerei consists of the company mentioned above and Gläserne Molkerei Münchehofe GmbH and Hofmolkerei Münchehofe GmbH. See note 30.

Capital in Capital share Capital share
Associates and joint ventures Currency thousands 31.12.2023 31.12.2022
Liquidated on
Big Red Cheese Company LLC, Monroe, US 14.4.2023 USD – – 50%
Ambrosi S.p.A., Brescia, Italy Sold on 3.7.2023 EUR – – 25%
Liquidated on
EB Snacks LLC, Delaware, US 5.7.2023 USD – – 50%

Consolidation method

Capital is consolidated using the purchase method. Assets and liabilities and expenses and income of the fully consolidated companies are included in their entirety. Minority interests in consolidated shareholders' equity and net profit are shown separately. All intercompany transactions and relations between the consolidated companies are offset against each other and eliminated. Profits on such intercompany transactions are eliminated.

Companies and businesses acquired during the course of the year are consolidated as from the date of acquisition. Net assets acquired are revalued on the acquisition date at fair value. Non-current assets acquired are recognised on a gross basis. As part of the purchase price allocation, intangible assets are recognised and revalued at fair value only if they were already recognised in the balance sheet at the acquisition date.

Goodwill from the acquisition of companies and businesses is equivalent to the difference between the purchase price and the interest in revalued net assets of the acquired company. This is offset against retained earnings at the date of acquisition. The impact of theoretical capitalisation and amortisation of goodwill are disclosed in the Notes to the consolidated financial statements. In a business acquisition achieved in stages (step acquisition), the goodwill of each separate transaction is determined.

Companies and businesses sold during the year are excluded from the consolidated financial statements from the date of sale. Minority interests acquired are likewise measured using the purchase method. As a consequence, the difference between purchase price and proportionate equity is offset as goodwill against retained earnings in accordance with Swiss GAAP FER.

When acquiring investments in associates and joint ventures, no purchase price allocation is performed. As a consequence, the difference between purchase price and proportionate equity is offset as goodwill against retained earnings in accordance with Swiss GAAP FER.

Where interests in fully consolidated companies or companies accounted for using the equity method are sold, goodwill acquired at an earlier date and offset against retained earnings is recognised in the income statement at original cost for the purpose of calculating the gain or loss resulting from the sale.

Translation of foreign currencies

Foreign currency transactions in Group companies

The foreign currency transactions and items contained in the individual financial statements of the consolidated companies are translated as follows: foreign currency transactions are translated into the functional currency at the exchange rate valid on the transaction date (current rate). At year-end, monetary assets and liabilities in foreign currency are measured using the exchange rate valid at the balance sheet date, with any profit or loss from such valuation taken to the income statement. Foreign exchange gains and losses resulting from the measurement of intercompany loans that are part of the net investment in a subsidiary are recognised in equity.

Exchange differences resulting from the revaluation of shares in associates are recognised in equity.

Translation of financial statements to be consolidated

Group financial statements are presented in Swiss francs. Assets and liabilities of Group companies with a functional currency other than the Swiss franc are translated at year-end rates (rates on balance sheet date); equity is translated at historical rates, while the income statement and cash flow statement are translated using average rates for the year. Any resulting exchange differences are recognised in shareholders' equity.

Accumulated exchange differences of foreign companies recognised in equity resulting from the translation of annual statements and loans between Group companies that are part of the net investment in a subsidiary are derecognised upon sale of the company and repatriated in the income statement as part of the gain or loss resulting from the sale.

Currency exchange rates in CHF

Annual average rates Year-end rates
2023 2022 31.12.2023 31.12.2022
1 BRL 0.18 0.19 0.17 0.17
1 CAD 0.67 0.73 0.63 0.68
100 CLP 0.11 0.11 0.10 0.11
1 EUR 0.97 1.00 0.93 0.98
1 GBP 1.12 1.18 1.07 1.11
1 MXN 0.05 0.05 0.05 0.05
1 TND 0.29 0.31 0.27 0.30
1 USD 0.90 0.95 0.84 0.92

Cash flow statement

Cash and cash equivalents form the basis for the presentation of the cash flow statement. Cash flow from operating activities is presented using the indirect method.

Principles of valuation

Cash and cash equivalents

Cash and cash equivalents include cash, balances in postal giro and bank accounts, and short-term time deposits with a residual term of less than three months. They are valued at their nominal value.

Securities (current)

Listed securities (incl. OTC securities with a market price) are valued at the market values prevailing on the balance sheet date. Unlisted securities are valued at acquisition cost less any necessary adjustments for impairment.

Trade receivables

Trade receivables include short-term receivables with a residual term of up to one year arising from ordinary operating activities. These receivables are valued at their nominal values. Credit default risks are accounted for by specific and general allowances. General allowances are recognised for items that have not yet been considered with a specific allowance. The general allowance is based on the assumption that the default risk increases as the debt becomes increasingly overdue.

Inventories

Goods manufactured by the company itself are valued at production cost. Any lower net market value is taken into account (lower of cost or market principle). Merchandise and other stocks of goods are valued at the lower of average cost or net market price. Discounts are treated as purchase value reductions.

Financial assets

Financial assets include, alongside non-consolidated investments, securities held as long-term investments, long-term loans, employer contribution reserves and deferred tax assets. Securities held as long-term investments and loans are valued at cost less any necessary impairment. Employer contribution reserves are recognised at nominal value. For a description of the valuation principles of investments, refer to the consolidation principles, whereas for the valuation principles of deferred taxes, refer to the separate description within the valuation principles.

Property, plant and equipment

Property, plant and equipment are valued at purchase cost less depreciation and any necessary impairment. Companyproduced additions to plant and equipment are recognised only if they are clearly identifiable and the costs reliably determinable, and they bring a measurable benefit to the company over the course of several years. Depreciation is calculated on a straight-line basis over the useful life of the fixed asset.

The useful lives of assets have been determined as follows:

Land no depreciation
Administrative buildings and residential buildings 40 years
Industrial buildings, rock caves 25 to 40 years
Installations and fittings 15 years
Machinery and equipment 10 to 15 years
Business infrastructure 5 to 10 years
Vehicles 4 to 7 years
Company-produced additions to plant and equipment 5 years

Intangible assets

This item includes mainly trademarks and EDP software. Intangible assets are recognised if they are clearly identifiable and the costs reliably determinable, and they bring a measurable benefit to the company over the course of several years. Intangible assets are valued at purchase cost less amortisation and any necessary impairment. Amortisation is calculated on a straight-line basis over the useful life and recognised in the income statement. The useful life of EDP software is 2 to 5 years. Trademarks are amortised over useful lives of 5 to 20 years. The expected useful life of other intangible assets is determined on a case-by-case basis. The useful life is usually 5 years and in justified cases up to 20 years. Goodwill is not capitalised, but offset against retained earnings at the date of acquisition.

Impairment

The value of non-current assets is assessed on the reporting date for indicators of impairment. If there is evidence of any lasting reduction in value, the recoverable amount is calculated (impairment test). If the book value exceeds the recoverable amount, the difference is recognised in the income statement as an impairment charge. Major goodwill items are tested for impairment annually, based on a value-in-use calculation. The value-in-use calculation is based on cash flows for usually the next five years and the extrapolated values thereafter. Since the goodwill is already offset against retained earnings at the date of acquisition, any impairment to goodwill does not lead to a charge to the income statement, but only to disclosure in the Notes.

Government grants

Government grants relating to investments in property, plant and equipment are deducted from the carrying value of the assets once the conditions to receive the grant are fully met. Consequently, as of the date when the conditions are met, government grants are released to the consolidated income statement on a straight-line basis over the expected lives of the related assets. Government grants that are received as a compensation of costs are credited to the income statement in the period when the costs are recognised. Grants received for which the conditions are not fully met are recognised as liabilities.

Liabilities

Group liabilities are recognised at their nominal values.

Leasing

Leasing transactions are divided into finance leases and operating leases. A lease is classified as a finance lease if it essentially transfers all the risks and rewards of an asset incidental to ownership. The assets and liabilities arising out of finance leases are recognised in the balance sheet. Leasing liabilities arising out of operating leases that cannot be cancelled within one year are disclosed in note 24.

Provisions

Provisions are recognised if an event in the past gives rise to a justified, likely obligation that is of uncertain timing and amount, but which can be estimated reliably. Provisions are measured on the basis of the estimated amount of money required to satisfy the obligation.

Employee benefit plan liabilities

Employees and former employees receive various employee benefits and old age pensions, which are provided in accordance with the laws of the countries in question.

The Swiss companies of the are affiliated to the "Emmi Vorsorgestiftung" (legally independent pension scheme) or are members of collective occupational pension foundations provided by banks or insurance companies, which do not carry risk themselves. These pension schemes are financed by employer and employee contributions. Emmi Group

The economic impact of existing pension schemes on the is reviewed each year. An economic benefit is recognised if it is permitted and intended to use the surplus to decrease the future pension expenses of the company. An economic obligation is recognised if the conditions for recognising a provision are met. The employer contribution reserves available are recognised as assets. Similar to pension contributions, changes of economic benefits or economic obligations are recognised in the income statement under personnel expenses. Emmi Group

Deferred income taxes

The annual accrual of deferred income taxes is based on a balance-sheet oriented approach and takes all future income tax effects into account. The future tax rate valid on the balance sheet date for the tax subject in question is used for the deferred income tax calculation. Deferred income tax assets and deferred income tax liabilities are offset, provided they relate to the same tax subject and are levied by the same tax authority. Deferred income tax assets on temporary differences and on tax losses carried forward are recognised only if it is probable that they can be realised in future through sufficient taxable profits.

Derivative financial instruments

Emmi uses derivative financial instruments to hedge its currency, interest rate and commodity risks. Recognition of derivative financial instruments depends on the underlyings hedged. Derivatives used to hedge changes in the value of an underlying transaction already recognised in the financial statements are accounted for using the same valuation principle used for the underlying transaction hedged. Instruments for hedging future cash flows are not recognised in the balance sheet but disclosed in the Notes until the future cash flow is realised. On the occurrence of the future transaction or the disposal of the derivative instrument, the current value of the derivative financial instrument is recognised in the balance sheet and recorded in the income statement at the same time as the cash flow hedged. Any derivative financial instruments that are open as at the balance sheet date are disclosed in of the consolidated financial statements. note 22

Net sales and revenue recognition

Net sales represent amounts received and receivable for goods supplied and for services rendered. Revenue from the sale of goods is recognised in the income statement at the moment when the risks and rewards and the power of disposal of ownership of the goods have been transferred to the buyer, generally upon shipment. Revenue from services is recognised in the period when the services were rendered. Net sales consist of the amounts invoiced for products and services less deductions and sales tax.

Research and development

Research and development costs are fully charged to the income statement. These costs are included under "Personnel expenses" and "Other operating expenses".

Contingent liabilities

The probability and the potential economic impact of contingent liabilities are assessed at each balance sheet date. Based on that assessment, contingent liabilities are evaluated and disclosed in the Notes.

Notes to the consolidated financial statements

in CHF 000s

Net sales by

1. Segment reporting

Net sales by
product group Switzerland Americas Europe Global Trade Group
and division 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Natural cheese 360,815 357,572 597,405 626,354 109,633 123,573 58,426 61,576 1,126,279 1,169,075
Processed cheese 57,319 53,838 37,810 36,665 14,779 14,934 5,641 6,586 115,549 112,023
Cheese 418,134 411,410 635,215 663,019 124,412 138,507 64,067 68,162 1,241,828 1,281,098
as % of net sales 23.7 24.2 37.4 39.6 18.8 19.0 53.3 53.4 29.3 30.3
Milk 243,249 227,354 347,930 342,777 38,008 66,601 971 1,376 630,158 638,108
Butter and margarine 257,785 257,399 43,725 39,837 15,203 27,223 – – 316,713 324,459
Cream 186,872 176,372 35,473 31,464 2,547 3,017 – 2 224,892 210,855
Dairy products 687,906 661,125 427,128 414,078 55,758 96,841 971 1,378 1,171,763 1,173,422
as % of net sales 39.0 38.9 25.1 24.7 8.4 13.3 0.8 1.1 27.6 27.7
Fresh products 382,087 362,288 367,181 342,686 362,929 371,753 34,927 35,354 1,147,124 1,112,081
as % of net sales 21.7 21.3 21.6 20.5 54.9 50.9 29.0 27.7 27.0 26.3
Fresh cheese 115,207 106,031 98,663 96,904 46,328 43,144 – – 260,198 246,079
as % of net sales 6.5 6.3 5.8 5.8 7.0 5.9 – – 6.1 5.8
Powder/
concentrates		 82,024 86,360 48,556 40,233 35,233 39,851 19,051 20,753 184,864 187,197
as % of net sales 4.7 5.1 2.9 2.4 5.3 5.4 15.9 16.3 4.4 4.4
Other products 49,099 46,392 118,320 111,745 35,557 39,169 870 1,529 203,846 198,835
Sales of services 27,512 24,504 3,744 5,257 1,153 1,130 375 406 32,784 31,297
Other products/
services 76,611 70,896 122,064 117,002 36,710 40,299 1,245 1,935 236,630 230,132
as % of net sales 4.4 4.2 7.2 7.0 5.6 5.5 1.0 1.5 5.6 5.5
Net sales 1,761,969 1,698,110 1,698,807 1,673,922 661,370 730,395 120,261 127,582 4,242,407 4,230,009
as % of Group 41.5 40.1 40.1 39.6 15.6 17.3 2.8 3.0 100.0 100.0
country group 2023 in % 2022 in %
Switzerland 1,761,969 41.5 1,698,110 40.1
North and South
America 1,377,270 32.5 1,360,611 32.2
Europe excl.
Total 4,242,407 100.0 4,230,009 100.0
Asia/Pacific 62,562 1.5 77,282 1.8
Africa 153,625 3.6 163,549 3.9
Switzerland 886,981 20.9 930,457 22.0
Europe excl.

Emmi does not publish segment results since this would cause significant competitive disadvantages in Switzerland and abroad vis-a-vis customers, unlisted and larger listed competitors.

The divisions are not defined strictly according to geographical considerations. The division Americas includes the Emmi Group companies in the USA, Brazil, Spain, Chile, Tunisia, Mexico and Canada. The division Europe comprises those in Italy, Germany, the Netherlands, France, the UK and Austria. The division Global Trade primarily comprises direct sales from Switzerland to customers in countries where Emmi has no subsidiaries. These include the Asian and Eastern European markets, most South American countries and the Arabian Peninsula.

2. Other operating income

2023 2022
Company-produced additions – 72
Gain on disposal of fixed assets 973 980
Miscellaneous operating income 5,771 7,970
Total 6,744 9,022

3. Other operating expenses

2023 2022
Marketing and sales-related expenses 140,738 130,116
Occupancy expense, maintenance and repair, leasing 99,760 87,758
Insurance, fees and HGV road tax 18,468 19,459
Energy, operating material and supplies 118,571 95,045
Administrative expenses 47,738 44,639
Logistic expenses 139,572 161,493
Other operating expenses 55,110 17,816
Total 619,957 556,326

The increase in the other operating expenses is primarily due to the loss incurred in the reporting year from the sale of Gläserne Molkerei.

4. Depreciation and amortisation

2023 2022
Depreciation of property, plant and equipment 102,290 98,477
Impairment of property, plant and equipment 2,417 14,937
Amortisation of intangible assets 12,396 12,796
Impairment of intangible assets 471 173
Total 117,574 126,383

Of the impairment on property, plant and equipment in the previous year, million relates to Gläserne Molkerei. CHF 13.0

5. Financial result

2023 2022
Interest income 2,515 2,155
Other financial income 170 499
Total financial income 2,685 2,654
Interest expense -18,987 -16,227
Other financial expenses -1,182 -1,316
Total financial expenses -20,169 -17,543
Total excl. currency result -17,484 -14,889
Currency result -6,537 -8,379
Financial result -24,021 -23,268

6. Income taxes

2023 2022
Current income taxes 42,368 38,048
Deferred income taxes -9,743 893
Total 32,625 38,941
Average tax rate 13.7% 17.0%

Net accruals for current income taxes decreased from million in 2022 to million in 2023. Deferred income taxes are calculated for every company using the effective applicable tax rate. As at 2023, the resulting weighted average tax rate was 16.7% (previous year: 18.8%). Adjusted for the non-recurring effects related to the sale of Gläserne Molkerei and , the weighted average tax rate was 18.2% (previous year adjusted: 18.4%). Deferred income taxes include recognised tax claims from tax loss carryforwards amounting to million (previous year: million). CHF 19.5 CHF 18.1 31 December Ambrosi S.p.A. CHF 5.4 CHF 2.6

The effective average tax rate adjusted for the tax effects on the sale of Gläserne Molkerei and amounted to 14.9% in the reporting year. The effective average tax rate adjusted for the tax effect on the impairment of non-current assets at Gläserne Molkerei amounted to 16.6% in the previous year. Ambrosi S.p.A.

Details on change of tax claims from tax loss carryforwards 2023 2022
Recognised tax claims from tax loss carryforwards 5,405 2,575
Unrecognised tax claims from tax loss carryforwards 30,541 25,913
Total tax claims from tax loss carryforwards 35,946 28,488
Recognised tax claims from tax loss carryforwards at 1.1. 2,575 1,059
Additions 3,273 1,949
Utilisation -1,665 -363
Reassessment 1,349 127
Other adjustments -127 -197
Recognised tax claims from tax loss carryforwards at 31.12. 5,405 2,575

The net change of recognised tax claims from tax loss carryforwards decreased the income tax expenses in the reporting year by CHF 2.8 million (previous year: decrease of CHF 1.5 million).

7. Earnings per share

2023 2022
Number of shares at 1.1. 5,349,810 5,349,810
Number of shares at 31.12. 5,349,810 5,349,810
Average number of shares 5,349,810 5,349,810
Net profit in CHF 000s 186,273 182,546
Earnings per share (in CHF) 34.82 34.12

Earnings per share is calculated by dividing the net profit attributable to the shareholders of by the average number of shares outstanding. There are no treasury shares that need to be considered in the calculation of the average number of shares outstanding. Emmi AG

Earnings per share of include the loss from the sale of Gläserne Molkerei and the gain from the sale of Excluding this non-recurring effect, earnings per share amounted to . CHF 34.82 Ambrosi S.p.A. CHF 39.70

In the previous year, earnings per share of include the impairment of non-current assets at Gläserne Molkerei. Excluding this non-recurring effect, earnings per share amounted to . As a result, adjusted net profit rose by 9.3% in the reporting year. CHF 34.12 CHF 36.31

8. Trade receivables

2023 2022
Third parties 484,036 539,313
Associates 903 7,603
Shareholders 492 619
Allowance for doubtful accounts -11,766 -13,951
Total 473,665 533,584

9. Other receivables

2023 2022
Value-added tax 15,895 17,941
Income taxes 4,317 3,770
Other – third parties 40,639 36,866
Other – associates 18 34
Total 60,869 58,611

10. Inventories

2023 2022
Finished products 149,647 143,273
Merchandise 39,292 42,214
Raw materials, semi-finished products and packaging material 316,134 332,483
Other inventories 3,922 4,080
Allowances for inventories -27,684 -13,810
Total 481,311 508,240

11. Prepayments and accrued income

2023 2022
Value-added tax 24,046 21,712
Income taxes 12,251 7,934
Social insurance 3,590 434
Other – third parties 27,584 27,691
Other – associates 613 78
Other – shareholders – 32
Total 68,084 57,881
Thereof current prepayments and accrued income 63,220 52,872
Thereof non-current prepayments and accrued income 4,864 5,009

Other prepayments and accrued income in the reporting year and the previous year consist mainly of prepayments, various refunds and accrued income for advertising costs and milk invoices.

