News

Hochdorf reports "year of transformation"

26 Mar 2020

2019 was a year of transformation for the Hochdorf Group, it says, caused in particular by acquisitions in recent years that did not develop as hoped.

The extension of the syndicated loan and the sale of the Pharmalys companies were two of the most important measures implemented to stabilise the company.

Hochdorf reports year of transformation

Hochdorf generated a net sales revenue of CHF 456.8 million in 2019 (-18.6% compared to the previous year). Due to additional capital allowances, value adjustments and provisions, EBIT was CHF -265.3 million, with a loss attributable to shareholders of CHF -239.2 million. Due to the highly negative result, the Board of Directors is proposing to shareholders that no dividend be paid.

In 2019, Hochdorf processed 677,845 tonnes of milk, whey, cream and buttermilk (previous year (PY): 661,017 tonnes; +2.5%). A lower quantity of liquid was processed at the Swiss plants and a higher quantity at Uckermärker Milch GmbH. In terms of infant formula in particular, plant utilisation did not meet expectations.

Hochdorf generated net revenues of CHF 456.8 million, -18.6% below the prior-year figure of CHF 561.0 million. As a result of the lower sales and the value adjustments made, gross profit fell significantly year-on-year from CHF 171.8 million to CHF 61.8 million.

Operating costs increased slightly compared to the previous year. This was due to the higher costs of Pharmalys Laboratories SA, particularly in the area of distribution costs, which are included until deconsolidation at the end of November 2019. Amortisations on tangible and intangible assets amounted to CHF 51.6 million (PY CHF 14.4 million). This is mainly due to impairments on fixed assets of CHF 28.5 million on shareholdings. The loss on shareholdings amounts to CHF 139.1 million, which resulted from the sale of the Pharmalys shareholdings and Hochdorf South Africa Ltd. In addition, debt provisions were set up and additional amortisations were made on the assets of subsidiaries and inventories. Value adjustments and provisions were also undertaken for loans to subsidiaries. The additional capital allowances, value adjustments and provisions resulted in an EBIT of CHF -265.3 million and a loss attributable to shareholders of CHF -239.2 million.

In Switzerland, Hochdorf Swiss Nutrition processed 391,409 tonnes of milk and whey (PY 408,857 tonnes; -4.3%). The decline can be explained by the lower milk yield as a result of the dry summer of 2018, the lower milk production in the second half of the year due to the uncertain financial situation as well as the poorer milk prices in competition with industrial cheese making as a result of the follow-on solution from the "Schoggi Law". Despite the challenging procurement and liquidity circumstances, Hochdorf Swiss Nutrition Ltd always managed to maintain supply and so defend its market share. The integration of parts of the Cereals & Ingredients division and the divestment of unprofitable business activities were largely completed by the end of the year.

Uckermärker Milch processed a significantly higher liquid volume than in the previous year (286,436 tonnes compared to 234,324 tonnes; +22.2%). The milk quantity increased significantly as a result of new contracts with several regional direct suppliers. As part of the restructuring of the Hochdorf Group, the shareholding in Uckermärker Milch was sold at the end of February 2020.

The Baby Care division achieved a net sales revenue of CHF 72.8 million in 2019 (PY 176.0 million; -58.6%). The decrease can be mainly explained by a significant fall in sales to some large customers and sluggish sales for the former subsidiary Pharmalys Laboratories. A collapse in sales, necessary value adjustments on outstanding receivables and the technical challenges that arose in the second half of the year in connection with the launch of the spray tower line 9 at the Sulgen plant all put pressure on operating results.

In 2020, the new Board of Directors will work together with Group Management to develop a future strategy for the Hochdorf Group. A key focus for the future will be ensuring sustainable business development in the Baby Care division in a highly competitive international environment. Sales and service structures have to be strengthened and market oriented to achieve the required growth and improve utilisation of the plants in Sulgen. It is vital to secure sustained growth with Pharmalys in 2020 and promote the internationalisation of the "Bimbosan" brand. Business development plays a central role in the future development of the Baby Care division, as the acquisition of new customers involves lengthy and complex approval processes.

The wholesale market will remain highly competitive for Dairy Ingredients in 2020. H the situation in milk procurement and the sales market to remain very challenging as a result of the solution that succeeded the "Schoggi Law". The customer and product portfolio established in recent years will be further developed. The best possible plant utilisation to secure the Hochdorf Group's economic success is particularly important in this regard.

The market situation remains very challenging; with the impact of the coronavirus epidemic difficult to assess at the current time, the Board of Directors and Group Management have agreed a sales and revenue range for the 2020 business year. The Hochdorf Group is expecting net sales revenue in the region of CHF 280 – 320 million and positive results at the EBITDA level.

Related news

Simplifying food labels with EUFIC’s interactive tool

Simplifying food labels with EUFIC’s interactive tool

16 Dec 2024

The European Food Information Council (EUFIC) hopes to turn consumer confusion into clarity with its new interactive online resource for healthier food and beverage choices.

Read more 
Consumer awareness and transparency key factors in shift to natural-based emulsifiers

Consumer awareness and transparency key factors in shift to natural-based emulsifiers

11 Dec 2024

The demand for natural-based emulsifiers in the food industry is surging as health concerns over the use of synthetic emulsifiers have consumers looking for alternatives.

Read more 
Protein-boosted ready-to-drink beverages expand beyond shakes

Protein-boosted ready-to-drink beverages expand beyond shakes

26 Nov 2024

Diets such as keto or Atkins may have paved the way to promote a higher protein intake. Now, the high-protein trend has gone mainstream, penetrating the ready-to-drink-beverage market.

Read more 
Dutch initiative to reduce supermarket waste claims ongoing success

Dutch initiative to reduce supermarket waste claims ongoing success

6 Nov 2024

Food waste in Dutch supermarkets continued to fall, registering a total reduction of 35% since monitoring was introduced by the Food Waste Free United Foundation and the Wageningen University & Research in 2018.

Read more 
Africa balances policy needs with food processing growth

Africa balances policy needs with food processing growth

1 Nov 2024

Opportunities ramp up in the continent’s food processing industry, yet a lack of policy progression threatens to stall progress.

Read more 
Ferrero updates Nutella brand with new plant-based version

Ferrero updates Nutella brand with new plant-based version

24 Oct 2024

Ferrero has launched a plant-based version of its Nutella brand, which adds chickpeas to its formulation in a move designed to appeal to growing numbers of vegan consumers.

Read more 
Danone removes NutriScore from products

Danone removes NutriScore from products

20 Sep 2024

Following an algorithm update that gives some of its sweetened drinks a worse score, Danone has removed the front-of-pack label, NutriScore, from all of its products – putting profit before public health, say campaigners.

Read more 
Chobani develops shelf-stable, prebiotic-enriched Super Milk

Chobani develops shelf-stable, prebiotic-enriched Super Milk

12 Sep 2024

Chobani has launched a prebiotic-enriched, shelf-stable, high-protein dairy milk to support people in disaster zones who need a nutritious drink that does not require refrigeration.

Read more 
Tesco trials methane mitigation supplement for dairy cattle

Tesco trials methane mitigation supplement for dairy cattle

5 Sep 2024

Tesco is trialing a methane-reducing feed supplement for one of its key UK dairy farms, sustainable UK milk producer Grosvenor Farms.

Read more 
Sheep and goat plague: A new threat to Greece’s feta production

Sheep and goat plague: A new threat to Greece’s feta production

27 Aug 2024

A recent goat and sheep plague outbreak threatens feta production in Greece. The flagship product accounts for roughly 10% of the country’s food exports, but Greek authorities say there is no cause for concern.

Read more