HOCHDORF Group press release for the 2011 annual statement of accounts
Hochdorf, 11 April 2012 – The HOCHDORF Group achieved record profits of CHF 12.4 million in the 2011 financial year. However, this was combined with a rather unsatisfactory operational performance with an EBIT of CHF 1.9 million. The high profits can be explained by the sale of HOCHDORF Nutribake Ltd.; reasons for the rather low EBIT include currency turbulence, running-in costs for the new production line, warehouse depreciation and the sale of HOCHDORF Nutribake Ltd.
The HOCHDORF Group achieved a gross sales revenue of CHF 346.6 million for the 2011 financial year (previous year CHF 351.4 million; -1.4%) and processed a total of 455.4 million kg of milk and whey (previous year 410.5 million kg; +10.9%). Due to lower revenue reductions, the net sales revenue increased to CHF 343.6 million (previous year 341.2 million; +0.7%). The turnover figures were achieved despite the loss of turnover of over CHF 10.0 million from HOCHDORF Nutribake Ltd. The Group achieved record figures with regard to production volume. It made a total of 92,394 tonnes of products (+2.5%) in its plants. Company results also reached a record level of CHF 12.4 million due to the sale of HOCHDORF Nutribake Ltd. (as of 1 April 2011).
Currency situation and high costs
The Group achieved a solid EBITDA of CHF 14.5 million (previous year CHF 16.0 million) but a low EBIT of CHF 1.9 million (previous year CHF 4.1 million). The revenue figures are influenced by the currency situation and by costs amounting to approximately CHF 8 million for running-in the new spray tower line in Sulgen, consultancy (mainly for the issue of the conversion loan), warehouse depreciation due to currency turbulence and the cancellation of latent tax credits. Revenue figures were also influenced by significantly higher amortisation, which was necessary due to the high investment of the last three years. Additional revenue of approximately CHF 2 million was lost with the sale of HOCHDORF Nutribake Ltd. and the other business areas will cover this in the years to come.
The Milk Derivatives business area
The HOCHDORF Group is active in three business areas: Milk Derivatives, Baby Care, and Cereals & Ingredients. The nutrition group processed record quantities of milk and whey in the Milk Derivatives business area. HOCHDORF Swiss Milk Ltd. achieved a good organic growth of about 6% and managed gross sale revenues of CHF 238.3 million. The subsidiary in Lithuania, UAB MGL Baltija, benefited from the favourable international milk price and achieved a turnover of CHF 33.5 million.
The Baby Care business area
The Baby Care business area achieved significant growth in 2011 in terms of quantity and value. HOCHDORF Nutricare Ltd. currently supplies premium Swiss products to customers from 26 countries and has increased its turnover by a very impressive 54.7% to CHF 43.6 million. The significant growth for HOCHDORF Nutricare Ltd. is partly related to the merger of the HOCHDORF Group’s traditional infant formula business into Nutricare effective, from 1 July. At the same time the company was also incorporated into HOCHDORF Holding Ltd. This enables the group to concentrate existing development and sales expertise in one company.
The Cereals & Ingredients business area
HOCHDORF Nutrifood Ltd. maintained a fairly constant turnover in the Swiss market with its Cereals & Ingredients business. However, the unfavourable currency situation and the lasting crisis in the EU had a negative effect on many existing and potentially new export customers. HOCHDORF Nutrifood Ltd. provides high-quality cereal products that are relatively expensive in terms of price comparisons alone and these had to fight against competitors’ products and substitutes in difficult circumstances.
In addition to the familiar VIOGERM® wheat germ products, bakery products have also been part of HOCHDORF Nutrifood Ltd. product range since last year. These are mainly sold to BAKELS Nutribake Ltd. The ALIA Olive concept also led to the first presentation of a high-quality special oil product in powdered form at the FiE (ingredients trade fair) at the end of 2011 in Paris. There are plans to develop and market more special oil powders with high nutritional value in the current business year.
Forecast for 2012
“We want to significantly improve the group’s profitability in the current business year – a goal we were actively pursuing last year. We were successful in a number of areas within the Group and were able, for instance, to cut the costs per kilogram of product made by 20% over two years,” explains Damian Henzi, CEO of the HOCHDORF Group. However, currency adjustments meant the Group’s efforts were not sufficient to completely offset the strong Swiss franc for export and make it more competitive. Various measures are planned to achieve this objective, including an increase in asset utilisation and production batches. “One such measure will enable us to reduce the amount of cleaning and minimise the costs of quality assurance that are incurred for each batch,” says Henzi. Savings in purchasing and supply chain will also be implemented. At the same time, there are also plans to improve market performance and appeal. These will be improved on an ongoing basis for the international market in order to strengthen competitiveness.
The nutrition group projects a growth in turnover of between 4% and 8% for 2012. A continued growth in the Baby Care area with a projected increase of between 30% and 40% will play an important role – despite ongoing difficulties with the strong Swiss franc and the unstable economic situation. “We have a good reputation on the international market and our ‘Swiss-made’ products are being actively marketed by our partners in many countries. Because of this, we expect to meet our turnover targets,” says a confident Damian Henzi.
On account of the mixed results and the uncertain economic situation, we will propose that the AGM on Friday 11 May 2012 supports retaining the dividend of CHF 3.0 per share. The dividend payment is to be taken entirely from the capital investments, whereby there is no withholding tax deduction and the revenue is tax-free for individuals who are resident in Switzerland.
HOCHDORF Group key figures 2011
Gross sales revenues
|Profits before interest, tax, depreciation and amortisation (EBIDTA)||14,538||16,001||-19.2%|
|as % of production revenue||4.1%||4.7%|
|Profit before interest and tax (EBIT)||1,898||4,096||-53.7%|
|as % of production revenue||0.5%||1.2%|
|as % of production revenue||3.5%||1.2%|
|Staffing levels at 31.12.||361||377||-4.2%|
|Gross sales revenue per full-time employee||1,025||1,001||+2.4%|
Processed milk, cream and whey amountsin kg (millions)
|Quantities produced (including cream) in tonnes||92,394||90,159||+2.5%|
Quantities sold tonnes
|Balance sheet total||282,487||254,537||+11.0%|
of which equity capital
as a % of the balance sheet total
|Profits (in CHF)||13.76||4.60||+199.1%|
|Dividends (in CHF)||3.0||3.0||0.0%|
|Exchange rate at 31.12. (in CHF)||75.70||101.90||-25.7%|
Stock exchange capitalisation (in million CHF)
Dr. Christoph Hug, Head of Corporate Communications, HOCHDORF Group, Tel: +41 (0)41 914 65 62 / +41 (0)79 859 19 23, firstname.lastname@example.org
The HOCHDORF Group, based in Hochdorf, achieved a consolidated gross sales revenue of CHF 346.6 million in 2011. It is one of the leading foodstuff companies in Switzerland, employing 361 staff as of 31.12.11 (338 full-time staff). Made from natural ingredients such as milk and wheat germ, HOCHDORF products have been contributing to our health and wellbeing since 1895 – from babies to senior citizens. Its customers include the food industry and retail sector and its products are sold in 80 countries. The shares are traded on the SIX Swiss Exchange (ISIN CH0024666528).