12. Loans and other receivables

2023 2022
Third parties 10,489 13,047
Associates 2,226 3,542
Total 12,715 16,589

The carrying amount of loans and other receivables from third parties includes impaired loans in the amount of million (previous year: CHF 1.5 million). CHF 1.4

13. Property, plant and equipment

Tangible fixed Other
Undeveloped Properties/ Machinery/ assets under tangible
2023 land buildings equipment construction assets Total
Cost at 1 January 2023 20,811 860,295 1,673,321 131,625 87,896 2,773,948
Change in scope of consolidation – -7,837 -19,387 – -130 -27,354
Additions – 2,789 7,895 130,408 1,524 142,616
Disposals – -425 -52,924 – -1,799 -55,148
Reclassification 58 2,275 117,887 -130,232 9,068 -944
Currency translation differences -176 -14,936 -32,145 -6,920 -2,544 -56,721
Cost at 31 December 2023 20,693 842,161 1,694,647 124,881 94,015 2,776,397
Accumulated depreciation at 1 January 2023 1,054 403,298 1,210,067 – 59,286 1,673,705
Change in scope of consolidation – -7,837 -19,311 – -130 -27,278
Depreciation – 20,200 74,658 – 7,432 102,290
Impairment charges – – 2,404 – 13 2,417
Disposals – -312 -52,218 – -1,749 -54,279
Reclassification – -117 -687 – 1,572 768
Currency translation differences -3 -5,264 -19,816 – -1,548 -26,631
Accumulated depreciation
at 31 December 2023 1,051 409,968 1,195,097 – 64,876 1,670,992
Net book value at 31 December 2023 19,642 432,193 499,550 124,881 29,139 1,105,405
Thereof finance leases – – – – 1,491 1,491
2022 Undeveloped
land		 Properties/
buildings		 Machinery/
equipment		 Tangible fixed
assets under
construction		 Other
tangible
assets		 Total
Cost at 1 January 2022 11,679 772,742 1,672,315 128,166 81,277 2,666,179
Additions – 504 8,469 190,856 2,417 202,246
Disposals -133 -4,505 -73,984 – -3,304 -81,926
Reclassification 9,417 93,949 73,892 -185,563 8,086 -219
Currency translation differences -152 -2,395 -7,371 -1,834 -580 -12,332
Cost at 31 December 2022 20,811 860,295 1,673,321 131,625 87,896 2,773,948
Accumulated depreciation at 1 January 2022
Depreciation
Impairment charges		 1,056
–
–		 382,051
18,106
6,136		 1,213,269
72,928
8,801		 –
–
–		 54,385
7,443
–		 1,650,761
98,477
14,937
Disposals – -4,391 -73,209 – -3,267 -80,867
Reclassification – 3,490 -4,713 – 1,223 –
Currency translation differences -2 -2,094 -7,009 – -498 -9,603
Accumulated depreciation
at 31 December 2022 1,054 403,298 1,210,067 – 59,286 1,673,705
Net book value at 31 December 2022 19,757 456,997 463,254 131,625 28,610 1,100,243
Thereof finance leases – – – – 1,841 1,841

Of the impairment on property, plant and equipment in the previous year, million is related to Gläserne Molkerei. CHF 13.0

14. Intangible assets

Other
2023 Trademarks Software intangible
assets		 Total
Cost at 1 January 2023 154,544 83,574 12,124 250,242
Change in scope of consolidation – -390 -15 -405
Additions – 2,230 278 2,508
Disposals – -165 -291 -456
Reclassification – 1,581 71 1,652
Currency translation differences -12,181 -1,476 -569 -14,226
Cost at 31 December 2023 142,363 85,354 11,598 239,315
Accumulated amortisation at 1 January 2023 43,193 73,082 10,366 126,641
Change in scope of consolidation – -372 -15 -387
Amortisation 7,701 4,434 261 12,396
Impairment charges 388 18 65 471
Disposals – -165 -291 -456
Reclassification – -49 -11 -60
Currency translation differences -3,310 -1,201 -429 -4,940
Accumulated amortisation at 31 December 2023 47,972 75,747 9,946 133,665
Net book value at 31 December 2023 94,391 9,607 1,652 105,650
Other
intangible
2022 Trademarks Software assets Total
Cost at 1 January 2022 157,782 85,418 12,073 255,273
Additions – 3,903 12 3,915
Disposals – -5,490 – -5,490
Reclassification – 219 212 431
Currency translation differences -3,238 -476 -173 -3,887
Cost at 31 December 2022 154,544 83,574 12,124 250,242
Accumulated amortisation at 1 January 2022 37,444 74,224 10,044 121,712
Amortisation 8,106 4,452 238 12,796
Impairment charges – 173 – 173
Disposals – -5,488 – -5,488
Reclassification – – 212 212
Currency translation differences -2,357 -279 -128 -2,764
Accumulated amortisation at 31 December 2022 43,193 73,082 10,366 126,641
Net book value at 31 December 2022 111,351 10,492 1,758 123,601

All intangible assets were acquired.

Goodwill from the acquisition

The goodwill from the acquisition of companies and businesses or the purchase of interests in associates or joint ventures is offset against retained earnings at the date of acquisition. The theoretical capitalisation of goodwill and its amortisation over the expected useful life of usually 20 years would have the following effects on the consolidated financial statements as at 31 December 2023:

Theoretical movement schedule for goodwill

Goodwill Goodwill
Group associated
2023 companies companies Total
Cost at 1 January 2023 973,991 18,016 992,007
Additions 1,027 – 1,027
Disposals -14,357 -11,968 -26,325
Currency translation differences -62,473 -189 -62,662
Cost at 31 December 2023 898,188 5,859 904,047
Theoretical accumulated amortisation at 1 January 2023 302,626 15,168 317,794
Amortisation 44,702 324 45,026
Disposals -14,357 -9,578 -23,935
Currency translation differences -17,111 -147 -17,258
Theoretical accumulated amortisation at 31 December 2023 315,860 5,767 321,627
Theoretical net book value at 31 December 2023 582,328 92 582,420
Goodwill
Group		 Goodwill
associated
2022 companies companies Total
Cost at 1 January 2022 965,649 18,693 984,342
Additions 12,982 –
Currency translation differences
Cost at 31 December 2022		 -4,640
973,991		 -677
18,016		 12,982
-5,317
992,007
Theoretical accumulated amortisation at 1 January 2022 252,451 15,027
Amortisation 47,363 644
Impairment 9,090 –
Currency translation differences -6,278 -503 -6,781
Theoretical accumulated amortisation at 31 December 2022 302,626 15,168 267,478
48,007
9,090
317,794

The impairment in the previous year relates to Gläserne Molkerei.

Theoretical impact on shareholders' equity incl. minority interests

31.12.2023 31.12.2022
Shareholders' equity as per balance sheet 1,414,884 1,283,906
Theoretical capitalisation of net book value of goodwill 627,824 672,749
Currency translation differences -45,404 1,464
Theoretical shareholders' equity incl. net book value of goodwill 1,997,304 1,958,119
Theoretical shareholders' equity ratio 60.6% 59.2%

Theoretical impact on earnings before interest and taxes (EBIT)

2023 2022
Earnings before interest and taxes (EBIT) as per income statement 258,248 252,961
Theoretically not necessary goodwill recycling 15,944 –
Theoretical amortisation of goodwill -44,702 -47,363
Theoretical impairment of goodwill – -9,090
Theoretical earnings before interest and taxes (EBIT) after goodwill
amortisation and impairment 229,490 196,508

Theoretical impact on net profit

2023 2022
Net profit as per income statement 186,273 182,546
Theoretically not necessary goodwill recycling 27,153 –
Theoretical amortisation of goodwill -45,026 -48,007
Theoretical impairment of goodwill – -9,090
Theoretical net profit after goodwill amortisation and impairment 168,400 125,449

15. Trade payables

2023 2022
Third parties 274,562 325,699
Associates 5,525 6,795
Shareholders 21,754 22,437
Total 301,841 354,931

16. Other payables

2023 2022
Value-added tax 2,489 2,573
Social insurance 7,891 7,493
Other – third parties 30,224 17,417
Other – related parties 3,353 3,237
Total 43,957 30,720

17. Accrued liabilities and deferred income

2023 2022
Contractual discounts 53,776 47,465
Vacation, overtime, bonuses 38,610 37,322
Income taxes 30,390 27,405
Interest 3,544 3,484
Social insurance 2,550 2,191
Other – third parties 67,578 70,043
Other – associates 950 860
Total 197,398 188,770
Thereof current accrued liabilities and deferred income 193,200 183,407
Thereof non-current accrued liabilities and deferred income 4,198 5,363

Other accrued liabilities and deferred income in the reporting year and the previous year comprise in particular contributions to brand organisations, expected earn-out payments for acquisitions, energy costs, advertising costs, HGV road tax and various services.

18. Financial liabilities

18.1 Bonds

Bond type Bond with reopening option
Nominal amount CHF 200 million
Securities number 21492608 / ISIN CH021492608
Interest rate 1.625%
Term 12 July 2013 to 12 July 2023
Maturity 12 July 2023 at par value

The million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 2013. This accrual was released over the term of the bond. The actual interest rate on the bond is thereby increased from 1.625% to 1.72% per year. The bond was repaid in full on 2023. CHF 2.1 12 July 12 July

Bond type Bond with reopening option
Nominal amount CHF 200 million
Securities number 128965711 / ISIN CH1289657111
Interest rate 2.0%
Term 22 September 2023 to 22 September 2028
Maturity 22 September 2028 at par value

The million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 2023. This accrual will be released over the term of the bond. The issue price at 100.13% led to premium income of million. The actual interest rate on the bond is thereby increased from 2.0% to 2.04% per year. CHF 0.5 22 September CHF 0.3

Bond type Bond with reopening option
Nominal amount CHF 100 million
Securities number 36869775 / ISIN CH0368697758
Interest rate 0.5%
Term 21 June 2017 to 21 June 2029
Maturity 21 June 2029 at par value

The million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 2017. This accrual will be released over the term of the bond. The issue price at 100.4% led to premium income of million. The actual interest rate on the bond is thereby increased from 0.50% to 0.51% per year. CHF 0.4 21 June CHF 0.4

In 2020, securities with a nominal value of CHF 0.5 million were repurchased from the stock exchange for investment purposes.

<-- PDF CHUNK SEPARATOR -->

Bond type Bond with reopening option
Nominal amount CHF 200 million
Securities number 114638248 / ISIN CH1146382481
Interest rate 0.375%
Term 1 December 2021 to 1 December 2031
Maturity 1 December 2031 at par value

The million expenses incurred in connection with the issuance of the bond were capitalised under prepayments and accrued income on 2021. This accrual will be released over the term of the bond. The issue price at 100.54% led to premium income of million. The actual interest rate on the bond was thereby reduced from 0.375% to 0.37% per year. CHF 0.7 1 December CHF 1.1

The proceeds from the bond were used to fund the acquisition of the Athenos business in the USA. Emmi has entered into a cross-currency swap to hedge currency and interest rate risks over the long term. Taking this hedge into account, the net interest rate on the USD nominal value of million is 2.30% instead of 0.375% on the CHF nominal value of million. USD 215.6 CHF 200.0

18.2 Maturing structure of financial liabilities

Thereof
2023 Residual terms
up to 1 year		 Residual terms
1 to 5 years		 Residual terms
over 5 years		 Total secured
by real
estate liens		 Interest rate
in %
Bank overdrafts 68,475 66,310 46,300 181,085 16,178 1.2 – 15.7
Finance lease liabilities 430 305 – 735 – 9.8 – 13.8
Loans from third parties 500 451 6 957 – 0.0 – 8.0
Bonds – 200,000 299,520 499,520 – 0.5 – 2.3
Total 69,405 267,066 345,826 682,297 16,178 –

All bonds and the vast majority of bank loans are set at fixed interest rates. For the bond issued in December 2021, the interest rate was applied after including cash flows from the cross currency swap. There are no financing arrangements in place linked to financial covenants.

In the reporting year, financial liabilities decreased by million. The maturing 1.625% million bond was repaid on 2023. The refinancing took place on 22 September 2023 by means of a million bond with an interest rate of 2.0%. In addition, local financing in Brazilian real was increased and partially amortised in Chilean peso and Tunisian dinar. At the end of the reporting year, the share of financing in Swiss francs was 73.4% (previous year: 72.3%), mainly relating to the three bond issues. 19.1% (previous year: 20.1 %) of the financial liabilities are denominated in euros. million (previous year: million) or 7.5% (previous year: 7.6%) of the financing is denominated locally in emerging market currencies, such as the Brazilian real, Tunisian dinar, or Chilean and Mexican peso. CHF 11.6 CHF 200 2013–2023 12 July CHF 200 2023–2028 CHF 51.7 CHF 52.8

Thereof
secured
Residual terms Residual terms Residual terms by real Interest rate
2022 up to 1 year 1 to 5 years over 5 years Total estate liens in %
Bank overdrafts 45,424 96,472 49,334 191,230 20,070 0.1 – 21.2
Finance lease liabilities 677 434 – 1,111 – 9.8 – 13.8
Loans from third parties 26 2,019 9 2,054 – 0.0 – 8.0
Bonds 200,000 – 299,520 499,520 – 0.5 – 2.3
Total 246,127 98,925 348,863 693,915 20,070 –

19. Provisions

Ongoing
restructuring		 Other
provisions		 Deferred
income taxes		 Total
provisions
As at 1 January 2023 5,000 22,189 56,008 83,197
Additions 1,900 5,949 – 7,849
Utilisation -4,500 -4,323 – -8,823
Release – -1,580 -3,882 -5,462
Currency translation differences – -733 -1,898 -2,631
As at 31 December 2023 2,400 21,502 50,228 74,130
Thereof current provisions 2,400 5,821 – 8,221
Thereof non-current provisions – 15,681 50,228 65,909

The restructuring provisions relate to anticipated costs in connection with the decision to reorganise business activities.

Other provisions include, inter alia, liabilities for staff expenses in foreign countries as required by law (reporting year: CHF 5.7 million, previous year: CHF 6.2 million) and provisions for pending legal matters and business disputes (reporting year: CHF 1.5 million, previous year: CHF 1.6 million). In all cases, the likelihood of occurrence of such events has been assessed at above 50%.

Ongoing
restructuring		 Other
provisions		 Deferred
income taxes		 Total
provisions
As at 1 January 2022 5,450 20,141 54,448 80,039
Additions 4,050 8,569 2,449 15,068
Utilisation -4,500 -3,729 – -8,229
Release – -2,289 – -2,289
Currency translation differences – -503 -889 -1,392
As at 31 December 2022 5,000 22,189 56,008 83,197
Thereof current provisions 2,500 3,457 – 5,957
Thereof non-current provisions 2,500 18,732 56,008 77,240

20. Employee benefit schemes

Nominal Waiver of Other value Balance Balance Result from ECR in
Employer contribution reserve value ECR usage adjustments sheet sheet personnel expenses
(ECR) 31.12.2023 31.12.2023 31.12.2023 31.12.2023 31.12.2022 2023 2022
Pension schemes without
excess/insufficient cover (domestic) 1,610 – – 1,610 1,668 58 380
Pension schemes with excess cover
(domestic) – – – – – – –
Total 1,610 – – 1,610 1,668 58 380
Change vs.
Excess/ previous year
insufficient or taken to
cover as Economic the income Contributions
Economic benefit/ per Swiss benefit/obligation statement limitedto Pension expenses in
economic obligation GAAP FER 26 for the company in the FY the period1) personnel expenses
and pension expenses 31.12.2023 31.12.2023 31.12.2022 2023 2022
Welfare funds 30,120 – – – – – –
Pension schemes without
excess/insufficient cover (domestic) – – – – 21,764 21,764 21,765
Pension schemes without
excess/insufficient cover (abroad) – – – – 3,286 3,286 3,096
Pension schemes with excess cover
(domestic) – – – – – – –
Total 30,120 – – – 25,050 25,050 24,861

1) Including result from employer contribution reserves or comparable items in connection with pension schemes abroad.

Breakdown of pension expenses 2023 Domestic Abroad Total
Contributions to pension plans at cost to the companies 21,706 3,286 24,992
Contributions to pension plans from employer contribution reserves 58 – 58
Total contributions 21,764 3,286 25,050
Change in ECR due to asset performance, value adjustments, etc. – – –
Contributions and change to employer contribution reserves 21,764 3,286 25,050
Increase in economic benefit to the company due to excess cover – – –
Reduction in economic obligations of the company due to insufficient cover – – –
Total change in economic impact arising from excess/insufficient cover – – –
Pension expenses in personnel expenses for the period 21,764 3,286 25,050
Breakdown of pension expenses 2022 Domestic Abroad Total
Contributions to pension plans at cost to the companies 21,385 3,096 24,481
Contributions to pension plans from employer contribution reserves – – –
Total contributions 21,385 3,096 24,481
Change in ECR due to asset performance, value adjustments, etc. 380 – 380
Contributions and change to employer contribution reserves 21,765 3,096 24,861
Increase in economic benefit to the company due to excess cover – – –
Reduction in economic obligations of the company due to insufficient cover – – –
Total change in economic impact arising from excess/insufficient cover – – –
Pension expenses in personnel expenses for the period 21,765 3,096 24,861

21. Disposal of companies

Gläserne Molkerei, which was sold in the reporting year, reported the following main balance sheet items at the time of disposal:

Gläserne
Molkerei		 –
2023 2022
Cash and securities 12,042 –
Trade receivables 7,833 –
Inventories 3,669 –
Other current assets 1,298 –
Non-current assets 143 –
Trade payables 4,492 –
Other current liabilities 4,082 –
Non-current liabilities 7,695 –
Net assets 8,716 –

On 2023, Emmi sold Gläserne Molkerei (consisting of the companies Gläserne Molkerei GmbH, Gläserne Molkerei Münchehofe GmbH and Hofmolkerei Münchehofe GmbH) to Munich-based Mutares, which specialises in turnaround situations. Gläserne Molkerei generated annual sales of around million with over 120 employees. The loss from this transaction amounts to million (before tax) and million (after tax) and is recognised in the income statement in "Other operating expenses" and tax expenses. 14 August EUR 100 CHF 37.2 CHF 28.9

22. Unsettled derivative financial instruments

Positive
value		 Negative
value		 Purpose Positive
value		 Negative
value		 Purpose
31.12.2023 31.12.2022
Forward currency transactions 22,485 430 Hedging 3,234 1,886 Hedging
Interest rate swaps 7,696 123 Hedging – 1,039 Hedging
Total forward transactions 30,181 553 – 3,234 2,925 –
Thereof to hedge future cash flows 8,719 276 – 1,162 1,172 –
Total recognised in the balance sheet 21,462 277 – 2,072 1,753 –

Similar to the underlying transactions, currency forwards, interest rate swaps and other forward transactions used to hedge future cash flows are not recognised in the balance sheet. The result of these derivative instruments is recognised in the income statement on occurrence of the transaction hedged. Derivative financial instruments used to hedge balance sheet positions in foreign currencies are recognised as securities in the current assets or other payables in the current liabilities, respectively. Corresponding changes in value are recognised in the financial result.

In connection with the million bond issued in December 2021 to fund the USD acquisition of the Athenos business in the USA, Emmi entered into a cross-currency swap. This hedges currency and interest rate risks in USD over the entire term of the bond. While the fair value of the currency portion serves as a hedge of balance sheet items and is therefore accounted for in the same way as the hedged item, the fair value of the interest portion is a hedge of future cash flows. Accordingly, the fair value of the interest portion is not recognised. CHF 200

Emmi also has options to acquire additional shares in a number of Group companies with minority interests. At the same time, put options have been granted in general to the counterparties. These options are not recognised in the balance sheet as they represent derivatives on equity instruments of the own organisation, which are explicitly excluded from the scope of The strike price of these options is generally based on the corresponding enterprise value at the exercise date and cannot currently be reliably measured. The exercise date varies depending on the agreement. The maturities range from short term to unlimited options. Swiss GAAP FER 27.

23. Contingent assets and liabilities

Emmi is involved in legal disputes as part of normal business activities. Although the outcome of the lawsuits currently cannot be predicted with certainty, Emmi assumes that none of the disputes will have any significant negative impact on operating activities or on the Group's financial situation. Expected outgoing payments are provided for accordingly. As at the date of the financial statements, the Group had no major contingent assets.

24. Pledged assets and off-balance sheet leasing/rental obligations

Pledged assets 31.12.2023 31.12.2022
Pledges on property, nominal values 246,337 250,478
Pledges on other assets 75 698
Thereof used as security for own liabilities 16,283 20,431
Off-balance sheet leasing/rental obligations
up to 2 years		 23,245 23,072
3 to 5 years 21,853 19,094
over 5 years 24,225 17,336
Total 69,323 59,502

25. Investment obligations and other off-balance sheet liabilities

31.12.2023 31.12.2022
Investment obligations in connection with previously concluded agreements 23,311 17,307
Long-term commodity contracts 962 2,686
Cooperation agreements with suppliers/customers p.m. p.m.

Furthermore, there are milk purchase agreements that can not be quantified.

The long-term commodity contracts are purchase agreements for coffee that will be settled at the market price valid in the period of delivery.

26. Transactions with related parties

Business transactions with related parties are based on arm's length conditions. All transactions are reported in the consolidated financial statements for 2023 and 2022, and consist of deliveries of products and raw materials, loans, and services to and from related parties. The corresponding receivable and payable balances are reported separately in these financial statements (see notes 8, 9, 11, 12, 15, 16 and 17).

