HOCHDORF Holding Ltd.

Latest Results (07.08.2024):

Financial Report

The 2023 business year has seen further significant operational progress with positive EBITDA and positive cash flow. The Board of Directors and management of the HOCHDORF Group see the positive operational development of the last two years as confirmation that HOCHDORF has a sustainable business model.

Net Sales

The HOCHDORF Group generated net sales of CHF307.8 million in 2023 (previous year: CHF292.1 million; + 5.4%). The Food Solutions segment contributed around 66.5% (CHF204.7 million) to net sales in the reporting year, meaning minus 3.7% compared to the result of the previous year (CHF212.6 million). The Infant Nutrition segment – formerly “Baby Care” - contributed around 33.5% (CHF103.1 million) to sales in the 2023 financial year. In line with the strategy, this segment increased significantly compared to the previous year (plus CHF23.6 million; + 29.7%), thus confirming expectations. HOCHDORF and its partners have registered more than 100 new articles for existing and new markets for further growth in the Infant Nutrition segment.

Gross Operating Profit

Gross operating profit developed favourably in 2023 and the HOCHDORF Group achieved a gross profit of CHF93.0 million, which corresponds to an increase of CHF17.6 million compared to the previous year. The gross operating margin (gross operating profit as a percentage of production revenue) rose from 25.3% in the previous year to 30.8% in the 2023 business year. The HOCHDORF Group benefited from sales from the high-margin Infant Nutrition segment, renegotiated milk prices and good cream sales. Thanks to a consistent focus on earnings quality and growth, the gross margin in the Infant Nutrition segment increased from 41.0% in the previous year to 45.0%. The cost of materials and goods was 6.3% lower in 2023 than in the previous year 2022 (CHF208.9 million vs. 223.0 million). This decline is mainly due to a volume effect, as the price level generally increased. Great emphasis was put on optimised warehousing.

Costs of Milk

The Swiss milk price remains high compared to the international markets. In contrast to the easing of price levels in the EU, the Swiss dairy industry is confronted with an upward trend in domestic milk prices. Although the WTO-compliant Swiss export price compensation regime for processed milk in exported goods ensures a level playing field for Swiss agricultural raw materials on the international market. Nevertheless, the system has a delayed effect on falling EU prices. The corresponding gap had a negative effect for HOCHDORF in 2023 and is subject to adjustment initiatives in the industry.

Personnel and Other Operating Expenses

At CHF38.1 million, personnel expenses are CHF0.8 million (1.9%) lower than in 2022. Other operating expenses increased by CHF0.5 million to CHF47.1 million (previous year: CHF46.6 million) due to higher occupancy and maintenance costs and other external expenses. As a percentage of production revenue, operating expenses (personnel expenses plus other operating expenses) fell by 0.4 percentage points from 28.6% (2022) to 28.2% (2023). The situation on the energy and logistics markets eased. However, these prices were still above the pre-corona level. The stabilisation of these prices gave us planning security and had a positive impact on deliveries and operating performance.