Lactalis exceeded €30bn ($34.1bn) in revenues last year for the first time but the pace of growth slowed in an “unstable geopolitical and economic climate”.
That was the view of the world’s largest dairy company, which said net profit dropped 19% in 2024 to €359m due to an unquantified and unspecified tax settlement late in the year with the French authorities.
Early in 2024, the privately-owned company reportedly came under investigation by the Parquet National Financier (PNF), or the National Financial Prosecutor’s Office, for alleged tax fraud dating back to 2018.
The Le Monde local newspaper wrote last February that the PNF probe was launched in 2018 following ‘revelations’ made in the French press, including Mediacités, Ebdo, Les Jours and Mediapart.
Those reports suggested that Lactalis ‘had been using several financial subsidiaries in Belgium and Luxembourg to allegedly artificially siphon-off the group’s profits to reduce its taxable income in France’, according to Le Monde.
In a statement of its financial performance posted on LinkedIn yesterday (16 April), Lactalis said briefly: “The fall in net income reflects the agreement reached with the French tax authorities in late 2024.”
Nevertheless, revenue rose 2.8% to €30.3bn, but slowing from the 4.3% growth in 2023. Operating income increased 4.3%, although Lactalis did not provide an end figure, while net income dipped from €428m in the prior 12 months.
The Laval, Pays-de-la-Loire-headquartered business said in its 2023 report that profit “remained weak” that year, despite posting an 11% increase. The year was “marked by a change in consumer purchasing behaviour, reflected in a fall in sales volumes and a specific appetite for private labels”, Lactalis said at the time.
Lactalis’ commentary around its 2024 performance was light on detail, with the Président and Galbani cheese brand owner saying the company “maintained its growth trajectory in an unstable geopolitical and economic climate”.
However, the profit margin also dwindled, coming in at 1.2%, compared to 1.45% in 2023 and 1.36% in 2022.
Chairman Emmanuel Besnier added: “For over nine decades, Lactalis has perfected its expertise in manufacturing dairy products year after year and developed a model that brings it stability and performance.
“Today, we keep growing and creating value through our investments, as well as our ability to innovate, propose sustainable practices and support the development of partners around the world.”
Lactalis said it invested more than €1bn in its manufacturing facilities last year, including improvements at its Larceveau creamery for Ossau-Iraty cheese, and new production and packaging lines at facilities in Certosa (Italy), Tulare (US) and Bendigo (Australia).