Transactions with associates 2023 2022
Net sales 16,887 28,130
Cost of materials and services 39,195 57,348
Other expenses 2,127 2,384
Financial income 307 785
Transactions with shareholders 2023 2022
Net sales 5,964 6,424
Cost of materials and services 257,152 253,253
Other expenses 80 11
Transactions with other related parties 2023 2022
Net sales 63 41
Other expenses 148 157

Milk purchases from the main shareholder are included in cost of materials under transactions with shareholders. These are made at arm's length conditions. Emmi Group is jointly and severally liable within the scope of VAT group taxation for the associated liabilities of Genossenschaft Zentralschweizer Milchproduzenten ZMP and ZMP Invest AG.

Other transactions

The compensation paid to members of the Board of Directors and Group Management is disclosed in the Compensation Report of Emmi AG.

27. Shareholders

Nominal capital 31.12.2023 % 31.12.2022 %
ZMP Invest AG, Lucerne1) 28,488 53.2 28,488 53.2
Zentralschweizer Käsermeister Genossenschaft, Sursee1) 2,150 4.0 2,150 4.0
MIBA Genossenschaft, Aesch (BL)1) 1,697 3.2 1,727 3.3
Other 21,163 39.6 21,133 39.5
Total 53,498 100.0 53,498 100.0

1) ZMP Invest AG, Lucerne, Zentralschweizer Käsermeister Genossenschaft, Sursee, and MIBA Genossenschaft, Aesch (BL), form a group in the sense of Article 121 FinMIA. The Group owns 60.4% (previous year: 60.5%) of the total voting rights.

As at 2016, , Los Angeles, USA, informed us that it owned 268,500 registered shares of Emmi AG (5.019%). No further disclosure notifications have been made since. 7 June Capital Group Companies Inc.

As at 2023, Emmi Wohlfahrtsfonds (welfare fund) owned a total of 6,000 shares of (unchanged from previous year). 31 December Emmi AG

28. Risk management and internal controls

The Board of Directors of has the ultimate responsibility for risk management, while implementation is delegated to Group Management. Irrespective of the type of risk, there is a generally applicable risk management process. As part of a formal process, significant business risks are assessed in a first process step in workshops and individual interviews, and then analysed and evaluated according to the extent of the potential damage and their likelihood of occurrence. The second process step involves risk management and the creation of a list of measures per risk and risk reporting. Emmi AG

The Board of Directors of discussed and approved the risk assessment in the year under review. It monitors the implementation of the defined measures by Group Management. No exceptional risks that went beyond normal limits were identified during the assessment. The process is repeated annually. The following risks were identified as significant risks to the : Emmi AG Emmi Group

  • Milk price difference internationally: The milk price difference between Switzerland and other countries continues to have a negative impact on the sales of domestically produced products both in Switzerland, as the volume of imported milk products increases, and abroad. Although full liberalisation of the Swiss milk market remains a longterm risk, this is absorbed through targeted and sustainable growth abroad. Any risks related to the international growth of the Emmi Group are minimised by a strict focus on the strategy and its implementation.
  • Skills and labour shortage: The skills and labour shortage is intensifying in some of the relevant markets for the . This can lead to vacancies remaining unfilled for longer and increase pressure on personnel costs. Rigorous improvement of our processes, raised automation levels, targeted adjustments to the hiring process and promotion of a unique corporate culture help to mitigate this risk. Emmi Group
  • Inflation: Inflation rose in all markets relevant to the in 2022; in some particularly important markets, such as the US and many European countries, it rose to historically very high levels. Although inflation has eased since then, it remains high in many important markets. Inflationary trends have made a major portion of Emmi's input costs significantly more expensive. This applies not only to various raw materials, but also to energy costs, for example. In addition, we had to acknowledge that wage costs have risen significantly in many countries on the back of high inflation. If in future Emmi is unable to pass on the continuing rise in costs to customers via higher prices, or can only do so with a time lag, this could lead to a loss of margin. Emmi Group
  • Energy risk: Energy price increases, the rationing of energy supplies and interrupted energy supplies of electricity, natural gas and oil pose a significant risk for some production sites. The risk of price increases for electricity, natural

gas and crude oil has already materialised in part, significantly increasing energy costs. The risk of rationing of electricity, gas and oil eased considerably compared with the previous year. The risk of a short-term interruption of energy supplies of electricity and gas is also currently significantly lower. This risk continues to be mitigated through strategic purchasing of energy sources, efficiency improvements, business continuity management and price increases.

  • Currency risk: Currency movements represent a significant risk for the , and has a tendency to increase based on the continuing internationalisation of business activities. We aim to achieve natural hedges with purchases in foreign currencies. Furthermore, in line with the Emmi strategy, expenditure and production volumes in foreign currency zones are being increased through capital expenditures and acquisitions. Emmi Group
  • Price pressure: National and international product tenders, as well as a potentially successful market launch of products made from milk alternatives, threaten in the medium term to result in price erosion, which could lead to a loss of margin mainly for generic products. If the prices of Emmi products remain stable in foreign currency, this may lead to a margin loss. If prices increase, market shares might be lost. However, the successfully established Emmi brands, including those in the milk alternatives segment, offer long-term value creation potential.
  • Trade agreements: The drafting of trade agreements with countries in which Emmi operates presents both opportunities and risks for the company. Switzerland is currently engaged in various talks aimed at negotiating new trade agreements and renegotiating existing ones, but progress is slow. As a result, the Swiss dairy industry is increasingly falling behind its competitors – especially those from the European Union – on the international market in terms of market access conditions. Negotiations that are unfavourable for Emmi could potentially also lead to heavy import pressure in Switzerland. A suspension of the bilateral agreements with the European Union would make it harder for Swiss export products to gain access to the market (e.g. due to the reintroduction of customs duties on cheese), posing a considerable risk. With the growth and local anchoring of our foreign subsidiaries, this risk is becoming smaller in its effect.
  • IT outages: With the growing continuity of processes and increasing penetration and standardisation of , the extent of damage caused by a potential outage increases. Shutdowns of entire plants can very quickly lead to high losses. With increasing investments in , this risk is continuously analysed and mitigated; however, a residual risk remains. IT systems IT security

The is exposed to various financial risks through its business activities, including credit, liquidity and other market risks. Credit risks are managed by means of continual monitoring of day-to-day business and appropriate risk assessment when closing a transaction. Liquidity risk is managed by means of central cash management, which ensures that the planned liquidity requirement is covered by corresponding financing agreements. Other market risks, such as currency and interest rate risks, are partially hedged using derivative instruments. The non-hedged portion is consciously borne as a risk. The currencies of particular relevance to the are the euro, the and the British pound. Emmi Group Emmi Group US dollar

To ensure that the consolidated financial statements comply with the applicable accounting standards and are reported accurately, the has set up effective internal control and management systems, which are reviewed regularly. Accounting and valuation include estimates and assumptions regarding the future. These are based on the knowledge possessed by the respective employees and are regularly examined with a critical eye. Where a financial position includes a major valuation uncertainty that could lead to a significant change in the carrying amount, this uncertainty is disclosed accordingly in the Notes. However, no risks that could lead to a significant correction to the company's assets, financial position or results of operations as reported in the annual accounts were identified as at the balance sheet date. Emmi Group

29. Subsequent events

From the balance sheet date until the consolidated financial statements were approved by the Board of Directors on 28 February 2024, no other major events occurred that could have adversely affected the validity of the consolidated financial statements for 2023 or which would have to be disclosed.

30. Summary of consolidated companies, associates and joint ventures

Capital
in 000s		 Capital
share		 Capital
share
Consolidated companies Head office Currency 31.12.2023 31.12.2023 31.12.2022
Switzerland
Emmi AG Lucerne CHF 53,498 100% 100%
Baumann Käse AG Münchenbuchsee CHF 100 100% 100%
Emmi Dessert International SA in liquidation1) Lugano CHF 250 100% 100%
Emmi Finanz AG Lucerne CHF 100 100% 100%
Emmi International AG Lucerne CHF 5,000 100% 100%
Emmi Langnau AG Langnau i.E. CHF 3,000 100% 100%
Emmi Management AG Lucerne CHF 500 100% 100%
Emmi Schweiz AG Lucerne CHF 5,700 100% 100%
FDS Fromagerie de Saignelégier SA Saignelégier CHF 1,050 86% 86%
Fromco S.A. Moudon Moudon CHF 2,100 60% 60%
Käserei Studer AG Hefenhofen CHF 720 100% 100%
Lesa Lataria Engiadinaisa SA Bever CHF 2,000 80% 80%
Mittelland Molkerei AG Suhr CHF 20,000 100% 100%
Molkerei Biedermann AG2) Bischofszell CHF – – 100%
MOPRO Luzern AG Lucerne CHF 120 100% 100%
Regio Molkerei beider Basel AG Frenkendorf CHF 3,000 80% 80%
Swissexport, Aktiengesellschaft
Schweizerischer Käseexporteure Berne CHF 100 79% 79%
Spain
Admilac Servicios Profesionales, S.L. San Sebastian EUR 3 73% 73%
Altamira Alimentaria, S.L. Renedo EUR 3 73% 73%
Kaiku Corporación Alimentaria, S.L. San Sebastian EUR 82,110 73% 73%
Kaiku Internacional, S.L. San Sebastian EUR 77,877 73% 73%
Kaiku Km0, S.L. Bilbao EUR 625 73% 73%
Lácteos de Navarra, S.L. Pamplona EUR 9,647 73% 73%
Lecherias de Madrid, S.L. Madrid EUR 3 29% 29%
Llet Nostra Alimentaria, S.L. Barcelona EUR 2,764 33% 33%
SDA Bilbao, S.L.3) Bilbao EUR – – 73%
SDA Catalunya Barcelona EUR 3 53% 53%
SDA Guipuzcoa, S.L.4) Bilbao EUR – – 73%
Servicios Logisticos Jundiz, S.L. Vitoria EUR 102 73% 73%
Soc. Servicios Logísticos SDA Central, S.L. Bilbao EUR 3 73% 73%
Tecnología y Calidad Láctea, S.L. San Sebastian EUR 3 73% 73%

1) Emmi Dessert International SA was put into liquidation on 22 December 2023.

2) Molkerei Biedermann AG was merged with Emmi Schweiz AG on 2 June 2023.

3) SDA Bilbao, S.L. was liquidated on 14 December 2023.

4) SDA Guipuzcoa, S.L. was liquidated on 24 March 2023.

Consolidated companies Head office Currency Capital
in 000s
31.12.2023		 Capital
share
31.12.2023		 Capital
share
31.12.2022
Italy
Emmi Dessert Italia S.p.A. Milan EUR 1,000 100% 100%
Emmi Holding Italia S.r.l. Milan EUR 1,714 100% 100%
Emmi Italia S.p.A. Milan EUR 500 100% 100%
Pasticceria Quadrifoglio S.r.l. Piumazzo EUR 104 100% 100%
Netherlands
Bettinehoeve B.V. Etten-Leur EUR 18 100% 100%
Emmi Benelux B.V. Tiel EUR 525 100% 100%
Emmi Finance Netherlands B.V. Tiel EUR p.m. 100% 100%
ENS International B.V.5) Heerhugowaard EUR 18 100% 100%
Goat Milk Powder B.V. Etten-Leur EUR 1 100% 100%
Germany
Emmi Deutschland GmbH Essen EUR 75 100% 100%
Gläserne Molkerei GmbH6) Dechow EUR – – 100%
Gläserne Molkerei Münchehofe GmbH6) Münchehofe EUR – – 100%
Hofmolkerei Münchehofe GmbH6) Münchehofe EUR – – 100%
Molkerei Biedermann GmbH Constance EUR 25 100% 100%
France
Distribution Frais Disfrais SAS Avignon EUR 192 100% 100%
EF Immo 84 SCI Nice EUR 270 100% 100%
Emmi France SAS Nice EUR 6,000 100% 100%
Ets Schoepfer SAS Avignon EUR 1,252 100% 100%
Austria
Emmi Österreich GmbH Nüziders EUR 2,800 100% 100%
Hale GmbH7) Wartberg EUR 18 92% 83%
Leeb Biomilch GmbH7) Wartberg EUR 70 92% 83%
United Kingdom
Emmi UK Limited London GBP 4,717 100% 100%
Tunisia
Centrale Laitière de Mahdia, S.A. Mahdia TND 36,000 47% 47%
Société tunisienne d'engraissement des veaux S.A.R.L. in
liquidation8)		 Mahdia TND 140 47% 47%

5) AVH dairy trade B.V. was renamed to ENS International B.V. on 1 April 2023.

6) Gläserne Molkerei GmbH, Gläserne Molkerei Münchehofe GmbH and Hofmolkerei Münchehofe GmbH were sold on 14 August 2023.

7) Emmi increased both of its stakes in Hale GmbH and Leeb Biomilch GmbH from 83% to 92% on 28 July 2023.

Capital
in 000s		 Capital
share		 Capital
share
Consolidated companies Head office Currency 31.12.2023 31.12.2023 31.12.2022
United States
Bello LLC Delaware USD p.m. 88% 88%
Classe Foods LLC Delaware USD p.m. 88% 88%
Cypress Grove Chèvre, Inc. Arcata USD 202 100% 100%
Emmental Cheese Corp. Orangeburg USD 6 100% 100%
Emmi Dessert Intermediate Holdings (USA) LLC New York USD p.m. 100% 100%
Emmi Dessert Participations (USA) Corp. Delaware USD p.m. 100% 100%
Emmi Dessert USA LLC Delaware USD p.m. 88% 88%
Emmi Equator RTD Coffee LLC Delaware USD p.m. 70% 70%
Emmi Holding (USA), Inc. Orangeburg USD 1 100% 100%
Emmi Resume LLC Delaware USD p.m. 100% 100%
Emmi Roth USA, Inc. Monroe USD 2 100% 100%
Emmi USA Inc. Orangeburg USD 800 100% 100%
Jackson-Mitchell, Inc. Turlock USD 27 100% 100%
Luce Foods LLC New Jersey USD p.m. 88% 88%
Luna Foods LLC Delaware USD p.m. 88% 88%
Redwood Hill Farm & Creamery, Inc. Sebastopol USD 835 100% 100%
Switzerland Cheese Marketing (USA) Inc. Orangeburg USD 1 79% 79%
Tomales Bay Foods, Inc. Petaluma USD 895 100% 100%
Vivi Foods LLC New York USD p.m. 88% 88%
Zingg + Co. Inc. Orangeburg USD 1 100% 100%
Mexico
Alimentos Finos del Sureste, S.A. de C.V.8) Cancun, Qroo MXN 100 46% 41%
Comalca 2000, S.A. de C.V.8) Cancun, Qroo MXN 14,960 46% 41%
Comalca Gourmet, S.A. de C.V.8) Cancun, Qroo MXN 12,623 46% 41%
Distribuidora Internacional de Lacteos, S.A. de C.V. Mexico City MXN 50 38% 38%
Distribuidora Mexideli, S.A. de C.V. Mexico City MXN 100 51% 51%
Mexideli 2000 Holding S.A. de C.V. Mexico City MXN 101,759 51% 51%
Mexideli, S.A. de C.V. Mexico City MXN 68,350 51% 51%
Tecnologias Narcisco, S.A. de C.V. Mexico City MXN 60 51% 51%
Chile
Chevrita S.p.A. Santiago CLP 676,077 38% 38%
Distribuidora de Alimentos Chile S.p.A. Santiago CLP 798,271 38% 38%
Eurolac Chile S.p.A. Santiago CLP 47,040,582 73% 73%
Surlat Corporación S.p.A. Santiago CLP 47,008,983 73% 73%
Surlat Industrial S.p.A. Pitrufquen CLP 31,310,389 38% 38%
Quillayes Peteroa S.p.A. Santiago CLP 12,222,584 38% 38%
Quillayes Surlat S.p.A. Santiago CLP 54,392,884 38% 38%
Quillayes Surlat Comercial S.p.A. Santiago CLP 7,934,483 38% 38%
Canada
Emmi Canada Inc. Saint-Hubert CAD 19,150 100% 100%
Switzerland Cheese Marketing Inc. Saint-Hubert CAD 1 79% 79%
9314 – 8591 Québec Inc. Saint-Hubert CAD 3,137 100% 100%
Brazil
Emmi do Brasil Holding Ltda. Sao Paulo BRL 891,000 100% 100%
Laticínios Porto Alegre Indústria e Comércio S.A. Ponte Nova BRL 563,312 70% 70%

8) On 7 June 2023, Mexideli 2000 Holding S.A. de C.V., in which Emmi holds a 51% stake, increased its holdings in Comalca 2000, S.A. de C.V. and Comalca Gourmet, S.A. de C.V. from 80% to 90%, respectively. This also increased Emmi's share of Alimentos Finos del Sureste, S.A. de C.V., which is wholly owned by Comalca Gourmet, S.A. de C.V.

The percentage of voting rights controlled by the Emmi Group in the subsidiaries of Kaiku Corporacion Alimentaria, S.L. and the subsidiaries of Mexideli 2000 Holding S.A. de C.V. differs from the capital share since Emmi controls these subsidiaries through its control of the parent companies.

Associates and joint ventures Head office Currency Capital
in 000s
31.12.2023		 Capital
share
31.12.2023		 Capital
share
31.12.2022
Switzerland
BO Butter GmbH Berne CHF 500 33% 33%
Cetra Holding SA Mezzovico-Vira CHF 250 34% 34%
FDC Fromagerie de Courgenay SA Courgenay CHF 990 25% 25%
Floralp Butter GmbH Berne CHF 125 33% 33%
Sbrinz Käse GmbH Sursee CHF 180 24% 24%
Switzerland Cheese Marketing AG Berne CHF 290 23% 23%
Thurgauische Käse-Reifungs AG Weinfelden CHF 2,000 25% 25%
Spain
Batiovo I.A.E. Madrid EUR 12 37% 37%
NaturAll BBVV-2018, S.L. Corella EUR 2,617 18% 18%
Serkolat Bide, S.L. San Sebastian EUR 8 37% 37%
Italy
Ambrosi S.p.A.1) Brescia EUR – – 25%
Sepa S.r.l. Pieve Porto Morone EUR 100 40% 40%
Germany
Carl Fr. Scheer GmbH + Co. KG Willstätt EUR 500 25% 25%
Scheer Verwaltungs u. Beteiligungs GmbH Willstätt EUR 26 25% 25%
United States
Big Red Cheese Company LLC2) Monroe USD – – 50%
EB Snacks LLC3) Delaware USD – – 50%
Emmi Meister LLC Fitchburg USD 2 50% 50%
Kindred Creamery LLC Fitchburg USD 1 30% 30%

1) The minority stake in Ambrosi S.p.A. was sold on 3 July 2023.

2) Big Red Cheese Company LLC was liquidated on 14 April 2023.

3) EB Snacks LLC was liquidated on 5 July 2023.

Auditor's report

StatutoryAuditor's Report

To the General Meeting of Emmi AG, Luzern

Report on the Audit of the Consolidated Financial Statements

Opinion

We have audited the consolidated financial statements of Emmi AG and its subsidiaries (the Group), which comprise the consolidated balance sheet as at 31 December 2023 and the consolidated income statement, consolidated statement of changes in equity and consolidated cash flow statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the consolidated financial statements (pages 100 to 138) give a true and fair view of the consolidated financial position of the Group as at 31 December 2023, and its consolidated results of operations and its consolidated cash flows for the year then ended in accordance with Swiss GAAP FER and comply with Swiss law.

Basis for Opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's Responsibilities for the Audit of the Consolidated Financial Statements" section of our report. We are independent of the Group in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

REVENUE RECOGNITION FROM SALES OF PRODUCTS

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

REVENUE RECOGNITION FROM SALES OF PRODUCTS

Consolidated net revenue from sales of products amount to CHF 4,210 million in the financial year 2023.

Revenue from the sale of products is recognised in the income statement when the risks and rewards as well as the title over the goods are transferred to the buyer, generally upon shipment. Net sales are reported net of credit notes and sales deductions.

Net sales form an important basis for assessing the course of business and the performance of the group and are therefore in the focus of internal and external stakeholders.

The fact that different delivery times, contractual terms and Incoterms have to be considered when determining the correct time for recognising revenue leads to an increased audit risk.

In addition, there is a risk of management overriding controls to achieve planned results.

Accordingly, we focused our audit in this area on the existence of revenue transactions and their recognition in the correct period.

Based on these considerations, we determined revenue recognition to be a key audit matter.

Key Audit Matter Our response

As part of our audit, we assessed the appropriateness of the accounting policies used for recognising revenue and specifically, regarding the recognition in the correct accounting period.

We obtained an understanding of the revenue recognition process from order to receipt of payment and, based on this, critically assessed whether the transactions are completely and accurately recognised in the consolidated financial statements.

For the identified key controls in the area of revenue recognition, we assessed the existence (design and implementation) of the relevant controls and tested their operating effectiveness on a sample basis.

