Pleasing balance sheet improvement and difficult milk year

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Ad hoc announcement pursuant to Art. 53 LR

Hochdorf, 14 March 2022The HOCHDORF Group took important steps towards financial recovery and strategic transformation in 2021. With the receipt of a repayment of CHF 30 million from Pharmalys and the proceeds of CHF 50.2 million from the sale of the Hochdorf site, net debt fell significantly to CHF 32.7 million. Despite the Covid pandemic, sales of CHF 303.5 million were generated, 1% below the previous year's figure. Operating activities resulted in a negative operating result due to higher milk prices and lower sales in the Baby Care division, while the reported EBIT of CHF 6.5 million benefited from special effects. The consolidated profit amounted to CHF 2.6 million, after a loss of CHF 70.3 million in the previous year. HOCHDORF intends to accelerate the implementation of its strategy, focusing on Smart Nutrition and the streamlining of its product portfolio, to move into higher value-added areas.

The 2021 business year was a testing one marked with challenges for the HOCHDORF Group. These included the strained balance sheet situation, market-related factors such as the high milk price or restrictions and cost increases on procurement markets, as well as the impact of the Covid-19 pandemic. The Board of Directors and Group Management have reacted to these developments with targeted measures, gradually strengthening the company and significantly improving HOCHDORF's financial profile in the reporting period.

Significant balance sheet relief
At the start of the business year, the HOCHDORF Group's balance sheet continued to be burdened by high debt of around CHF 100 million (excluding the hybrid bond) from the failed forward strategy from 2017 – 2019. This situation has taken a significant and sustainable turn for the better: the company structure introduced at the start of 2021 has led to greater efficiency coupled with costs savings made by the OPTIMA project. In the third quarter, the receipt of a CHF 30 million repayment from Pharmalys Laboratories SA significantly relieved the balance sheet, although it failed to create the required financial scope to develop the business. In order to further stabilise the balance sheet and to support the sustainable development of the company, the Board of Directors took the decision in the autumn of 2021 to concentrate production at the Sulgen location in the future and to sell the site in Hochdorf. This transaction was completed at the end of December 2021. The sale of the land and buildings to the Hochdorf municipality involved a one-time cash inflow of CHF 50.2 million. This repaid the bank debt and reduced borrowings to CHF 57 million.

Innovations launched for the future
In operational terms, the reporting year confirmed the need to transform the company in the coming years and to develop into a Swiss competence brand for technologically ambitious, functional speciality foods in line with the new strategy. HOCHDORF wants to focus even more on smart nutrition products in more value-intensive areas. A consequence of this development will be to reduce the cost dependency on the raw material of milk, which is experiencing increased pressure on volume in Switzerland. HOCHDORF is responding to this trend and in the last twelve months has brought several newly-developed finished products and semi-finished products to market in the area of smart nutrition. These include Bimbosan goat milk, the specialist Riso PH infant formula, lactose-free milk powder, a vegan whole milk powder alternative and whey protein concentrate for use in infant formula.

Adverse effects of Covid-19 on operational development
The Covid-19 pandemic and related restrictions have undermined project implementations for new and existing Baby Care customers. Projects were also postponed in the second half of the year due to the tense logistics situation on the global market, leading to supply delays and reduced sales. Consumer behaviour and the changes in demand for milk products during the pandemic led to significant price increases in milk as a raw material by CHF 0.05/kg on average. From the early summer there were cost increases for other important raw materials for infant formula production. Intense competition has meant that it has not been possible so far to pass these price increases onto the customer in full, which has had a negative impact on operating profits.

Bimbosan consolidates market position
This resulted in net sales in Baby Care of CHF 85 million, 15% below the previous year. Despite the challenges posed by Covid-19, we managed to acquire new partners in Asia for our high value-added Bimbosan and babina own brands. In Switzerland, Bimbosan consolidated and extended its position as market leader, introducing Bimbosan Premium goat milk to the specialist trade at the start of the year. Overall, HOCHDORF achieved net sales revenue of CHF 24.9 million with its own brands, 2.5% up on the same period last year. A long-term purchase guarantee was agreed with Pharmalys, HOCHDORF's largest customer, until 2026. At the same time, cash management and payment flows had to be optimised, especially to the supplied regions in the Middle East and North Africa.

