A successful turnaround and increasing internationalisation

13.04.2011 13:01

HOCHDORF Group press release for the 2010 annual statement of accounts

Hochdorf, 13 April 2011 – The HOCHDORF Group has made a good showing in business year 2010 – a year that was challenging both politically and economically. It is now turning a profit again following a year of negative company results (CHF +4.1 million net profit; previous year CHF -5.1 million). Operational results have also improved. The group increased its EBIT by 20 per cent to CHF 4.1 million (previous year CHF 3.4 million; +19.8%). To further increase the internationalisation process, the board of directors is requesting that the annual general meeting approves conditional share capital amounting to a maximum of CHF 4.5 million for a conversion loan. The planned capital market transaction will be synchronised with the change from the BXBerne Exchange to the SIX Swiss Exchange (Segment Domestic Standard).

The HOCHDORF Group achieved a gross turnover of CHF 351.4 million (previous year CHF 346.3 million; +1.5%) and processed a total of 410.5 million kg of milk and whey (previous year 320.4 million kg; +28.1%). In Switzerland, the processed milk quantity increased by just +1.7% from 320.4 to 325.9 million kg. In addition to this milk quantity, HOCHDORF also dried 13 million kg of whey. Approximately 71.6 million kg of milk was processed by the plant taken over by the HOCHDORF Group in Lithuania. HOCHDORF also achieved record results in terms of sales volume, selling 94,657 tonnes of products in total. The group was able to show substantial increases in the EBITDA (CHF 16 million; previous year CHF 13.9 million) and the EBIT (CHF 4.1 million; previous year CHF 3.4 million) in both absolute and relative terms (in % of the production revenue).

A satisfactory overall result
Compared to company losses of CHF 5.1 million in the previous year, the HOCHDORF Group turned a profit in the 2010 business year amounting to CHF 4.1 million. “These figures prove that we are on the right track,” says a delighted Damian Henzi, CEO of the HOCHDORF Group. This level of revenue was achieved despite extraordinary costs, such as, for instance, currency influences, a reduction in the funds previously available from the “Schoggi" law and running in costs for the new spray tower line, as well as additional amortisation, amounting to CHF 5.3 million in total.

Good results – a team effort
The entire HOCHDORF Group had a hand in the positive business results. As of 1 January 2010, HOCHDORF Swiss Milk AG took on a 30% holding in the milk plant UAB MGL Baltija in Medeikiai (Lithuania). Since there will be a 100 per cent takeover of the plant by 1 January 2014, it has already been completely incorporated into the accounts. As of 1 January 2011, HOCHDORF Swiss Milk AG increased its share to 45%.

The baby foods business area showed very positive development. HOCHDORF Nutricare AG achieved a 70 per cent growth in turnover and is already selling HOCHDORF baby foods in over 20 countries. HOCHDORF Nutrifood AG has developed an innovative baby food for a Swiss customer with milk fat, as well as rapeseed oil, sunflower oil and linseed oil. This product is to be seen as a response to increasing consumer resistance to the frequently-used palm oil. HOCHDORF Nutribake AG achieved its growth primarily in the bakery products industry and less in bakery sales. Nonetheless it still managed a slight increase in market share in the continually shrinking bakery sales area.

Forecast for 2011
“In the current business year, we are investing heavily in increased and more regular capacity utilisation at our existing plants in Hochdorf, Sulgen and Medeikiai,” explains Damian Henzi. “We will also continue to pursue the optimisation and restructuring measures introduced two years ago,” he adds. It is in this context that the baby foods business will be incorporated into HOCHDORF Nutricare AG as of 1 July 2011. HOCHDORF Nutricare AG and HOCHDORF Nutrifood AG are currently selling and developing baby foods. Henzi also says that the group will continue with its internationalisation process in the current business year. He is convinced that many markets could be conquered with “Made in Switzerland” quality products and the HOCHDORF high level of service.

A request will be made to the annual general meeting on Friday 13 May 2011 to retain 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.

Capital increase via conversion loan to be requested
The board of directors is also requesting the creation of conditional share capital amounting to a maximum of CHF 4.5 million at the annual general meeting. “The board of directors is convinced that HOCHDORF Holding AG will have to show greater flexibility in fundraising in the coming years,” says Hans-Rudolf Schurter, Chairman of the Board of Directors, explaining the decision to create conditional share capital for a conversion loan. This capital is intended to encourage further internationalisation and facilitate loan repayments. “HOCHDORF Holding Ltd. has interesting and concrete joint venture enquiries from Asian and Sout American partners”, adds Schurter. The planned capital market transaction will be synchronised with the change from the BXBerne Exchange to the SIX Swiss Exchange (Segment Domestic Standard).

 

HOCHDORF Group key figures 2010

CHF (thousands)20102009Change

Gross sales revenue

351'447

346'276

+1.5%

EBIDTA16'00113'853+15.5
          as % of production revenue4.7%4.4%
EBIT4'0963'419+19.8%
          as % of production revenue1.2%1.1%
Net profit4'137-5'069n.a.
          as % of production revenue1.2%n.a.
Investments in fixed assets18'80344'664-57.9%
         as % of production revenue5.5%13.6%
Staffing levels at 31.12.377349+8.0%
Gross turnover per employee
932992-6.0%
Processed milk, cream and whey amounts
in kg (millions)
410.5320.4+28.1%
Quantities produced (including cream) in tonnes90'15976'434+18.0%
Quantities sold (tonnes)
94'65782'589+14.6%
31.12.201031.12.2009

Balance sheet total254'537240'565+5.8%

          of which equity capital

129'855130'827

          as a % of the balance sheet total

51.0

54.4

 

Contact:
Dr. Christoph Hug, Corporate Communications, HOCHDORF group, Tel: +41 (0)41 914 65 62 / +41 (0)79 859 19 23, christoph.hug@hochdorf.com

The HOCHDORF Group, with headquarters in the town of Hochdorf in the canton of Lucerne, is one of Switzerland’s leading companies in the food sector and in 2010 generated consolidated gross sales of CHF 351.5 million (CHF 346.3 million in 2009) with a workforce of 377 (status as at: 31.12.2010) at three sites (Hochdorf/LU; Sulgen/TG; Medeikiai/ Lithuania). HOCHDORF develops, produces and markets functional ingredients as well as dairy and cereal-based speciality products for the food industry and the trade worldwide. HOCHDORF’s products, which are extracted from natural raw materials such as milk, or wheat germs, have been making a contribution towards the health and well-being of infants right up to senior citizens since 1895. The products are sold in approx. 80 countries.