Our procedures included, amongst others, the following audit procedures:

  • On a sample basis, we reconciled sales transactions before and after the balance sheet date with delivery notes and customer contracts. Based on this, we verified the transfer of title to the buyer and thus the recording in the correct reporting period in accordance with the agreed terms.
  • On a sample basis, we reconciled the accounts receivables balances as at the balance sheet date with third party confirmations or, alternatively, with delivery documents, invoices and/or incoming payments.
  • For selected companies, we have verified the existence and accuracy of sales transactions by using data analytics.
  • On a sample basis, we examined credit notes issued after year-end and payments received.
  • In addition, we performed analytical procedures at Group level as well as at company level for selected entities. These included, among other things, analyses of the developments of sales and margins.

In addition to the audit procedures described above, we assessed the risk of management overriding controls by analysing manual journal entries in sales accounts.

For further information on revenue recognition refer to the following:

  • Principles of valuation, pages 107 to 111
  • Segment reporting, pages 112 to 113

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements of the company, the remuneration report and our auditor's reports thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' Responsibilities for the Consolidated Financial Statements

The Board of Directors is responsible for the preparation of the consolidated financial statements that give a true and fair view in accordance with Swiss GAAP FER and the provisions of Swiss law, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.
  • Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  • Evaluate the overall presentation, structure and content of the consolidated financial statements, including the
    disclosures, and whether the consolidated financial statements represent the underlying transactions and
    events in a manner that achieves fair presentation.
  • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.

We recommend that the consolidated financial statements submitted to you be approved.

KPMG AG

François Rouiller Licensed Audit Expert Auditor in Charge Manuel Odoni Licensed Audit Expert

Lucerne, 28 February 2024

Contents

Financial statements of Emmi AG

Share information of Emmi AG

157 Share information of Emmi AG

Income statement

in CHF 000s

Notes 2023 2022
Income from investments 2.1 126,619 125,710
Other financial income 2.2 20,081 16,158
Other operating income 7,523 7,338
Total income 154,223 149,206
Financial expenses 2.3 -18,500 -15,605
Personnel expenses -1,460 -1,422
Other operating expenses -7,628 -7,169
Direct taxes -488 -254
Total expenses -28,076 -24,450
Net profit 126,147 124,756

Balance sheet

in CHF 000s

Available earnings

Assets Notes 31.12.2023 % 31.12.2022 %
Cash and cash equivalents 2,934 4,530
Other current receivables from third parties 47 70
Other current receivables from companies in which the entity
holds an investment 60,317 104,521
Prepayments and accrued income 341 857
Current assets 63,639 4.0 109,978 7.1
Loans to companies in which the entity holds an investment 92,600 128,011
Investments in subsidiaries and associates 2.4 1,432,343 1,309,064
Financial assets 1,524,943 1,437,075
Prepayments and accrued income 84 112
Non-current assets 1,525,027 96.0 1,437,187 92.9
Total assets 1,588,666 100.0 1,547,165 100.0
Liabilities and shareholders' equity
Current interest-bearing debts due to third parties 27,780 –
Other current payables to third parties 222 300
Accrued liabilities and deferred income 2,438 1,803
Provisions 62 62
Current liabilities 30,502 1.9 2,165
Non-current interest-bearing debts due to third parties 92,600 128,011
Provisions 648 648
Non-current liabilities 93,248 5.9 128,659
Liabilities 123,750 7.8 130,824
Share capital 2.5 53,498 53,498 0.1
8.3
8.4
Legal capital reserves

– Reserves from capital contributions 2.6 8,294 8,294 Legal retained earnings 2,886 2,886 Voluntary retained earnings 1,270,000 1,225,000

– Profit brought forward 4,091 1,907 – Net profit 126,147 124,756

Shareholders' equity 1,464,916 92.2 1,416,341 91.6 Total liabilities and shareholders' equity 1,588,666 100.0 1,547,165 100.0

Statement of changes in equity

in CHF 000s

Share capital Legal capital
reserves		 Legal retained
earnings		 Voluntary retained
earnings		 Available
earnings		 Total
Shareholders' equity at
1 January 2020 53,498 8,294 2,886 1,105,000 106,435 1,276,113
Allocation – – – 40,000 -40,000 –
Dividend – – – – -64,198 -64,198
Net profit for the year – – – – 101,048 101,048
Shareholders' equity at
31 December 2020 53,498 8,294 2,886 1,145,000 103,285 1,312,963
Allocation – – – 30,000 -30,000 –
Dividend – – – – -69,548 -69,548
Net profit for the year – – – – 123,067 123,067
Shareholders' equity at
31 December 2021 53,498 8,294 2,886 1,175,000 126,804 1,366,482
Allocation – – – 50,000 -50,000 –
Dividend – – – – -74,897 -74,897
Net profit for the year – – – – 124,756 124,756
Shareholders' equity at
31 December 2022 53,498 8,294 2,886 1,225,000 126,663 1,416,341
Allocation – – – 45,000 -45,000 –
Dividend – – – – -77,572 -77,572
Net profit for the year – – – – 126,147 126,147
Shareholders' equity at
31 December 2023		 53,498 8,294 2,886 1,270,000 130,238 1,464,916

Notes to the financial statements

in CHF 000s

1. Principles

1.1 General aspects

These financial statements were prepared according to the provisions of the Swiss Law on Accounting and Financial Reporting (32nd title of the Swiss Code Obligations).

Where not prescribed by law, the significant accounting and valuation principles applied are described below.

1.2 Securities listed on a stock exchange

Securities with a short-term holding period are valued at their quoted market price as at the balance sheet date. A valuation adjustment reserve has not been accounted for.

1.3 Financial assets

Financial assets include long-term loans and investments. Loans granted in foreign currencies are translated at the rate at the balance sheet date, whereby unrealised losses are recorded but unrealised profits are not recognised (imparity principle).

1.4 Non-current interest-bearing debts

Interest-bearing debts are recognised in the balance sheet at nominal value.

1.5 Foregoing a cash flow statement and additional disclosures in the Notes

As has prepared its consolidated financial statements in accordance with a recognised accounting standard ( ), it was decided not to present additional information on interest-bearing liabilities and audit fees in the Notes as well as a cash flow statement, in accordance with the law. Emmi AG Swiss GAAP FER

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2. Information on balance sheet and income statement items

2.1 Income from investments

This position includes dividend income from investments.

2.2 Other financial income

Other financial income mainly comprises foreign currency gains and interest income on loans granted to companies in which the entity holds an investment.

2.3 Financial expenses

Financial expenses mainly comprise foreign currency losses and interest expenses.

2.4 Investments

Capital
in 000s Capital share Capital share
Currency 31.12.2023 31.12.2023 31.12.2022
Switzerland
Baumann Käse AG, Münchenbuchsee CHF 100 100% 100%
Cetra Holding SA, Mezzovico-Vira CHF 250 34% 34%
Emmi Finanz AG, Lucerne CHF 100 100% 100%
Emmi International AG, Lucerne CHF 5,000 100% 100%
Emmi Langnau AG, Langnau i.E. CHF 3,000 100% 100%
Emmi Management AG, Lucerne CHF 500 100% 100%
Emmi Schweiz AG, Lucerne CHF 5,700 100% 100%
Fromco S.A. Moudon, Moudon CHF 2,100 60% 60%
Käserei Studer AG, Hefenhofen CHF 720 100% 100%
Mittelland Molkerei AG, Suhr CHF 20,000 100% 100%
Molkerei Biedermann AG, Bischofszell1) CHF – – 100%
MOPRO Luzern AG, Lucerne CHF 120 100% 100%
Switzerland Cheese Marketing AG, Berne CHF 290 23% 23%
Austria
Hale GmbH, Wartberg2) EUR 18 92% 83%
Leeb Biomilch GmbH, Wartberg2) EUR 70 92% 83%
Germany
Emmi Deutschland GmbH, Essen EUR 75 100% 100%
Italy
Emmi Holding Italia S.r.l., Milan EUR 1,714 70% 70%
Netherlands
Emmi Finance Netherlands B.V., Tiel EUR p.m. 100% 100%
Spain
Kaiku Corporación Alimentaria, S.L., San Sebastián EUR 82,110 73% 73%
United Kingdom
Emmi UK Limited, London GBP 4,717 100% 100%
Canada
Emmi Canada Inc., Saint-Hubert CAD 19,150 100% 100%
United States
Emmi Holding (USA), Inc., Orangeburg USD 1 100% 100%

1) Molkerei Biedermann AG was merged with Emmi Schweiz AG on 2 June 2023.

The above-mentioned investments are directly held by . Investments that are indirectly held by are mentioned in of the consolidated financial statements. Emmi AG Emmi AG note 30

2) Emmi increased both of its stakes in Hale GmbH and Leeb Biomilch GmbH from 83% to 92% on 28 July 2023.

2.5 Share capital and significant shareholders

The share capital of as at 2023 consists of 5,349,810 registered shares with a nominal value of (unchanged from previous year). KCHF 53,498 31 December CHF 10

1,035,724 shares or 19.4% were not registered as at 2023 (previous year: 1,036,844 shares were not registered or 19.4%). 31 December

The following significant shareholders with more than 3% of voting rights are known to the company:

Nominal capital 31.12.2023 % 31.12.2022 %
ZMP Invest AG, Lucerne1) 28,488 53.2 28,488 53.2
Zentralschweizer Käsermeister Genossenschaft, Sursee1) 2,150 4.0 2,150 4.0
MIBA Genossenschaft, Aesch (BL)1) 1,697 3.2 1,727 3.3
Other 21,163 39.6 21,133 39.5
Total 53,498 100.0 53,498 100.0

1) ZMP Invest AG, Lucerne, Zentralschweizer Käsermeister Genossenschaft, Sursee, and MIBA Genossenschaft, Aesch (BL), form a Group in the sense of Article 121 FinMIA. The Group owns 60.4% (previous year: 60.5%) of the total voting rights.

As at 2016, , Los Angeles, USA, informed us that it owned 268,500 registered shares of (5.019%). No further disclosure notifications have been made since. 7 June Capital Group Companies Inc. Emmi AG

As at 2022, Emmi Wohlfahrtsfonds (welfare fund) owned a total of 6,000 shares of (unchanged from previous year). 31 December Emmi AG

2.6 Capital contribution reserve

31.12.2023 31.12.2022
Confirmed by the tax authorities 2,522 2,522
Not confirmed by the tax authorities 5,772 5,772
Total 8,294 8,294

The capital contribution reserve results from capital contribution payments above the nominal amount over past years.

3. Other disclosures

3.1 Full-time equivalents

In the reporting year and in the previous year, Emmi AG employed fewer than 10 employees on average.

3.2 Collateral provided for liabilities of third parties

31.12.2023 31.12.2022
Guarantees and joint liability for loans of Group companies 698,530 713,939
Of which used by Group companies 504,727 508,681
Other guarantees for Group companies 1,339 1,339

3.3 Contingent liabilities

is jointly and severally liable for the VAT liabilities of the other Swiss-domiciled Emmi companies and of the Central Switzerland Milk Producers Cooperative (ZMP) and ZMP Invest AG. Emmi AG

3.4 Net release of hidden reserves

No hidden reserves were released in the reporting year or in the previous year.

3.5 Significant events after the balance sheet date

From the balance sheet date until the financial statements were approved by the Board of Directors on 2024, no other major events occurred that could have adversely affected the validity of the financial statements for 2023 or which would have to be disclosed. 28 February

Proposed appropriation of available earnings

in CHF 000s

Available earnings 31.12.2023 31.12.2022
Retained earnings carried forward 4,091 1,907
Net profit 126,147 124,756
Available for distribution by the General Meeting 130,238 126,663

Appropriation of available earnings

The Board of Directors proposes that the General Meeting approve the distribution of a dividend of (previous year: ) gross per registered share for financial year 2023, to be paid out of retained earnings (subject to withholding tax). CHF 15.50 CHF 14.50

Earnings available for distribution by the General Meeting 130,238 126,663
Dividend -82,922 -77,572
Allocation to voluntary retained earnings -45,000 -45,000
Carried forward to new account 2,316 4,091
Total distribution 82,922 77,572
Of which from other available earnings -82,922 -77,572

Auditor's report

StatutoryAuditor's Report

To the General Meeting of Emmi AG, Luzern

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Emmi AG (the Company), which comprise the balance sheet as at 31 December 2023, and the income statement for the year then ended, statement of changes in equity and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the financial statements (pages 145 to 152) comply with Swiss law and the Company's articles of incorporation.

Basis for Opinion

We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our report. We are independent of the Company in accordance with the provisions of Swiss law, together with the requirements of the Swiss audit profession and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. We have determined that there are no key audit matters to communicate in our report.

Other Information

The Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the consolidated financial statements, the stand-alone financial statements of the Company, the compensation report and our auditor's reports thereon.

Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors' Responsibilities for the Financial Statements

The Board of Directors is responsible for the preparation of the financial statements in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of Directors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Board of Directors is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
  • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made.
  • Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report, unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements Report on Other Legal and Regulatory Requirements

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In accordance with article 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors. ists, which has been designed for the preparation of financial statements according to the instructions of the Board of Directors.

We further confirm that the proposed appropriation of available earnings complies with Swiss law and the Company's articles of incorporation. We recommend that the financial statements submitted to you be approved. pany's articles of incorporation. We recommend that the financial statements submitted to you be approved.

KPMG AG

François Rouiller Licensed Audit Expert Auditor in Charge Licensed Audit Expert Auditor in Charge

Lucerne, 28 February 2024

Manuel Odoni Licensed Audit Expert Licensed Audit Expert

Stock exchange information 2023 2022 2021 2020 2019
Share price at 31.12. in CHF 911.00 783.00 1,076.00 911.50 842.50
Year's high (end-of-day position) in CHF 968.00 1,138.00 1,101.00 949.50 967.50
Year's low (end-of-day position) in CHF 798.00 737.00 896.50 732.50 680.00
Market capitalisation at 31.12. in CHF million 4,874 4,189 5,756 4,876 4,507
Average trading volume Units 2,224 3,643 3,086 5,454 5,693
Key share data
Earnings per share in CHF 34.82 34.12 40.51 35.21 36.45
Adjusted earnings per share in CHF 39.70 36.31 40.51 37.86 36.45
Shareholders' equity per share in CHF 241.68 218.58 202.07 210.67 225.58
Return on shareholders' equity1) in % 18.20 -25.93 19.47 9.61 24.94
Distribution per share in CHF 15.50 14.50 14.00 13.00 12.00
Distribution rate2) in % 44.52 42.49 34.56 36.92 32.92
Adjusted distribution rate3) in % 39.04 39.93 34.56 34.34 32.92
Dividend return4) in % 1.70 1.85 1.30 1.43 1.42

1) (Share price gain per share + distribution per share)/share price at the beginning of the year

  • 2) Distribution per share/earnings per share
  • 3) Distribution per share/adjusted earnings per share
  • 4) Distribution per share/year-end closing price

Capital structure at 31.12.

Share capital CHF 000s 53,498 53,498 53,498 53,498 53,498
Divided into number of registered shares Units 5,349,810 5,349,810 5,349,810 5,349,810 5,349,810
Par value per registered share in CHF 10 10 10 10 10
Share ranking for dividends All
Voting rights All registered shareholders have full voting rights
Securities number 1.282.989
ISIN code CH0012829898
Ticker EMMN
Common code 20,592,664
Traded in the SIX Local Caps segment on the SIX Swiss Exchange
Index inclusion SPI, SPI Extra, SPI ex SLI, Swiss All Share Index

Share price 2023

EMMN SE Equity SPI Index

Contents

Report on non-financial matters

1. Foreword

Dear Readers,

Emmi is passionate about manufacturing high-quality dairy products with a tradition dating back more than 100 years. Our purpose – the best dairy moments, today and for generations to come – guides our actions and the way in which we develop our business, brands and portfolio responsibly in the long term. The consistent implementation of our strategy and differentiated market positions with innovative brand concepts and a balanced country and product portfolio form the basis of our successful business model. Emmi is backed by more than 9,000 employees who put their heads, hearts and hands into delivering the best dairy moments every day.

The company was founded in 1907 as a cooperative with the aim of relieving dairy farmers in Central Switzerland of the daily uncertainties of marketing their milk and ensuring them a reliable income. This community-oriented approach is still firmly anchored in the company today. Neither its transformation into a public limited company in 1993, nor the IPO in 2004 nor its continuous internationalisation have ever called this basic idea into question.

As a company that acts in the interests and for the benefit of a community, Emmi has always thought about what corporate responsibility actually entails, how it relates to economic success and how to ensure a healthy balance between the expectations of all parties. While social responsibility towards dairy farmers is intrinsic to the company and Emmi played a key role in supplying the country in the first decades of its existence, other aspects of sustainable entrepreneurship were only introduced later.

In the 1990s, Emmi began to actively promote environmental protection, initially focusing primarily on the environmental impact of its own facilities. Since then, the company has steadily expanded this commitment. Today, Emmi is responsible for the entire upstream and downstream value chain of its products.

We have made our long-standing commitment to sustainability an integral part of our enhanced corporate strategy. Based on the Emmi sustainability model and our netZERO target, we aim to develop our business in a resourceefficient, environmentally friendly and socially responsible manner.

Transparently demonstrating how Emmi actually fulfils this responsibility has formed part of the company's commitment to sustainability for over ten years. Following a comprehensive report on Emmi's commitment to sustainability in the seventh sustainability report in spring 2023, this report on non-financial matters focuses on the aspects now required by Swiss legislation. Non-financial matters are only a subset of the topics identified as material for us and on which we already provide comprehensive information. Concrete, effective and essential measures are increasingly being developed with reference to this additional perspective in order to better understand the interactions in a complex production system and to realise improvements along the value chain.

The Emmi Group's value creation system involves tens of thousands of farming families in rural areas, thousands of suppliers of goods and services and 9,000 employees. We want to ensure that milk, a valuable food, will remain accessible to people for decades to come as something they can enjoy on a daily basis.

Urs Riedener

Chairman of the Board of Directors

Ricarda Demarmels

CEO

2. Introduction

As part of its GRI-compliant reporting, Emmi has reported on its sustainability performance and ambitions every two years since 2011. The 2021/2022 Sustainability Report covering the 2021 and 2022 financial years was published as a stand-alone publication on 5 June 2023 (Emmi Sustainability Report-2021/2022).

This report on non-financial matters essentially builds on the Sustainability Report 2021/2022, but focuses on the elements required by the Swiss Code of Obligations ( ): business model and reporting on nonfinancial matters; environmental matters, social issues, employee concerns, respect for human rights and combatting corruption. Art. 964a–964c CO

Unlike previous sustainability reports, this non-financial report has not been prepared in accordance with the GRI standards and is structured in accordance with the requirements of the Swiss Code of Obligations rather than Emmi's focus topics. In terms of content, the report has been expanded to include events and developments from the 2023 financial year insofar as they relate to legally relevant matters. Likewise, all performance figures cover the 2023 financial year. In order to provide readers of the non-financial report with proper guidance, the document "Scope of report and methodology for Emmi environmental figures" provides further details concerning the definition, scope, methodology and underlying assumptions for the core environmental data in the ESG expert corner.

Unless otherwise stated, the Emmi Group is uniformly referred to as Emmi in this report.

3. About Emmi

Emmi is the dairy leader in Switzerland. The company's roots date back to 1907, when its predecessor organisation was founded by dairy cooperatives in the Lucerne region. The original aim was to relieve dairy farmers in Central Switzerland of the burden of marketing their milk and to ensure that they received a reliable income. This communityoriented approach is still firmly anchored in Emmi today. With its focused strategy, innovative products and brand concepts established in Switzerland and beyond, such as Emmi Caffè Latte and Kaltbach cheese, Emmi has grown into an internationally operating, listed group (EMMN) with a strong local presence in 14 countries.

With more than 9,000 employees, around 70% of whom work outside Switzerland, the Emmi Group generated sales of CHF 4.2 billion in 2023.

3.1 Emmi's business model

Emmi's long-term economic success is based on a focus on the evolving needs of customers and consumers. Emmi, a Swiss-based company with a successful global position, is continuously developing its business.

Based on a responsible business model, a proven strategy and targeted acquisitions, the company has evolved from a regionally anchored organisation into an internationally successful group.

Emmi's strategy focuses on five core areas and is aimed at sustainable, profitable growth.

The five core areas are:

  • the dairy leader in Switzerland,
  • a strong international market player,
  • an innovative leader in selected niches,
  • excellent in what we do, and
  • a role model in sustainability.

Building on its established strengths, it primarily addresses relevant future issues and the changing needs of stakeholders.

Emmi's business model encompasses the global trading and processing of milk, dairy products, plant-based alternative products and other foodstuffs in selected countries. Each company in the Emmi Group has its own individual value chain (see chart below).