Recovery in the chocolate industry
The Swiss chocolate industry recovered from its Covid-19 low in 2020. The volumes sold in the second half of 2021 reached and partially surpassed pre-pandemic levels. This is mainly due to warehouse restocking due to transport bottlenecks and the development of new sales markets. As a result, Food Solutions achieved sales of CHF 219 million, which represents an increase of 6% compared to the previous year. The positive sales for lactose-free milk powder are particularly noteworthy, as is the substantial interest from the chocolate industry in the vegan whole-milk powder alternative for "milk chocolate".

Operating result at EBIT level rises to CHF 6.5 million
Despite the sale of parts of the business in 2020, net sales revenue at Group level remained at the previous year's level of CHF 303.5 million (2020: CHF 306.2 million). Gross profit increased in absolute terms to CHF 111.2 million (2020: CHF 94.3 million). Adjusted for the book profit from the sale of the properties in Hochdorf and Welschenrohr, it was below the previous year's value at CHF 70.6 million. The operating result of CHF 24.7 million was significantly above the previous year (2020: CHF 13.9 million) and EBIT reached CHF 6.5 million, corresponding to a margin of 1.9%. This result was boosted by specific factors. On the one hand, the sale of the site in Hochdorf and Welschenrohr resulted in a profit of CHF 38.6 million, while the production relocation to Sulgen involved one-time provisions of around CHF 14 million. Adjusted for these effects, the operating EBIT was CHF –16.9 million, compared to CHF 2.3 million in the previous year. The consolidated profit was CHF 2.5 million, after a loss of CHF 70.3 million in the same period of the previous year.

Free cash flow of CHF 61.2 million
Due to the negative operating result, cash generated was CHF −3.9 million (previous year: CHF 11.1 million), while the free cash flow increased to CHF 61.2 million thanks to the property sales and the purchase price payment from Pharmalys. At the end of the period, the HOCHDORF Group had cash and cash equivalents of CHF 24.3 million. Net debt was reduced significantly from CHF 87.6 million in the previous year to CHF 32.7 million in 2021 and the equity ratio reached a solid 62.5% (2020: 55.8%).

Outlook for 2022
Ongoing delays and postponements of projects make it difficult to estimate precise order receipts. HOCHDORF is using this situation to streamline its range in order to improve profitability. By consistently implementing the strategy agreed in 2021 by Group Management and its new leadership, HOCHDORF is focusing on increasing margins and promoting innovation. The related streamlining of our range and evaluation of the traditional business areas is taking place in the first half year of 2022. This is not therefore the best time to forecast net sales and earnings. HOCHDORF will publish its forecast with the 2022 half-yearly financial statement.

Partnership with Emmi
Emmi and HOCHDORF agreed a cooperation in the area of speciality powders, for both milk-based and vegan products in March 2022. HOCHDORF will produce semi-finished and finished products with special requirements in powder form for Emmi. This operational cooperation is contractually structured as contract manufacturing.

Detailed report
The complete Annual Report is available at:


HOCHDORF Group key figures 2021





Net sales revenue



−0.9 %

Earnings before interest, tax, depreciation and amortisation (EBITDA)



78.2 %

          as % of production revenue




Earnings before interest and taxes (EBIT)




          as % of production revenue




Net profit




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Earned capital




Staffing levels at 31.12












Balance sheet total




          of which equity capital




          as a % of the balance sheet total








Share details




Earnings/loss per share (in CHF)




Dividend payout (in CHF)




Price at close of trading per 31.12. (in CHF)




Stock exchange capitalisation (in million CHF)




Price/earnings ratio (P/E) as at 31.12




* subject to approval at the Annual General Meeting of 13 April 2022.

Contact/ Location
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