In essence, Emmi procures milk – either directly from dairy farmers or via corresponding processes it into dairy products worldwide at 57 of its own production sites in 11 countries and distributes these products to customers such as retailers and food service in around 60 countries. In some cases, products are sold directly to consumers. organisations –

3.2 Key figures Emmi Group

Emmi key figures 2023 2022 2021
Sales in CHF million 4,242 4,230 3,912
Total assets in CHF million 2,715 2,635 2,471
Market capitalisation in CHF million 4,874 4,189 5,756
Investments in CHF million 145 206 153
Milk processed in millions of tonnes 2.03 2.07 2.16

3.3 Impact of business activities on the non-financial matters

Emmi's approach to sustainability focuses on strategically relevant topics that are material in terms of impacts, risks and opportunities. These topics were determined using a double materiality analysis. The assessment perspectives used were business relevance ("financial materiality") and impact materiality ("impact materiality").

This report covers all material topics that are relevant to non-financial matters pursuant to Art. 964b CO.

3.3.1 Impact on environmental matters

The environmental impacts of Emmi's operations are estimated to be high to very high in the following material areas:

  • Reducing emissions
  • Reducing waste (waste food waste and packaging)
  • Reducing water consumption
  • Sustainable dairy
  • Responsible sourcing

Emmi's business involves potential and effective positive and negative impacts on the environment. A large proportion of the environmental impacts and corresponding risks can be attributed to the upstream stages of the value chain – in particular, agricultural production.

Climate

Emmi generates greenhouse gas emissions through its use of fossil fuels in its own facilities and in logistics, as well as through its use of climate-harming refrigerants (Scope 1) and through the energy it purchases, such as electricity or district heating (Scope 2). However, the largest share (> 90%) of greenhouse gas emissions originates in the upstream/ downstream value chain that cannot be directly influenced (Scope 3). The majority of Scope 3 emissions result from milk production itself, mainly due to natural processes such as the formation of methane in the digestive system of cows. In addition, the cultivation of animal feed and the use of farmyard manure are also important sources of emissions (nitrous oxide).

Waste

Waste is generated along Emmi's entire value chain. Relevant waste categories include food waste and packaging. The most significant waste from an environmental point of view is food waste. The focus is not only on the negative environmental impacts of its disposal, but also on the resources wasted in the production of the products – especially milk. From a reputational point of view, however, packaging waste poses the greatest risk for Emmi, as this issue receives a great deal of public and political attention.

Water

Emmi has potential and effective negative impacts on fresh water volumes and water quality in its own facilities and its upstream value chain. Water is used as an ingredient in our production processes and to ensure quality and hygiene. As a result, wastewater from Emmi's plants may be contaminated with organic or chemical residues or may differ too much in temperature to the water into which it is discharged. Agriculture requires large quantities of water to cultivate animal feed and raise livestock, which, depending on the availability of water in the region in question, can be problematic for people and the environment. In intensive agricultural production, the use of fertilisers and the organic waste of livestock farming can negatively affect the quality of surface and groundwater, thus harming soil and aquatic organisms.

Animal welfare

Animal welfare in dairy production depends on factors such as exercise, feeding, space and lighting conditions. Unsuitable husbandry and feeding can have a negative impact on the physical and mental health of the animals. Emmi can influence animal welfare through its sourcing of milk – in particular through binding specifications and controls – and its choice of suppliers.

3.3.2 Impact on social issues

The potential and effective negative and positive impact of Emmi's business activities on social issues is rated as high to very high in the following material topics:

  • Sustainable dairy
  • Responsible sourcing
  • Product quality and safety
  • Nutrition

Emmi's business model creates and maintains jobs in rural areas by boosting demand for dairy products. Entire families in rural areas often depend on the dairy industry for their income, which poses risks to the economic livelihood of these families. Emmi can use guidelines to ensure fair incomes and working conditions. Emmi can promote the health and safety of consumers through high-quality products.

Working conditions in agriculture

Emmi's business model entails responsibility for jobs in the production of animal feed, milk and other agricultural raw materials, such as cocoa, coffee and fruit. All these agricultural activities are associated with the risks of low pay and adverse effects on the physical health of workers. In addition, agriculture in rapidly developing countries poses the risk of forced and child labour. Through sourcing – in particular, specifications and controls – Emmi can influence the conditions under which work is carried out in the upstream stages of the value chain.

Consumer health

Food can influence consumers' health either directly or indirectly. Direct health effects may be caused by high food quality, but also by spoilage or contaminants. Emmi's products may have an impact on a balanced diet as part of an individual's lifestyle, in particular due to their nutritional composition. Excessive consumption of sugar and salt in particular poses a risk to consumers in the context of Emmi's products.

3.3.3 Impact on employee issues

The potential and effective positive and negative impact of Emmi's business activities on employee issues is rated as high to very high in the following material topics:

  • Developing employees
  • Occupational health and safety

Employers have a significant impact on the job satisfaction, performance and economic situation of their employees. By providing basic vocational training and continuing education for its employees, Emmi can contribute to the qualifications and can secure the income of its workforce in their respective region or sector.

Emmi's business activities may have an impact on the physical and mental health of its employees. Machines (risk of injury), noise pollution and extreme temperatures pose significant risks to employees' physical health. Regardless of the type of workplace, work can lead to psychological stress, e.g. due to the human environment, the general conditions or the work to be performed.

3.3.4 Respect for human rights

As a food company, human rights can be affected in Emmi's upstream value chain, in particular when it comes to the production of agricultural raw materials. The impact of Emmi's business on human rights is rated as high to very high in the following key areas:

  • Governance
  • Responsible sourcing (human rights aspects)
  • Impact on human rights
  • Agriculture and supply chain

For Emmi, the supply chain – especially the agricultural supply chain – is of particular relevance when it comes to respecting human rights. Emmi can ensure that human rights are upheld by means of appropriate sourcing specifications.

3.3.5 Combatting corruption

Combatting corruption is part of the following material topic for Emmi:

– Governance

As Emmi operates in countries considered byto be associated with a high risk of corruption, some of its business activities may be affected. Transparency International's corruption index

Corruption in the food industry can have serious consequences for the economy, society and individuals. Corruption can endanger the availability and safety of food and thus the health of consumers. Even products that are merely of inferior quality are damaging to the industry. Corruption can hinder fair competition and lead to unfair economic benefits for some companies.

4. Rules applied

Complying with laws and guidelines is a matter that is of enormous importance to Emmi. This is set out in the company's Group-wide Code of Conduct. The also emphasises the fair treatment of all stakeholders, respect for human rights in accordance with the UN Guiding Principles on Business and Human Rights and the defined quality of its products. Code of Conduct

The rules and standards applied to specific topics are listed in chapter under the respective mattersto . 5 Reporting on non-financial matters 5.1 5.5

5. Report on non-financial matters

5.1 Environmental matters

Environmental matters include aspects of the following topics that are material to Emmi:

  • Reducing emissions
  • Reducing waste
  • Reducing water consumption
  • Sustainable dairy
  • Responsible sourcing

Emmi's business success is highly dependent on the availability of natural resources, both now and in the future. Emmi's sustainability model is a reflection of the company's commitment to the environment, with targets in the areas of greenhouse gases, water and waste.

Emmi carried out an environmental risk analysis during the year under review. The most relevant environmental risks are described in this report. Emmi plans to further develop its strategies and measures for dealing with these significant environmental risks in the coming years.

5.1.1 Reducing emissions

Emmi causes greenhouse gas emissions through its use of fossil fuels in its own facilities, in logistics and through its use of climate-harming refrigerants (Scope 1) and through the energy it purchases, such as electricity or district heating (Scope 2). However, the largest share (> 90%) of greenhouse gas emissions originates in the value chain that cannot be directly influenced (Scope 3). The majority of this is down to milk production itself, in large part due to natural processes such as methane formation in the digestive system of cows. In addition, the cultivation of animal feed and the storage and use of farmyard manure are also significant sources of emissions.

Risks

Around 30% of man-made greenhouse gas emissions are attributable to food production (dairy industry around 4%). The pressure from different stakeholders and the associated reputational risks are correspondingly high. New regulations and demands for measures to reduce greenhouse gas emissions also pose significant climate risks for Emmi's business model. The trend towards a plant-based diet, which is linked to consumers' efforts to protect the climate, can pose both opportunities and risks for Emmi. By offering suitable alternative products, it is possible not only to avoid negative effects on the success of the business, but also to develop new, attractive pillars of business where appropriate.

Material physical climate risks, such as warmer temperatures and water scarcity, affect the availability of necessary raw materials such as fruits and nuts. Climate change may also affect milk production due to changes in the availability of animal feed.

Concept

Scope 1 emissions and Scope 2 emissions

Effective measures are based on professional management systems and reliable data. The starting point for Emmi's climate protection measures in its own activities is the monitoring of energy consumption and greenhouse gas emissions at all production sites. In Switzerland, this is ensured at all production sites by means of environmental management systems. ISO 14001-certified

The energy consumption and emissions of the Swiss sites that lack production activities (headquarters in Lucerne) are not certified. Nonetheless, the key figures are collected and maintained in the environmental management system.

Individual production sites in Europe are also certified according to (Kaiku, Emmi Dessert Italy) and a corresponding KPI management system based on this has been introduced at the other sites. ISO 14001

Emmi's site in Tunisia is also certified according to ISO 14001.

The sites in the Americas do not have any comparable certification, but an analogous KPI management system has been implemented here as well.

Emmi also promotes its own production of renewable electricity and heat. By 2025, the company aims to meet at least 4% of its total electricity consumption globally with its own solar power (end of 2023: 2.8%).

Emmi purchases renewable energy for its electricity supply in the form of green energy certificates. In Switzerland and Europe, the company uses hydropower whenever possible. In Brazil and Chile, it uses wind power from Brazil, in Mexico hydropower from Guatemala and in the US domestic hydropower. At the site in Tunisia, due to a lack of security of supply, the site produces almost all of its own electricity using gas turbines. There is also no biogas or solar technology available, which means there are currently no lower-emission alternatives. Emmi will only consider connecting to a district heating network if the heat is generated using renewable energy sources or from waste heat sources.

Emmi calculates Scope 1 and Scope 2 emissions in accordance with the requirements of the Greenhouse Gas Protocol.

Scope 3 emissions

Milk production accounts for the largest share of Emmi's Scope 3 emissions and is the area offering the greatest potential for climate protection. By 2027, all the milk purchased by Emmi is to be produced in accordance with higher sustainability standards than those applicable in the regions. Emmi defines this as milk that exceeds conventional milk from the relevant region in at least one aspect of sustainability.

In Switzerland, this objective should be met at the beginning of 2024 with the industry standard "Sustainable Swiss Milk". Outside Switzerland, Emmi aims for joint commitments in the sector and individual agreements with milk suppliers. The principles on which these are based have been elaborated by Emmi over the past four years. Emmi has assessed eight aspects of sustainable milk based on a catalogue of criteria developed in collaboration with the School of Agricultural, Forest and Food Sciences at the Bern University of Applied Sciences and in consultation with the WWF: strategy, employment & income, milk quality, animal welfare, biodiversity, energy & materials, climate and the environment. The climate-relevant criteria are:

  • Generation of renewable energy
  • Energy efficiency: use of heat recovery
  • Greenhouse gas emissions (kg CO2e / kg milk)
  • Average life-time daily milk yield
  • Measures to reduce greenhouse gas emissions
  • Measures for carbon storage

Based on the aspects in this catalogue, an assessment is made of how sustainably milk suppliers of Emmi's subsidiaries outside Switzerland are already producing milk. This assessment will be used to set improvement targets for 2027 with the individual companies. As always, Emmi strives to achieve a comprehensive approach that aims to benefit the environment, human beings and animals.

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Objectives

  • by 2027: 60% reduction of own greenhouse gas emissions (Scope 1 and 2, compared to 2014) absolute reduction target
  • by 2027: 25% reduction of greenhouse gas emissions along the value chain (Scope 3, compared to 2019) target refers to the quantity of milk produced
  • by 2025: at least 4% of total electricity consumption to come from our own solar power production
  • by 2027: 100% of milk suppliers to produce according to local above-average standards
  • with its netZERO 2050 vision, Emmi is extending its CO reduction targets to the entire value chain and is striving to achieve a net-zero path. 2

Emmi's reduction targets are science-based and validated by SBTi ( ). In Scope 1 and 2, these fall within the scope of the 1.5-degree target, while the Scope 3 target corresponds to the current best practice in the industry. Science Based Target Initiative

Measures

Scope 1 and 2 emissions

Emmi is focusing on improving energy efficiency to reduce operational greenhouse gas emissions, for example by using state-of-the-art pumps, engines and processes to recover heat.

Replacing fossil fuels with renewable alternatives and optimising processes are further levers for reducing greenhouse gas emissions. District heating, solar energy (in particular on the roofs of the production plants we own) and wood have proven their worth as alternative energy sources. Almost 100% of the electricity purchased by Emmi has come from renewable sources since 2022 (green certificates). Emmi also promotes its own production of renewable electricity and heat, as already mentioned. To this end, the potential for using solar energy was analysed at all of Emmi's production sites. Taking into account efficiency, costs, subsidies and local conditions, a recommendation for further action was formulated for and approved by the Sustainability Steering Committee.

Emmi also stands by its decision to no longer invest in technologies based on fossil fuels.

In the year under review, a biomass plant was installed at Emmi's production site in Loncoche, Chile, which will enable emissions to be reduced by around per year. This currently covers the entire primary energy requirement of the plant. 5,600 tonnes

Scope 3 emissions

"KlimaStaR Milch" project

In Switzerland, where Emmi processes by far the largest quantity of milk compared with the other countries in which it operates, various measures to reduce emissions in milk production are currently being promoted as part of the " " joint project. One of the targets, which is correlated to other project targets, is to reduce greenhouse gas emissions in milk production by 20% by 2027. In the first year of the project, it was possible to measure greenhouse gas emissions on farms and reduce emissions per kilogram of milk by 1%. Compared with other countries, Switzerland has a relatively low CO e value per kilogram of milk (for example, a comparison with the World Food LCA Database shows the following values: Switzerland: 1.45, Brazil: 3.72, Chile: 3.00, Germany: 1.29, Austria: 1.56, Spain: 1.55, Tunisia: 1.55, USA: 1.26). This underscores the ambitious goals of the project. KlimaStaR Milch 2

Further information on the objectives and measures of the "KlimaStaR Milch" project can be found in the following section: 5.2.2 Sustainable dairy – competition for food and land due to milk production.

Climate data for Swiss milk production

As part of the ongoing development of the "Sustainable Swiss Milk" industry standard, the evaluation of a suitable tool was launched in autumn 2023 to collect actual data on greenhouse gas emissions on farms.

Reduction of emissions in Brazil

After Switzerland, Brazil is the country in which Emmi processes its second-largest volume of milk (Laticínios Porto Alegre). A pilot project was launched there in summer 2023 to measure greenhouse gas emissions at suppliers' dairy production facilities and to determine emission reduction measures based on this information. The aim is to collect data from 15 farms over a two-year period. The farms were divided into sub-groups in order to ensure that the overall result was as representative as possible for the different types of farms. The first round of data collection was carried out on the 15 farms in the year under review. The number of farms surveyed is low, but is nonetheless useful to gather initial empirical data. The collected data is currently being evaluated.

Klimatisch of the Swiss meat and dairy industry

The Klimatisch was created in order to solve the challenge of financing the measures and crediting the reduced greenhouse gas emissions to the various players within the sectors and to accelerate the implementation of emission reduction measures. The Klimatisch brings everyone involved in the entire value chain together with the aim of creating a joint "climate protection industry platform" that advocates fair and efficient financing of all implemented and substantiated climate protection measures on farms and strives for a centrally regulated distribution of climate protection services within the value chain.

Primary energy sources purchased 2023 2022 2021
Heating oil MWh 16,687 13,607 19,200
Natural gas1) MWh 326,500 358,753 388,978
Biogas1) MWh 16,191 19,707 9,084
Diesel MWh 4,703 7,057 6,527
Wood MWh 191,943 157,628 159,011
District heating MWh 57,153 56,133 35,2592)
Others MWh 18,045 15,355 9,222
Total MWh 631,493 628,240 627,281
Emmi Group energy consumption 2023 2022 2021
Total energy consumption MWh 858,420 845,087 842,589
Energy intensity (per t of produc3)) MWh/t 0.64 0.63 0.59
Fuel consumption by vehicles 2023 2022 2021
Petrol Litres 643,183 523,900 454,854
Diesel Litres 4,315,722 4,409,616 4,535,676
Total Litres 4,958,905 4,933,516 4,990,530
Electricity 2023 2022 2021
Renewable share MWh 227,871 225,611 213,370
Non-renewable share MWh 33,423 38,620 37,466
Total MWh 261,294 264,231 250,836

1) Partially used for intensive electricity production.

2) Adjustments based on new underlying data.

3) Product = saleable article.

Direct GHG emissions (Scope 1) 2023 2022 2021
Fuels tCO2e 74,949 82,1771) 85,9731)
Refrigerants tCO2e 8,057 5,8681) 2,9121)
Transport/fuels tCO2e 12,799 12,769 12,939
Total Scope 1 tCO2e 95,805 100,814 101,824
Energy indirect GHG emissions (Scope 2) – market based 2023 2022 2021
Electricity (market based) tCO2e 2,819 928 12,531
Other2) tCO2e 295 3022) 317
Total Scope 2 tCO2e 3,114 1,230 12,848
Energy indirect GHG emissions (Scope 2) – local based 2023 2022 2021
Electricity (local based) tCO2e 48,019 47,250 47,510
Other2) tCO2e 295 302 317
Total Scope 2 tCO2e 48,314 47,552 47,827
Other indirect greenhouse gas emissions (Scope 3)
Of which category 1:
Purchased goods and		 2023 2022 2021
services tCO2e 4,786,008 4,642,1291) 4,821,8491)
Of which attributable to
milk and bought-in dairy
products tCO2e 4,593,253 4,436,233 4,615,727
Total Scope 3 tCO2e 5,497,744 5,358,794 5,540,662
Emissions intensity 2023 2022 2021
tCO2e per KCHF sales 1.32 1.29 1.45
tCO2e per t of milk 2.75 2.65 2.62
Proportion of renewable electricity purchased 2023 2022 2021
Division Switzerland 100% 100% 100%
Division Europa 100% 100% 100%

1) Adjustments based on new underlying data.

Emmi has been able to reduce its direct greenhouse gas emissions compared to the baseline year (2014) by 30% (target by 2027: 60%). On the other hand, supply chain emissions have increased compared to the baseline year (2019) by 7% (target by 2027: 25%). Consumption of the company's own solar electricity accounts for 2.8% of overall electricity consumption (target by 2025: 4%).

2) District heating.

5.1.2 Reducing waste

At Emmi, reducing waste means reducing production waste and food waste and designing packaging that conserves resources and is recyclable. Waste occurs throughout Emmi's value chain. Food waste is the biggest burden on the environment. Packaging waste, on the other hand, is a key focus of public debate. This section focuses on the waste generated in Emmi's own facilities during the manufacture of products.

Risks

Waste is a significant cost factor for Emmi. It represents a consumption of resources without any benefit and generally leads to disposal costs.

Concept

When it comes to dealing with waste, Emmi's credo is: "avoid, reduce, recycle." This means prioritising the reduction of unavoidable waste and then finding the best solution to reduce it to the lowest possible residual amount, ideally in a closed loop.

Emmi controls waste management at its production sites by means of environmental management, with a focus on waste that is sent for incineration or landfill.

All production plants in Switzerland have an environmental management system certified in accordance with . Where it is not possible to recycle materials, waste is recycled for energy in waste incineration plants. Organic waste is used in animal feed or disposed of in biogas plants. ISO 14001

At present, some of Emmi's production facilities outside Switzerland still lack basic control mechanisms and data. Emmi is working to close these gaps. Another challenge outside Switzerland is the lack of recycling systems in the vicinity of the sites in North and South America and Tunisia. Emmi is developing individual alternatives to conventional landfill disposal in these locations.

Objectives

  • by 2027: 50% less waste (compared to 2017) in relation to saleable goods
  • by 2027: 0% waste disposed of in landfills (compared to 2017)

Measures

"Zero waste to landfill" certification in Spain

Emmi's Spanish subsidiary Lácteos de Navarra produces yogurt in Pamplona. Following discussions with its disposal service providers, the company managed to ensure that only a minimum of waste ends up in landfills: in 2022, the volume was reduced by 75% to 0.06% of the total volume of waste. Following a successful audit, Lácteos de Navarra was awarded the "2022 cero residuo" certification. Based on a new audit in 2023, 99.61% of waste is now being recycled. In concrete terms, this means that the waste is either treated in biogas plants, that re-use or recycling options have been found, or that it can be used to generate energy.

Reduction of sewage sludge in Tunisia

At Emmi's plant in Tunisia, as at other milk-processing sites, the process wastewater has to be pre-treated. The resulting sewage sludge is currently sent to landfill. Developing an alternative disposal method for this waste is a top priority for the company. Together with an external company, Emmi analysed how process optimisations could be used to reduce the amount of sewage sludge generated. The aim was a 20% reduction by 2023 and a complete closure of the cycle in the future. The reduction target was exceeded. However, the reduction can also be attributed to the reduction in the volume produced and no solution has yet been found to close the loop. The local team is also examining possible solutions such as drying the sludge and converting it into fertiliser or drying it and using it as biomass to generate heat. Another option would be to compost the sludge. The project is challenging because the technologies required for this are not yet widely used in Tunisia.

Collaboration with external partners

In Switzerland, a pilot project for a possible collaboration with an external partner in the waste management sector was initiated in autumn 2023. Analyses were begun at all production sites in autumn 2023, where, among other things, opportunities for optimisation in the waste reduction division were examined. The evaluation of the site inspections is in progress. A final conclusion will be able to be drawn in 2024.

2023 2022 2021
Waste (incineration) t 2,696 2,550 2,970
Waste (landfill) t 7,444 6,869 7,404
Hazardous waste t 231 174 139
Recycled waste1) t 6,222 6,172 6,331
Waste intensity rate
(kg of waste (incineration/landfill) per t of
product2)) 7.59 7.00 7.29

1) This includes recyclable materials that have been recycled (excluding organic waste).

Emmi has been able to reduce its waste intensity rate compared to the baseline year (2017) by 16% (target by 2027: 50%). Waste disposal in landfills has been reduced compared to the baseline year (2017) by 3% (target by 2027: no waste to landfills).

5.1.2.1 Food waste

Food waste occurs throughout Emmi's entire value chain. Food waste is generated upstream from agricultural production and, at Emmi, is generated during product processing. Consumers account for the largest share of food waste. Food waste damages the environment due to greenhouse gas emissions during production, processing, transport and storage.

Risks

Due to food shortages and malnutrition in some countries, food waste is an ethical and political issue. It is also well known that food waste is associated with greenhouse gas emissions. Food waste is therefore often the subject of public debate. A commitment to avoiding food waste is expected from a food company.

Failures or omissions in this regard harbour reputational risks. The cost of wasted food is offset by the cost of preventive or corrective measures. Depending on the situation, reducing food waste may or may not be worthwhile from a purely financial perspective.

2) Product = saleable article.

Concept

Emmi understands food waste as unavoidable food waste. This includes all organic waste that was originally intended for human consumption, such as processed and semi-processed products as well as raw materials and by-products like whey.

One of the ways in which Emmi is pursuing its goal of minimising food waste is Emmi Operational Excellence (EOE). Through EOE, Emmi is continuously optimising its core processes in terms of effectiveness and efficiency. Unavoidable food waste should be processed into food whenever possible. The top priority, however, is to ensure that no goodquality food is thrown away.

Emmi therefore sells surplus or incorrectly packaged products at reduced prices via factory shops, makes them available to employees or donates edible food to charitable organisations.

Emmi has also signed an industry agreement to combat food waste in Switzerland with leading companies and associations in the food industry and also supports projects and campaigns against food waste in private households.

Other sites are also participating. An international concept has not yet been developed. The aim is to roll out the topic to priority sites in 2024.

The availability of data on food waste has so far only been comprehensively documented from Switzerland.

Objectives

– by 2027: 50% less food waste (compared to 2017)

Measures

Donation to "Tischlein deck dich"

The Swiss production sites donate surplus products to "Tischlein deck dich", where they are then distributed to people affected by poverty in Switzerland.

Making use of by-products

Emmi is constantly looking for new options and partnerships to utilise by-products such as whey and oat residues in order to make new products for human nutrition. At the start of 2023, Emmi was able to utilise around of dry whey in the form of baby food. This had previously ended up in animal feed. Innovative projects were launched in 2023 to further process the residue from the production of oat drinks for human nutrition. 3,000 tonnes

"Too Good To Go" partnership

As part of the partnership with Too Good To Go, the "often good after" emblem has been displayed on further products in Switzerland to combat food waste in private households. In 2023, the logo was integrated into another 25 products, with a further 14 products planned for early 2024.

Food Waste1) 2023 2022 2021
Food waste (dry matter) t 11,389 10,737 11,753
Food waste per product2) 3.9 3.7 3.9

1) Data currently only available for division Switzerland.

Emmi has been able to reduce its rate of food waste in Switzerland compared to the baseline year (2017) by 13% (target by 2027: 50%).

5.1.2.2 Packaging

At Emmi, packaging includes all materials used to protect products from external influences and to make them suitable for transport and storage. Emmi uses various materials or combinations of materials depending on the product. Emmi aims to make as much of its packaging as possible recyclable in order to promote the circular economy. Reuse of packaging minimises its environmental impact. Packaging can negatively impact on the environment due to the use of materials that are not readily biodegradable or improper disposal by consumers.

Risks

Food packaging has to meet a wide range of requirements, some of which are not easily compatible. Consumer safety and product protection are Emmi's top priorities. Failures in these areas are associated with significant risks of financial loss and reputational damage. The negative perception of plastics as a packaging material represents a threat to the company's reputation. This may be in the context of the finite resource of crude oil or the climate debate, but also because of the potential health damage caused by the migration of harmful substances (e.g. plasticisers). An increasing number of new regulations banning certain packaging materials are also forcing Emmi to examine alternatives.

Concept

Since 2011, Emmi has been working on reducing the use of materials and optimising packaging, while continuing to ensure that products are protected. Optimisation is based on the waste hierarchy (Directive 2008/98/EC):

    1. Prevention
    1. Preparing for recycling
    1. Recycling
    1. Other Utilisation (e.g. energy recovery)
    1. Disposal.

The circularity concept has become the focus of Emmi's efforts. Only recyclable materials are used for new packaging and the CO emissions of potential packaging systems are taken into account when selecting packaging. Emmi is primarily guided by the Directive on the reduction of the impact of certain plastic products on the environment ( ) and the revised legislation on packaging and packaging waste ( ). 2 Single Use Plastic Directive Packaging and Packaging Waste Regulation

All packaging materials used comply with the regulations regarding food and other country-specific requirements (Commission Regulation (EU) No 10/2011).

2) Product = saleable article.

Circularity as a collective task

Emmi needs broad alliances to achieve its vision of a recyclable packaging landscape. Such partnerships have already taken shape in Switzerland in recent years:

  • Member of the board of the PRISMA association since 2018
  • Member of the Drehscheibe Kreislaufwirtschaft since 2019
  • Sponsor of Realcycle since 2019. manages projects from the Drehscheibe Kreislaufwirtschaft, such as approvals for a closed loop for polystyrene packaging or the Innosuisse project for recycling polypropylene packaging. Emmi is involved in both projects as a partner and sponsor. Realcycle
  • Member of the Steering Committee since 2021 in the Sammlung 2025

While there are currently only a few specifications for packaging design in Switzerland and progress in the packaging sector is primarily driven by initiatives and voluntary commitments in the industry, Emmi has decided to align its business in Switzerland and throughout Europe with the increasingly stringent EU legislation on the handling of plastic waste.

Suppliers share responsibility

Emmi has in recent years undertaken a number of measures to increase the requirements for its suppliers with regard to responsible business conduct. A specific catalogue of requirements has been defined for suppliers of packaging materials. Among other things, it covers the handling of critical substances (e.g. plasticisers), nanotechnology and migration risks.

  • General terms and conditions of purchase of the Emmi Group
  • General requirements for suppliers of raw materials
  • General requirements for suppliers of packaging materials
  • Requirements for product labelling with GS1-128 for suppliers and trading partners

Objectives

  • by 2027: 100% recyclable packaging
  • by 2027: at least 30% recycled materials in plastic packaging

Measures

Improving recyclability

In order to improve the recyclability of yogurt pots, Emmi has significantly improved the separability of their plastic and cardboard components, which will make sorting their individual components simpler in the future.

Switchover of packaging materials

Following the switch from PE to PET of milk-based mixed drinks bottles in Ostermundigen, Emmi is now in a position to collect the bottles via PET Recycling Schweiz and place them in a closed loop.

The launch of a reusable glass milk bottle represents another step that Emmi has undertaken towards circularity together with its customer Coop, one of Switzerland's largest retailers. Glass can be recycled at the end of its useful life. Glass remains in a completely closed loop and can be repeatedly moulded into new bottles without any loss of quality.

For Good Day TetraTop, Emmi is now using mass-balance recycled plastic. The PET milk drink bottles also contain 25% recycled PET. These measures will enable Emmi to further increase its use of recycled plastic.

Plastic savings thanks to sustainable investments

Thanks to various initiatives and investments in new filling systems and packaging tools, Emmi was able to save a further of plastic and aluminium in 2023. For example, optimising the weight of the Emmi Caffè Latte cup has made it possible to save plastic without any negative impact on the consumer experience, product protection or efficiency. The switch from PE to PET for milk-based mixed drinks bottles is another example. 300 tonnes

Emmi measures progress by means of the following performance figures:

Packaging materials1) 2023 2022 2021
Plastic t 11,222 11,163 10,892
Cardboard t 9,366 8,968 8,354
Metal/aluminium t 301 303 271
Glass t 57 238 260
Beverage cartons t 6,228 5,626 5,787
Total t 27,174 26,298 25,564
Percentage of recyclable material1) 2023 2022 2021
Plastic 50% 45% 45%
Percentage of recyclable material1) 2023 2022 2021
Recycled plastic t 342 2532) 79
Use of recycled plastic 3% 2%2) 1%

1) Data currently only available for division Switzerland.

The proportion of recyclable plastic packaging in Switzerland is 50% (target by 2027: 100%), whereas the proportion of recycled material is 3% (target by 2027: 30%).

2) Adjustments based on new underlying data.

5.1.3 Reducing water consumption

In this report, the topic of water covers water use and pollution at Emmi itself as well as in the upstream value chain and, in particular, in agriculture. In the agricultural context, water consumption and water pollution are important factors in the production of plant-based raw materials. In Emmi's own facilities, freshwater consumption and wastewater (e.g. degree of pollution, quantity) are of particular relevance. Water is required in our facilities as an ingredient, for processes and to ensure quality and hygiene in Emmi's own plants.

Risks

Water is particularly important for Emmi's upstream value chain – milk production. Extreme drought or heavy rainfall affect the availability and price of feed, which can have an impact on the quality and price of milk. Water shortages also affect the agricultural production of non-dairy ingredients such as fruit, coffee beans and nuts.

Water is an ingredient for Emmi's own facilities, for processes and for ensuring quality and hygiene. Both the purchasing of fresh water and the treatment and disposal of wastewater are associated with costs.

The WWF Water Risk Filter was applied at all production sites in 2019 in order to identify water-risk areas. This analyses the water risks at a specific location on the basis of twelve criteria. According to this analysis, the production facilities in Tunisia, California and Mexico are located in water-risk areas.

Concept

Most of Emmi's water footprint comes from the production of agricultural raw materials. With the help of the WWF, Emmi has developed an implementation concept for risky commodities.

In this first phase of the strategic management of the focus topic of water, Emmi is focusing on water use in its own facilities, as this will have the greatest impact and is where measurable progress can be quickly achieved.

Minimising the use of fresh water in our own facilities

Emmi has two main objectives for water management at its own production facilities: firstly, the consumption of fresh water should be minimised, particularly in areas where water is scarce. Secondly, the amount of wastewater should be reduced and its contamination with waste products minimised. Emmi has accumulated of experience in professional wastewater management at its Swiss facilities for both of these key measures, which has enabled Emmi to develop proven, scalable approaches: 15 years

  • In order to reduce its freshwater consumption, Emmi relies on reusing water.
  • Optimising the cleaning processes makes it possible to achieve notable reductions in freshwater consumption.
  • In high-risk sites, particular attention is paid to water treatment in order to keep water in the cycle for as long as possible and thus minimise the consumption of fresh water.
  • Wastewater pollution is reduced by reducing product losses in the production process.
  • Wastewater from production facilities is treated according to state-of-the-art processes and local requirements.

Systematic data collection

The key indicators of Emmi's water management are freshwater consumption, wastewater quantity and chemical oxygen demand (COD) for determining and controlling wastewater quality. This data has been collected in Switzerland since 2008 and in facilities outside Switzerland since 2019. Site-specific measures are derived from this data, along with national and local legislation and guidelines. Emmi monitors their effectiveness using corresponding key performance indicators, which are assessed on a quarterly basis.

Careful use of water in milk production

Some of Emmi's subsidiaries outside Switzerland – and their milk producers – are located in water-risk areas. Emmi has therefore also included water criteria in its catalogue of criteria for foreign milk suppliers:

  • Protection of open waters
  • Protection of groundwater

Objectives

Emmi will base its target of reducing water consumption in its own facilities by 2027 on values customary in the industry.

  • 15% reduction of own water consumption in non-risk areas (compared to 2019) the target relates to saleable goods produced (in tonnes).
  • reduced water consumption along the value chain

Emmi believes it has an obligation to reduce water consumption even more quickly in water-risk areas and, as a result, its objectives there are correspondingly more ambitious:

– 50% reduction of own water consumption in risk areas (compared to 2019) – the target relates to saleable goods produced (in tonnes).

Measures

Regular inspections at Emmi Roth

Water leaks in production facilities are not always obvious, but their impact can be significant. Identifying and rectifying such leaks in good time is by no means a matter of course. Quarterly inspections and investigations have been carried out at Emmi Roth in collaboration with the sustainability team since 2023 to identify water leaks. This resulted in the discovery and repair of a major leak in the water softener at the Platteville, Wisconsin site and the brine tank at the Monroe, Wisconsin production site. Emmi strives to raise awareness among its employees, to actively involve them in the process and to raise their awareness of this issue, as their daily activities and proximity to the processes enable early detection of signs of leaks.

Identifying water leaks with specialists

In 2023, the subsidiary Kaiku in Spain initiated the "Ghostbuster" project, with the aim of identifying water leaks that had so far remained undetected. The sustainability team, together with the maintenance staff and with the support of a specialist team from the municipality of Pamplona, inspected the entire drinking water network and checked for leaks. Specialist equipment enabled three major leaks to be identified and subsequently repaired. Kaiku also optimised its cleaning processes in the year under review by adjusting the flushing times.

Recycling water in Emmen, Kaltbach and Suhr

Investments were made in water treatment in Emmen and Kaltbach. A reverse osmosis polisher and treatment with UV rays made it possible for water to be treated and reused for specific purposes. According to the estimate of potential, this means that around of fresh water can be saved annually in Emmen and in Kaltbach. Whenever possible, fresh water is no longer used to generate compressed air in Suhr. Using cooling water in a closed circuit allows approximately of fresh water to be saved each year. 36,400 m3 3,750 m3 78,300 m3

Emmi's focus on reducing water consumption is currently directed towards its own production facilities, therefore no measures could be implemented in 2023 to achieve the goal of "reducing water consumption along the value chain".

Emmi measures progress by means of the following performance figures:

Water withdrawal1) 2023 2022 2021
Total water withdrawal m3 7,182,686 7,229,862 7,308,195
Intensity rate per t of product3) 5.37 5.38 5.14
Water withdrawal in risk areas2) 2023 2022 2021
Total water withdrawal in risk areas m3 1,052,612 1,094,183 1,162,783
Intensity rate per t of product3) 4.67 4.12 4.03
Water withdrawal in non-risk areas 2023 2022 2021
Total water withdrawal
in non-risk areas m3 6,130,074 6,135,679 6,145,412
Intensity rate per t of product3) 5.52 5.70 5.42

1) Water obtained from the respective state water supply or from own wells.

Emmi has been unable to reduce water consumption both in non-risk areas (target by 2027: 15%) as well as in risk areas (target by 2027: 50%) in terms of produced, saleable goods. Water consumption has increased compared to the baseline year by 4% and 12% respectively.

2) Areas at water risk with a high level of water stress: Mahdia, Turlock, Petaluma, Sebastopol, Mexico City and Calera de Tango.

3) Product = saleable article.

5.1.4 Sustainable dairy – animal welfare in dairy production

Through its sourcing of milk and selection of suppliers, Emmi influences the impact of the dairy industry on the environment. By supporting the establishment of sustainable standards and the appropriate processing of milk, Emmi is helping to ensure that sustainable dairy, in which animal welfare is promoted, becomes the norm. This report categorises sustainable dairy as an environmental and social issue. The following section focuses in particular on the environmental aspects.

Risks

Criticism of the dairy industry is primarily based on two environmental issues: greenhouse gas emissions and animal welfare. As a milk processor that does not produce its own milk – with the exception of a goat farm in California – Emmi can only influence animal welfare indirectly by imposing conditions on milk suppliers, yet at the same time bears significant reputational risks in the event of misconduct.

Concept

From the start of 2024, Emmi will only process milk in Switzerland that is produced in accordance with the "Sustainable Swiss Milk" industry standard. Of the nine basic requirements, half focus on animal welfare.

Animal welfare is also an important aspect in Emmi's catalogue of criteria, which is used for milk suppliers outside Switzerland:

  • adequate animal housing facilities
  • regular access to pasture
  • optimized feed rations
  • adequate dehorning
  • limited transport times to slaughterhouse
  • restrictive use of antibiotics
  • adequate productive lifespan / number of lactations
  • rearing of offspring on the farm of their birth (minimum number of days)

The Emmi catalogue contains additional specific criteria for suppliers of goat's or sheep's milk.

Objectives

– by 2027: 100% of milk suppliers will be producing in accordance with local above-average standards

Measures

Industry standard for sustainable Swiss milk

Since February 2024, all of Emmi's milk suppliers have met the requirements of the Sustainable Swiss Milk industry standard and the associated animal welfare requirements.

AENOR certification at Quillayes Surlat, Chile

Emmi's subsidiary Quillayes Surlat in Chile has set itself the target of having the vast majority of its suppliers certified with the animal welfare label AENOR. Four aspects are assessed: species-appropriate feeding, appropriate husbandry, health and natural behaviour. Within these four aspects, 12 different animal welfare criteria are laid down. The farmers are audited to assess their compliance with these criteria. In the year under review, 67 farmers were certified (approximately 80% of the milk volume). This makes Quillayes Surlat the first company in South America to receive this certification for its farmers. Further suppliers will be approached next year. The aim is for certified milk suppliers to account for 90% of the volume of milk.

Milk volumes processed across the entire Group 2023 2022 2021
Cow's milk t 1,930,841 1,979,456 2,080,004
Goat's milk t 99,418 82,573 79,075
Sheep's milk t 2,997 2,506 2,760
Total t 2,033,256 2,064,536 2,161,839
Organic milk volumes processed across the entire Group 2023 2022 2021
Organic sheep's milk1) t 105,742 186,109 228,378
Organic goat's milk t 6,713 5,546 6,528
Organic sheep's milk t 2,792 2,506 2,760
Total t 115,246 194,161 237,667
Proportion processed according to the Sustainable Swiss Milk ("swiss
milk green") standard 2023 2022 2021
Percentage "swissmilk green" label 99% 94% 94%
Percentage of milk suppliers 99% 87% 85%

1) Reduction due to the divestment of Gläserne Molkerei.

Evaluation has started at international level.

5.1.5 Responsible sourcing – environmental aspects in the sourcing of non-dairy raw materials

Emmi takes environmental criteria into account when selecting its suppliers and raw materials. Sourcing policy thus has an indirect impact on raw material production and the associated emissions and environmental impacts. Sourcing enables Emmi to promote environmental protection in the supply chain. This section considers non-dairy raw materials.

Risks

The most significant environmental impacts occur in the upstream stages of Emmi's value chain, particularly in the production of agricultural raw materials, which have a direct impact on the environmental sustainability of the products. Any damage to the environment caused by the production of the required raw materials – for example, the threat to biodiversity caused by deforestation to grow commercially usable products – can have a negative impact on the perception of Emmi's products.

Concept

Emmi procures goods and services worth around billion a year. The most important items are milk and dairy products. Other relevant agricultural goods include raw materials such as sugar and fruit as well as semi-finished products. Additional items include packaging, logistics services and energy. CHF 3.3

Responsible sourcing management

Emmi strives to live up to its corporate responsibility with regard to sourcing. To this end, Emmi developed a Groupwide sustainable procurement policy in 2022. It supplements the Group-wide sourcing guidelines that came into force in 2020, which already set out ethical, social and environmental requirements. The sustainable procurement policy describes standards and procedures for strategic sourcing.

Supplier Code of Conduct

In order to communicate their sustainability expectations to their suppliers, a Supplier Code of Conduct was introduced in 2022. The code covers all aspects of sustainability.

In the area of environmental protection, all applicable local environmental and safety requirements must be complied with and continuous improvement must be demonstrated. There are explicit guidelines on the following topics: waste and emissions, climate protection, conservation of resources, biodiversity, soil protection, deforestation and animal welfare (Emmi Supplier Code of Conduct).

New suppliers are obliged to accept the Supplier Code of Conduct and provide specific information on standards in the categories of quality, environment and social issues. In addition to all new suppliers, Emmi's aim is for existing suppliers to recognise the Emmi Supplier Code of Conduct and implement measures to optimise their own sustainability. Each company sets itself an annual target to achieve this objective.

In the event of an identified violation of the Emmi Supplier Code of Conduct, an internal committee – consisting of representatives from Procurement, Sustainability, Quality and Legal – will decide on the further course of action. As a rule, the priority is targeted supplier development in order to improve the supplier's current situation. In the event of persistent difficulties or a lack of willingness to cooperate on the part of the supplier, a termination of the business relationship is being considered.

Focus on agricultural commodities

The most significant impact on the environment in Emmi's value-added chain comes from the raw materials processed. Of the non-dairy raw materials it uses, Emmi pays particular attention to coffee, cocoa, nuts, fruit and sugar. Specific assessment criteria will be developed by 2024 and tested in initial pilot sourcings in order to evaluate these raw materials in terms of their impact on the sustainability of Emmi's products. Based on these criteria, a guideline for sourcing will be developed that will allow us to uniformly assess suppliers with regard to sustainability. One challenge is the trade-off between different sustainability criteria, ensuring perfect product quality takes priority. Secondary considerations may include whether short transport routes or low water use should be prioritised. Emmi adopts a casespecific approach that takes local conditions into account.

Objectives

  • 100% of new suppliers to have signed the Emmi Supplier Code of Conduct
  • by 2026: all active suppliers managed by Strategic Purchasing to have accepted the Emmi Supplier Code of Conduct
  • all suppliers from critical countries of origin will be analysed once a year with regard to compliance with the Emmi Supplier Code of Conduct

Measures and performance figures

In 2023, the focus was on applying and reviewing the responsible sourcing policy that had been created. Where necessary, adjustments were made.

Emmi Supplier Code of Conduct

Of the almost 2,000 suppliers of direct materials – for production or in the form of finished products – 342 have so far accepted the Emmi Supplier Code of Conduct. Emmi is striving to further increase the number of suppliers that have accepted this Code. Implementing the Emmi Code of Conduct is proving to be challenging, as the company often has limited negotiating power due to comparatively low international sourcing volumes.

5.2 Social matters

Social matters include elements of the following topics that are material to Emmi:

  • Sustainable dairy
  • Responsible sourcing
  • Product quality and safety
  • Nutrition

Environmental aspects of the material topics of sustainable dairy and responsible sourcing are dealt with in section , human rights aspects in sourcing in section . 5.1 Environmental matters 5.4 Respect for human rights

5.2.1 Sustainable dairy – working conditions and income in the dairy industry

For Emmi, the key social aspects of a sustainable dairy industry are jobs in rural areas, decentralised settlement patterns, maintaining intact family structures and the income that the work generates.

Risks

The majority of the company's shares are held by Genossenschaft Zentralschweizer Milchproduzenten (ZMP). As a result of this constellation, farmers, politicians and the general public have high expectations of Emmi when it comes to behaving responsibly towards its milk suppliers. The reputation of Emmi as a whole depends to a large extent on Emmi's behaviour as a player in the Swiss dairy industry.

In many countries where Emmi buys and processes milk, milk production is an important economic and income factor for the rural population in the regions concerned. A milk price that covers the costs of production plays a key role in this. Should this not be the case in the long term, there is a risk that milk production will decline. On the other hand, milk prices that are higher than the market average may jeopardise Emmi's competitiveness and the company's longterm existence.

Concept

Emmi's primary goal is to further develop the dairy industry towards a sustainable and thus future-proof system. From a social point of view, the dairy industry should provide secure jobs and viable incomes for its workers in order to maintain its attractiveness.

Emmi is aware of its shared responsibility for milk producers in its domestic Swiss market. The fact that milk in Switzerland is usually produced by family-owned farms must be taken into account. For example, by means of transparent, long-term, plannable partnerships – and, last but not least, with a milk price that is both affordable and competitive for both sides. As a member of the industry organisation Milch – a platform of the Swiss dairy industry – Emmi works in a constructive manner to further develop the Swiss dairy industry and consistently implements the decisions made by this body, such as the agreed guide prices.

Social sustainability in the "Sustainable Swiss Milk" standard

In 2016, Emmi set itself the target of only processing milk in Switzerland that meets a catalogue of sustainability requirements by 2020. In return, the company committed itself to paying an above-average milk price. The result of several years of discussions within the industry was the production standard for "Sustainable Swiss Milk" in 2019, which has been mandatory for all Swiss dairy farmers since the beginning of 2024. While the nine basic requirements of the standard focus on environmental protection and animal welfare, the additional requirements include social criteria such as the social security of the family members employed in the business, the training of apprentices and the further training of the farm manager.

Social issues in Emmi's global criteria catalogue

By the end of 2027, Emmi only wants to process milk outside of Switzerland that is produced according to higher sustainability standards than those generally applied in the region. Due to its niche activities in many countries, Emmi relies on commitments within the industry and on individual agreements with its milk suppliers. Emmi has elaborated the basis for such agreements over the past four years. Based on a catalogue of criteria developed in collaboration with experts, it assessed eight aspects of sustainable milk. The "strategy" and "employment and income" categories analyse the social sustainability status of Emmi's milk suppliers outside Switzerland:

"strategy" and "employment and income" criteria:

  • Plans to ensure that the supplier continues to produce milk in 10 years' time
  • Legally binding employment contracts for salaried employees
  • Minimum wage for salaried employees
  • Profitability of the business

Dairy as a key driver for the local economy in Mahdia

Emmi runs a unique concept for the sustainable development of the dairy industry in Tunisia. Its Tunisian subsidiary, Centrale Latière de Mahdia (Vitalait), sources its milk from 25,000 milk suppliers. These are often families where the husband has a job away from home and the wife takes care of two or three cows. For these families, dairy farming represents an important additional source of income.

Objectives

– by 2027: 100% of Emmi's milk suppliers worldwide produce according to local above-average standards

Measures

"Fondation Vitalait" supports smallholder farmers in Tunisia

In the year under review, the Fondation Vitalait, in collaboration with the Swiss Agency for Development and Cooperation ( ), was able to extend its support services to a total of 430 farms. Farm workers in Tunisia are often young and without training. They are therefore particularly dependent on a fair income. Thanks to the Fondation Vitalait, farmers are trained in the following topics: increasing productivity (technology and feeding), environmental aspects such as water, renewable energies and achieving optimal cooling of the milk on the farm. In the reporting year, questionnaires were sent to suppliers to assess the current situation, which will allow the impact of the activities to be measured at the end of the project. Furthermore, trainers were schooled in November 2023 and will use their newly acquired knowledge to train farmers over the course of the project. The project will run until the end of August 2024, with a final conclusion to be drawn in the next financial year. SDC

Social aspects in the criteria catalogue

Emmi's subsidiaries Quillayes Surlat in Chile, Kaiku in Spain and Vitalait in Tunisia have applied the criteria catalogue. Together, these subsidiaries account for around a quarter of the milk volume produced by Emmi. Kaiku and Quillayes Surlat defined their targets for 2027 based on the results in the year under review. The target for Vitalait is still pending. As a result, the use of the criteria catalogue has been deprioritised.

Evaluation has started at international level. Figures for Switzerland are provided in section 5.1.4 Sustainable dairy.

5.2.2 Sustainable dairy – competition for food and land due to milk production

Emmi considers milk production to be an important element in a sustainable food system. This is particularly true because farm animals kept for milk production convert indigestible plants – principally grass – into nutrient-rich food for humans. However, this argument is most likely to be used in situations where there is little or no competition for food and land.

Food competition occurs when animals use feed that would also be suitable for human consumption. This is the case, for example, when cows are fed wheat.

Competition for land arises when the feed comes from land that could have been used to grow food for people. This includes, for example, the cultivation of feed grain instead of potatoes on arable land.

Risks

The cultivation of animal feed for milk production and the use of cereals suitable for human consumption to feed animals may compete with food production for human beings. The sourcing of milk produced in competition with human food is critical, especially in areas in which there is food scarcity. This entails reputational risks for Emmi.

Concept and measures

The Swiss dairy industry is striving to achieve grassland-based, site-adapted and climate-friendly milk production that is able to meet the challenges of climate change in a manner that conserves resources. To this end, the "Resource Project for the Promotion of Climate Protection, Site Adaptation and Resource Efficiency in Milk Production" supports dairy farmers in their efforts to reduce greenhouse gases and adapt their dairy farms to their location. In the " " project, Emmi is working with regional partners, dairy farms, other companies in the food industry and the public sector on ways to reduce the greenhouse gas emissions associated with milk production. Solutions are also being developed to minimise competition for food and land. KlimaStaR Milch

Objectives and performance figures

During the six years (2022 to 2027) of the project, the following food and land competition targets are to be achieved on the approximately 240 dairy farms participating in the "KlimaStaR Milch" project:

  • reduction of dairy farmers' food competition by 20%
  • reduction of competition for space by 20%

With regard to food competition, milk producers succeeded in reducing food competition by 9% in the first year of the project by reducing the quantities of concentrated feed they used and by making targeted adjustments to the feed ration. The competition for space aspect is under development; interim results are expected in 2024.

5.2.3 Responsible sourcing – social aspects in the sourcing of non-dairy raw materials

In addition to milk, Emmi also procures raw materials such as sugar, nuts, fruit and coffee. Its sourcing policy gives Emmi an indirect but relevant influence on the conditions under which these raw materials are produced. In addition to human rights, which are dealt with separately in section , the working conditions and remuneration of people involved in the production of raw materials and at the suppliers of these raw materials are of particular relevance. 5.4 Respect for human rights

Risks

Inadequate consideration of social criteria in the sourcing process entails process risks and risks to Emmi's reputation. Emmi's supply chain is complex and its influence on suppliers' working conditions is therefore limited. Ensuring high social standards in the supply chain can represent an opportunity for Emmi and increase the popularity of its products.

Concept and measures

At Emmi, responsible sourcing management encompasses five aspects:

  • Supplier evaluation and monitoring
  • Supplier development
  • Strategic sourcing criteria
  • Internal structures and processes
  • Transparency and traceability

As previously mentioned, the Group-wide sourcing policy encompasses specifications on ethical, social and environmental aspects of sourcing.

The Group-wide sustainable procurement guideline supplements the general sourcing guidelines with topics such as business ethics, fairness, reliability, discretion and the avoidance of conflicts of interest when working with suppliers. It describes standards and procedures for operational and strategic purchasing.

Emmi uses awhen working with its suppliers. The company aims to ensure that new suppliers acknowledge the code and provide specific information on various standards in the quality, environmental and social categories. In addition, they are required to accept a framework agreement as well as general requirements for raw materials or packaging in writing. Supplier Code of Conduct

In the event of an identified violation of the Emmi Supplier Code of Conduct, an internal committee will decide on the further course of action. As a rule, the priority is targeted supplier development in order to improve the supplier's current situation. In case of persistent difficulties or a lack of willingness to cooperate on the part of the supplier, a cancellation of the business relationship is considered.

are the same as those in section under . The objectives and performance figures 5.1 Environmental matters 5.1.5 Responsible sourcing

5.2.4 Product quality and safety

For Emmi, "product quality and safety" are the result of numerous measures along the entire value chain, starting with the selection and sourcing of suitable raw materials and packaging. When processing these raw materials, Emmi follows the principles of good manufacturing practice and meets the strict requirements of various quality standards, thus guaranteeing the safety of its food at all times. It also complies with all relevant legal and regulatory requirements and takes the needs of its customers into account.

Risks

Emmi positions itself as a manufacturer of safe and high-quality products. Protecting consumers is its top priority. Quality non-conformities can have health implications and, for example, may lead to a product recall, which can entail negative consequences for a company's reputation and result in significant financial risks. Selling products that do not meet the highest standards can also damage our relationship of trust with our customers, or even result in them being lost.

Concept

Responsibility for global quality management is anchored in a central Group function, which defines the strategic direction and, above all, also serves to support the country organisations.

Food safety at Emmi is based globally on the HACCP concept (Hazard Analysis Critical Control Points) – a methodology consisting of hazard analysis, risk assessment and risk management in food production, distribution and logistics. This methodology is also used for the release of new process equipment and procedures.

HACCP is an integral part of a quality management system, and the certifications of the production sites are based, among other things, on individual market requirements. This means that different standards recognised by the GFSI (Global Food Safety Initiative) can be applied. In the vast majority of cases, this is FSSC 22000 (Food Safety System Certification) and the IFS standard (International Featured Standards).

All sites are certified in accordance with a standard quality management system. Where market or customer requirements dictate, certification is according to a -recognised standard (e.g. , IFS, BRCGS, SQF). In addition, the quality management systems (QMS) at some production sites are also certified according to general ISO standards. GFSI FSSC 22000

Product safety takes top priority: risk-based, continuous improvement

Emmi's food safety, hygiene and quality standards for its product range and the environment in which these products are manufactured are risk-based and are continuously improved according to the Plan-Do-Check-Act (PDCA) cycle.

All Emmi products and processes used in the production of food are subject to a food safety hazard analysis based on the Codex Alimentarius. The HACCP system identifies all food safety hazards and then thoroughly assesses, monitors and controls them to ensure that Emmi's products do not pose a risk to the consumer. The main hazards are microbiological contamination with pathogens, chemical contamination, undeclared allergenic substances or unwanted foreign bodies in the product.

The Preventive Programmes (PRPs), such as personal hygiene, cleaning systems, avoidance of cross-contamination (particularly with regard to allergens) and pest control are important components of the HACCP concept. These PRPs are the most important basis for ensuring food safety. If the hazard analysis and risk assessment indicate a higher risk in certain locations, additional measures are taken to control chemical, microbiological and physical hazards.

Objectives

The aim is to ensure the highest level of public health and consumer protection by continuously identifying opportunities for improvement and further developing the food safety system.

Measures

Awareness-raising measures for employees

In order to raise awareness among employees, short films on food safety topics were produced in 2023. These are shown regularly on Emmi TV.

Surveys on the quality culture were carried out in the two companies Leeb Biomilch GmbH and Emmi Dessert Italia. The results are under evaluation at the time of writing.

"Food safety sprints" in all divisions

As part of the European Food Safety Initiative (EFSI), several "food safety sprints" were carried out, in particular at the two companies Leeb Biomilch GmbH and Emmi Dessert Italia.

Such a sprint was also conducted for the first time at Emmi Dessert USA and at Emmi Roth in the USA. Here too, the results are still under evaluation at the time of writing.

Development of local quality measures

In the Chilean subsidiary, Emmi introduced the "cost of poor quality" reporting at all sites, trained teams in the continuous improvement process, and with the internal gap analysis tool at each production site the basis for a local quality strategy was developed.

Effectiveness test

In addition to the usual methods for testing the effectiveness of a quality management system, such as audits (internal/ external) and the collection of key figures, the aforementioned food safety sprints make it possible to observe processes and materials over an extended period at the relevant site that allows a detailed insight into the effectiveness of the measures to be obtained.

Emmi uses numerous indicators to measure product quality. The most important key figures are: costs of poor quality or critical incidents in the market (withdrawals/recalls).

Other external complaints and internal deviations are investigated locally. Numerous internal process controls are carried out to inspect raw materials, semi-finished and finished goods, and packaging. Microbiological checks are carried out to ensure that the production environment fulfils the required hygienic conditions for the food production.

Emmi does not publish these key figures for competitive reasons.

5.2.5 Nutrition

Milk is a high-quality food that contains a variety of valuable macro- and micronutrients (fats, proteins, carbohydrates, minerals and vitamins) in a form that is easy for humans to digest. Milk and dairy products are fundamental components of dietary recommendations. While milk consumption is increasing in developing and emerging countries due to these properties, the consumption of animal-based foods is increasingly being questioned in industrialized countries, primarily based on environmental and animal welfare considerations, but also from a health perspective.

In some of the markets that are relevant to Emmi, such as the domestic Swiss market, there has been an increase in demand for low-processed, natural foods in recent years. The trend towards products with additional nutritional benefits – such as lactose-free dairy products, probiotic yogurt, products with a high protein content and no added sugar – is just as relevant for Emmi. Plant-based milk alternatives are also increasingly in demand.

Risks

Nutrition is part of an individual lifestyle and can also reflect personal values. A healthy diet is influenced by many individual factors. Nonetheless, the media, public and political debate about healthy eating often focuses on individual food categories. Depending on the debate, food manufacturers may therefore face opportunities or risks in terms of positioning, sales, image and reputation. Added sugar in fresh products, especially in mixed milk drinks, yogurt and quark, is fraught with risk. Opportunities currently exist for protein-rich products such as cheese, for example, after this product category was criticised in the 1980s and 1990s for its high fat content.

Parallel to the debate on healthy eating and nutrition, and in some cases overlapping with it, different diets present opportunities and risks for Emmi's business model. For example, the vegetarian lifestyle offers opportunities for milk processors, while vegans avoid dairy products altogether. Investing in milk alternatives is one way of turning this risk into an opportunity for the company. Exploiting that opportunity involves making an economic assessment that takes into account the additional costs – e.g. for development and marketing.

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Concept

When developing new products and optimising existing recipes, the focus is on the needs of consumers. Emmi is aware that its products can have an impact on healthy nutrition. However, Emmi believes that nutrition must always be seen in the context of an individual's lifestyle.

While many nutritional topics are cyclical in nature, there is a broad consensus on sugar: excessive consumption of products containing sugar poses health risks. Emmi believes that education, product reformulations and government involvement are needed to minimise these risks and promote more balanced consumption and healthier eating habits. In its Swiss home market, Emmi is strongly committed to this issue, also at a political level.

Vegan milk substitute products have also played a role at Emmi for over 20 years. Emmi manufactures these in-house in Switzerland, Spain, Austria, Italy and the USA.

Objectives

Reduce added granulated sugar in yogurt, quark and milk-based drinks by 10% by 2024 compared to 2019 in Switzerland ("Milan Declaration").

Measures and key performance indicators

Focus on sugar reduction

Emmi's R&D teams always keep sugar reduction in mind both in the development of new products and in the optimisation of existing ranges. For many years now, Emmi has been gradually reducing the sugar content of existing products in order to ensure that the change in taste remains acceptable to consumers. New products are already being developed with a low sugar content.

Interim review of the "Milan Declaration" (Switzerland)

  • Yogurt: the reduction is in line with the targets set out in the Milan Declaration
  • Quark and milk-based drinks (expansion of the "Milan Declaration" in mid-February 2023): potential has been identified and implementation has begun
  • Emmi Caffè Latte, the target value for 2024 was already achieved in 2023

5.3 Employee issues

Employee issues encompass aspects of the following topics that are material to Emmi:

  • Employee development
  • Occupational health and safety
  • Governance (fair and inclusive conditions and the right to participation)

In addition to the material topics updated in the run-up to the 2021/2022 Sustainability Report, this report contains information on "fair and inclusive conditions" and "the right to participation" (summarised under the topic of governance).

Employee issues in the supply chain are dealt with in sections 5.2 Social matters and 5.4 Respect for human rights.

Emmi employs more than 9,000 people worldwide. The UN Guiding Principles on Business and Human Rights and the Fundamental Principles of the form a fundamental benchmark for dealing with the workforce. This is set out in Emmi's . International Labour Organization (ILO) Code of Conduct

5.3.1 Employee development

Employee development covers anything that helps our employees to meet the requirements of their job role now and in the future. Through the targeted development of its employees, Emmi can strengthen its human capital and secure the skills Emmi needs to achieve its strategic objectives.

Risks

Emmi relies on the availability of sufficient workers with the right specialist skills. Companies that train and develop employees not only ensure their own success, but also contribute to a functioning economic system and social prosperity.

Emmi is also aware of its responsibility to ensure the employability of all its employees.

Concept

Individual development requires an appropriate environment. Professional leadership, skills management and a working environment that promotes individual development are essential. Emmi invests in talent development programmes that encompass a range of business units and countries and ensure targeted succession planning is defined for key positions. Emmi also works consistently to ensure that all employees have development plans.

Objectives

By 2027, all employees of the Emmi Group should have a personal development plan. With this broad-based development, Emmi is not only strengthening its employees for their current areas of responsibility. This also creates the basis for being able to fill vacancies internally with people who match the job profile to perfection. In our recruitment, Emmi aims to maintain a balance between the vacancies filled with internal candidates and the vacancies filled with external applicants.

Measures

Emmi is convinced that professional management is an important framework for employee development. Emmi offers Group-wide leadership training courses, which are regularly refined and adapted to current market requirements. At the same time, good and professional management work is continuously reflected on and deepened in numerous local workshops.

With the strategic "Talent and Succession Management" initiative, Human Resources Management at Emmi works with managers across the Group to identify talented individuals and key positions, and systematically plans succession solutions.

Emmi follows a 70-20-10 development approach for all employees at every level: 70% of development takes place in the normal working day, 20% comes through targeted feedback and reflection, and 10% is carried out with internal and external training.

Effectiveness test

Emmi records the extent of training and development and the number of employees with individual development plans across the Group. Emmi also records the percentage of internally filled positions.

Employee surveys are carried out in individual companies or units. These include questions about development opportunities. The aim is to roll out these surveys as standard across the Group from 2025.

Emmi measures progress by means of the following performance figures:

Development plan and vacancies filled with internal candidates 2023 2022
75%
46%		 2021
58%
–
Share of employees with a development plan (Switzerland) 71%
Share of employees with a development plan (Emmi Group) 57%
Number of vacancies filled with internal candidates (Switzerland) 25% 37% 45%
Number of vacancies filled with internal candidates (Emmi Group) 26% 29% –
Training and education
Average hours of training per year 20232) 20221) 2021
All employees 10.22 6.20 6.40
Female 8.75 5.90 5.70
Male 10.96 6.40 6.70

1) Excluding Gläserne Molkerei GmbH, Emmi Österreich GmbH, Leeb Österreich, Pasticceria Quadrifoglio S.r.l., Emmi Canada Inc., Redwood Hill Farm & Creamery Inc., Jackson-Mitchell Inc., Cypress Grove Chèvre Inc., Sda Catalunya.

One out of every two (57%) Emmi Group employees had a development plan during the year under review (target by 2027: 100%). Emmi was able to fill 26% (target by 2027: 50%) of open positions with internal candidates.

5.3.2 Occupational health and safety

At Emmi, occupational health and safety comprises the provision of safe and health-promoting working conditions. Employees should be provided with working conditions without the risk of accidents or injuries at all stages of their work, from the processing of raw materials to the transport of packaged products. Health protection implies a good work-life balance and supports mental health.

Risks

The majority of Emmi employees work in production, in production-related areas or in distribution. This work entails significant risks to physical health. Psychological stress can also occur at all workplaces. Absences or workplace restrictions due to accident or illness may impair the performance of the company. Serious incidents, demonstrable misconduct on the part of the company or accidents on public transport harbour procedural and reputational risks.

2) Excluding Cypress Grove Chèvre, Darey Brands (Redwoodhill + Meyenberg), ENS International B.V.

Concept

Emmi is committed to providing a safe working environment, both for its own employees and for the supervised employees of third-party companies.

At Emmi, responsibility for occupational safety is anchored locally in the country organisations. The central Group function sets the strategic direction and supports the country organisations. Health-related issues are also managed by the HR division. Measures are developed and implemented in close coordination with the occupational safety organisation.

The aim of Emmi's occupational health and safety organisation is to protect employees from damage to their health and to ensure the company's ability to function at all times.

A central instrument for dealing with occupational health and safety in Switzerland is a comprehensive occupational health and safety management system implemented in accordance with the principles of ISO 45001. The international companies include a number of certified companies, such as Emmi Dessert Italia, Kaiku in Spain and Vitalait in Tunisia. All companies comply with local law. Developments are tracked on the basis of a globally implemented key figure management system and, if required, necessary measures are defined with the local companies.

Objectives

Emmi's safety philosophy is to prevent all incidents of personal injury. A significant reduction in the number of accidents is therefore the overriding long-term objective.

The objectives are defined annually for each site based on its respective situation (process risks, technical safety of the plants, safety culture, legal requirements).

Measures

With the aim of supporting the health of the employees, relevant introduction programmes as well as legally mandatory training courses are carried out. Refresher courses are held regularly for high-risk activities such as working at heights or handling forklifts.

Other courses and training sessions relate to occupational health, first aid, evacuation training, the correct use of climbing aids and behaviour in traffic. Various other training courses contribute to health promotion. For example, training courses on health-conscious leadership and training courses on how to improve your own resilience are on offer.

In what is referred to as the "Health & Safety Community", global H&S managers and selected HR partners are presented with topics relevant to occupational health and safety. The participants discuss safety and health-related incidents in order to multiply important findings and appropriate measures as part of the continuous improvement process.

Effectiveness test

Emmi regularly evaluates its safety management with audits. In these audits, systems, procedures, processes and products are reviewed and the fulfilment of specifications and evidence is assessed. The audits are part of the continuous improvement process and are carried out by internal and external bodies.

Emmi measures progress by means of the following performance figures:

Health and occupational safety management maintains a comprehensive system of key figures to identify potential for improvement and to check the effectiveness of the measures taken.

The so-called TIFR (Total Incident Frequency Rate) is provided as a key figure on Group level. The TIFR is calculated from the total sum of all injury cases (irrespective of whether they result in downtime and limited operations, including deaths but excluding commuting accidents) in relation to a million hours worked. In 2023 the TIFR was 24.0 (previous year 24.4) and no fatalities occurred (previous year 0).

5.3.3 Fair and inclusive conditions

Emmi strives to create fair and inclusive working conditions and to offer all employees the opportunity for personal development. Fair and inclusive conditions ensure that the company is perceived as an attractive employer, can act as a role model and contribute to the promotion of inclusion in society.

Risks

Suspected or proven discrimination against employees, for example on the basis of their gender, age, nationality or religious affiliation, entails process and reputational risks and may damage the corporate culture.

Concept

The principle of fair and inclusive working conditions is set out in the Group-wide and within remuneration principles for Emmi employees. Code of Conduct

Objectives

Emmi strives for a non-discriminatory working environment in which all employees feel welcome, valued and inspired.

Measures

Various subsidiaries have been working for years to ensure fair and inclusive conditions. At Group level, Emmi developed a global position on diversity, equality and inclusion in 2023 in order to anchor these issues strategically across the Group. This binding basis is used to define and implement further awareness-raising measures locally. Emmi aligns its remuneration system with its organisational culture and invests in gender-independent and nondiscriminatory remuneration models. To this end, a survey of the local conditions at the subsidiaries will be carried out in 2024 from a legal and labour market perspective.

Effectiveness test

Emmi analyses various key employee figures to identify indications of unequal treatment. The equal pay analysis required by law in Switzerland is one of these tools. As the largest legal entity, Emmi Schweiz AG is certified for equal pay for men and women in accordance with the Gender Equality Act and is within the federal tolerance limit of 5%. The subsidiaries belonging to the Emmi Group are required to review their salary structures on a regular basis and to comply with the legal requirements. This also includes corresponding equal pay analyses.

Emmi encourages all employees to report suspected misconduct or unequal treatment. Points of contact are managers, the personnel/works committees, the Emmi HR department or, if necessary, the Emmi Whistleblowers Line, which also makes it possible to report concerns or information anonymously and confidentially.

Emmi measures progress by means of the following performance figures:

The development of the proportion of women at different hierarchical levels can provide an indication of the status of equality.

Board of Directors
Gender		 2023 2022 2021
Female 43% 44% 44%
Male 57% 56% 56%
Age
Under 30 0% 0% 0%
30 to 50 21% 11% 0%
Over 50 79% 89% 100%
Group Management
Gender		 2023 2022 2021
Female 25% 25% 25%
Male 75% 75% 75%
Age
Under 30 0% 0% 0%
30 to 50 50% 37% 25%
Over 50 50% 63% 75%
Group employees
Gender1)		 2023 2022 2021
Female 33% 31% 31%2)
Male 67% 69% 69%2)
Age
Under 30 19% 14% 15%
30 to 50 55% 56% 56%
Over 50 26% 30% 29%
Number of apprentices, interns, trainees, external employees 2023 2022 2021
Female 402 189 196
Male 693 307 296
Total 1,095 496 492
New employee hires and employee turnover1) 2023 2022 2021
Number of new employees1) 2,288 1,308 1,392
Rate of newly recruited employees 25% 14% 15%
Number of employees who have left
the company 2,202 1,020 856
Employee turnover 24% 11% 9%
Employees by employment contract1) 2023 2022 2021
Permanent 8,929 8,952 8,863
Female 3,045 2,788 2,739
Male 5,884 6,164 6,124
Temporary 367 107 127
Female 57 30 41
Male 310 77 86
Total 9,296 9,059 8,990
Employees by employment type1) 2023 2022 2021
Full-time 8,598 8,221 8,158
Female 2,658 2,258 2,203
Male 5,940 5,963 5,955
Part-time 698 838 832
Female 444 560 571
Male 254 278 261
Total 9,296 9,059 8,990

1) Excluding apprentices, interns, trainees and external employees.

2) Adjustments based on new underlying data.

5.3.4 Right to participation

The right to participation is a central principle of employment law and relates to the right of employees to take an active part in decision-making processes and shaping issues in the working environment. It aims to ensure that employees participate in company activities and that their interests and opinions are taken into account.

Risks

There may be a power imbalance between employees and employers that may have a negative impact on employees. Internal commissions, trade unions and other forms of participation have played an important role in improving working conditions and social justice for decades. Combined with other developments and over time, trade unions have improved the culture of collaboration and feedback in the company – for example through employees' rights of participation.

Depending on the country, however, dealing with trade unions can also be a challenge for Emmi, for example in Germany, Spain or Italy. This sometimes makes direct dialogue with employees more difficult or hinders economically necessary structural adjustments of the company.

Concept

Emmi strives to create a working environment in which employees are allowed to exercise a right of participation, whether in Switzerland through the Employee Committee (Peko) or in an international context through freedom of assembly.

As part of the freedom of assembly, subsidiaries adhere to the legal requirements of the respective country when dealing with trade unions. The basic principles of the International Labour Organization (ILO) serve as a benchmark.

The implementation of employees' rights of participation depends on the respective local conditions:

In the division Switzerland, locations with more than 50 employees have an upstream, first point of contact in the form of the employee committees. These committees are made up of employees and are elected by the workforce for a term of four years. Emmi guarantees that members will not be dismissed or suffer any other disadvantage as a result of the orderly activities they carry out within the framework of workplace participation. In Switzerland, Emmi is not party to any collective bargaining agreements (CBAs).

  • In the division Europe, companies in the following countries are unionised: Benelux, France, Italy, Austria
  • In the division Americas, companies in the following countries are unionised: Brazil, Chile, Spain, Tunisia

The Emmi Whistleblowers Line also enables concerns and information to be reported anonymously and confidentially.

Measures and effectiveness check

Employee surveys are carried out in individual companies or units. These enable employees to play an active role and ask questions about the divisions' abilities, motivation and working environment. The aim is to roll out these surveys across the Group from 2025.

Emmi measures progress by means of the following performance figures:

Collective bargaining agreements 2023 2022 2021
Percentage of employees covered by collective bargaining agreements (Em
mi Group) 43% 53% 53%
Percentage of employees covered by the personnel commission (Switzerland) 100% 100% 100%

5.4 Respect for human rights

Respect for human rights relates primarily to the following material topic for Emmi:

– Responsible sourcing

Environmental aspects of the material topic of responsible sourcing are dealt with in section , while human rights aspects in our own plants are dealt with in section . 5.1 Environmental matters 5.3 Employee issues

As a food company, human rights can potentially be affected in Emmi's upstream supply chain in the production of agricultural raw materials. Emmi must take human rights aspects into account both in its own plants (see section ) and in its supply chain. Respect for human rights is understood comprehensively, but with a particular focus on the exclusion of child labour. 5.3 Employee issues

Risks

If Emmi fails to comply with human rights along its value chain, there is a risk of fines and damage to its reputation. The greatest challenge is respect for human rights in the sourcing of non-dairy raw materials. This is due to the complexity of the supply chain and the limited influence of Emmi as a buyer. On the other hand, comprehensively sustainable sourcing also offers opportunities for appropriately labelled products in selected markets.

Concept

Respect for human rights

Compliance with human rights is governed by the Directive and the . The internal and external auditors carry out regular audits at all Emmi companies. Modern Slavery Act Emmi Code of Conduct

To ensure sustainability in the supply chain, Emmi has introduced a corresponding management system. Its central elements are the Group-wide sourcing guidelines and the Emmi Supplier Code of Conduct. Superordinate information on these two frameworks can be found in section . In the area of human rights, the Supplier Code of Conduct contains requirements on forced labour, freedom of assembly, working conditions, and child labour, among others. 5.1.4 Sustainable dairy – animal welfare in dairy production

The requirements that apply to all suppliers are supplemented by a risk management process for human rights risks in the upstream supply chain. This consists of three sub-steps:

    1. "supply chain mapping": illustration of the immediate upstream suppliers
    1. risk assessment using suitable criteria and available indicators (currently: "Children's Rights and Business Atlas" as an indicator of human rights violations in general)
    1. targeted research for suppliers from countries of origin with an increased risk

The Expert Committee, consisting of representatives from Procurement, Quality, Sustainability and Legal Services, decides on the exact procedure to follow in the event of well-founded suspicions of human rights violations.

Exclusion of child labour

In the reporting year, Emmi audited key suppliers with regard to their risk classification in accordance with the "Children's Rights and Business Atlas". It was not possible to substantiate the suspicion of human rights violations in general or the suspicion of child labour in particular. Details can be found in the report in Appendix 7.1.

Objectives

  • all new suppliers sign the Emmi Supplier Code of Conduct
  • by 2026: all active suppliers managed by Strategic Procurement will have accepted the Emmi Supplier Code of Conduct
  • all suppliers from critical countries of origin are checked once a year with regard to compliance with the Emmi Supplier Code of Conduct

Emmi currently lacks the option of a uniform systemic segmentation of its suppliers that would guarantee uniform application of the Emmi Supplier Code of Conduct. The company is working on making this possible in the future.

Measures

Management system introduced to respect human rights

In the reporting year, Emmi introduced a management system for human rights risks.

Review of human rights aspects in coffee production

A coffee supplier to Emmi is suspected of being involved in human rights violations in a sourcing country. As a result, Emmi carried out an in-depth investigation of the situation during the year under review, even though Emmi does not source any coffee from the affected region and the relevant legal proceedings have not yet been concluded.

Emmi sought talks with the affected supplier, requested further information concerning the facts of the case and added more detailed rules to the . It transpired that the supplier has its own internal procurement code. The supplier's code fulfils the relevant requirements laid down by the Emmi Supplier Code. The parties accordingly concluded an equivalence agreement. Emmi will monitor the ongoing legal proceedings and will also continue to carefully monitor the supplier's conduct with regard to measures relating to sustainable procurement. Emmi Supplier Code

Emmi measures progress by means of the following performance figures:

Reporting critical concerns

In 2023, a total of 54 whistleblower reports were received on various topics. All reports were assessed by the ethics committee and important cases were thereafter processed by a case management team. If local processing was not possible, the division or the Group was involved. Appropriate action was taken where required.

Emmi Supplier Code of Conduct

See section 5.1.5 Responsible sourcing – environmental aspects in the sourcing of non-dairy raw materials.

5.5 Combatting corruption

Combating corruption is part of the key issue of Governance for Emmi.

Emmi operates globally – including in countries with significant corruption risks. Emmi counters the risks associated with corruption – such as legal disputes or damage to its reputation – with clear rules and controls.

Concept

At Emmi, the provides the framework for combatting corruption. It encourages employees to report misconduct with regard to compliance with laws, guidelines and values. The points of contact are managers or the HR departments. Reports of suspected violations of the law can be submitted via the Whistleblowers Line. The Code of Conduct also addresses the fact that sourcing decisions must be made exclusively on the basis of performance references. This is also set out in the terms of employment, which employees receive on taking up their position and which must be confirmed in writing. Corruption is governed by an anti-corruption directive. Employee Code of Conduct

The Emmi Supplier Code of Conduct expects suppliers to conduct their business without bribery, corruption, money laundering or any form of fraudulent behaviour.

The core of the fight against corruption is the internal control system. This provides for specific controls in relevant business processes. In addition to the internal control system, financial reporting and controlling at local and Group level are ways of combatting corruption. This is where deviations can be identified and tracked. The underlying basis consists of the correctness of the financial reporting, which is regularly confirmed by licensed auditing firms at local and Group level.

Other key functions for combatting and monitoring corruption include risk management, the legal department and quality management.

Risks

Emmi's significant business activities are largely concentrated in countries with – according to Transparency International's Corruption Perceptions Index – low levels of corruption: Switzerland the Netherlands (8), Germany (9), the United Kingdom (18), France (21), Austria (22), the United States (24), Chile (27), Spain (35) and Italy (41). There are higher corruption risks in Brazil, Mexico and Tunisia, where Emmi has subsidiaries. (rank 7),

A general risk assessment is carried out for all Group companies on an annual basis, taking into account the ranking of all companies in the corruption index.

Irrespective of the country, the sourcing process, the sales process, human resources and the procurement and disposal of property, plant and equipment are considered business processes susceptible to corruption.

Objectives

Emmi has a zero-tolerance policy towards bribery, including kickbacks. The granting or acceptance of unjustified benefits is strictly prohibited.

Measures

Focus on business processes at risk of corruption

Emmi focuses its anti-corruption measures on business processes at risk of corruption:

Specific checks are carried out in the sourcing process, including in the following divisions: supplier selection, master data recording and maintenance, the ordering process, goods receipt, incoming invoice monitoring and supplier payment.

Specific checks are carried out in the sales process, including in the following divisions: customer acquisition, master data recording and maintenance, the ordering process, outgoing goods checks, outgoing invoicing, credit management and credit notes.

Specific checks are carried out in Human Resources, including in the following divisions: entry and exit process, master data recording and maintenance, wage and salary payment process and expenses.

Specific checks are carried out in the area of property, plant and equipment, including in the procurement and disposal processes.

Effectiveness test

Emmi has its internal control system checked at regular intervals by Internal Audit to ensure that it is effective. Individual matters are reviewed by the internal and external auditors. Any compliance findings from Internal Audit are reported to management.

Emmi measures progress by means of the following performance figures:

In 2023, a total of 13 internal audits were carried out by Internal Audit (the previous year's figure was 10). It is important to note that these figures relate exclusively to audits planned by Group companies, corporate functions and centralised functions such as for example processes at Emmi Schweiz AG (for instance procurement). Ad hoc mandates are not included in this figure since, due to their variable nature, they may differ significantly and, in some cases, may not have any link to corruption investigations.

6. Statement by the Board of Directors

The Board of Directors of approved the report on non-financial matters for 2023 at its meeting on 2024. The report is subject to approval by the General Meeting of Shareholders. Emmi AG 28 February

Lucerne, 28 February 2024

Urs Riedener

Chairman of the Board of Directors

Ricarda Demarmels

CEO

7. Appendix

7.1 Report on child labour due diligence

Assessment of legitimate reasons for suspicion of child labour

Emmi does not fall under the exceptions of of the Ordinance on Due Diligence and Transparency with respect to Minerals and Metals from Conflict Areas and Child Labour. Emmi assessed the risk of child labour and came to the following conclusions: Art. 6 and 7 or 9

Risks within the Emmi Group

On the basis of the internal audits in the production plants, there are no justified indications of the use of child labour.

Risks within the upstream supply chain

According to section of the report on non-financial matters, risks to child labour in particular must be monitored in a targeted manner and any suspected cases must be investigated. 5.4 Respect for human rights

Child labour due diligence measures

In 2023, Emmi reviewed the suppliers of its subsidiaries. The review included key suppliers with regard to their risk classification in accordance with the " ". Eleven suppliers with an obvious risk of child labour were identified (China, Pakistan, United Arab Emirates, Vietnam, Mali). Children's Rights and Business Atlas

These suppliers were subjected to in-depth research. The suspicion of human rights violations in general and child labour in particular could not be substantiated in the case of the identified suppliers.

7.2 Report on the handling of minerals and metals from conflict areas

Assessment of legitimate reasons for suspicion of minerals and metals from conflict areas

Emmi does not import or process minerals or metals from conflict areas. Emmi is therefore exempted from its duty of care and reporting obligations with regard to conflict minerals and metals.

Editing

Emmi Corporate Communications, Lucerne

Concept, design, usability and realisation Farner Consulting AG, Zurich

Technical realisation NeidhartSchön AG, Zurich

Translation

Apostroph Group, Lucerne

The Annual Report is published in German and in English. The German version is binding.

The Annual Report or any part thereof does not constitute an invitation to invest in Emmi shares. Any forward-looking statements contained reflect current views and estimates. The forwardlooking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements.

Potential risks and uncertainties include such factors as general economic conditions, foreign exchange and commodity price fluctuations, competitive product and pricing pressures, regulatory developments and IT failure risks.

Emmi is providing the information in this report as of the dates specified and does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise.

© Emmi, Lucerne, February 2024

Emmi AG Landenbergstrasse 1 CH-6005 Lucerne Phone +41 58 227 27 27 [email protected] www.emmi.com

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