HOCHDORF Holding AG — Earnings Release 2011

Apr 11, 2012

News Details

Ad-hoc | 11 April 2012 07:15

HOCHDORF Holding AG: Ambivalent financial results for 2011

HOCHDORF Holding AG / Key word(s): Final Results

11.04.2012 07:15

Release of an ad hoc announcement pursuant to Art. 53 KR

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(R) 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

CHF (thousands) 2011 2010 Change
Gross sales revenues 346,574 351,447 -1.4%
Profits before interest, tax, depreciation and
amortisation (EBIDTA) 14,538 16,001 -9.2%
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
Net profit 12,381 4,137 +199.2%
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 amounts
in kg (millions) 455.4 410.5 +10.9%
Quantities produced (including cream) in tonnes 92,394 90,159 +2.5%
Quantities sold tonnes 91,766 94,657 -3.1%

                                            31.12.11   31.12.10

Balance sheet total 282,487 254,537 +11.0%
of which equity capital 137,338 129,855
as a % of the balance sheet total 48.6 51.0

Share details 2011 2010
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) 68.1 91.7 -25.7%
Price/earnings ratio 5.5 22.2

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Information and Explaination of the Issuer to this News:

The HOCHDORF Group, headquartered in Hochdorf, achieved a gross sales
revenue in 2011 of CHF 346.6 million. It is one of Switzerland's leading
companies in the food sector, employing more than 361 staff - including 338
full-time staff - as at 31.12.2011. 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. Our customers
include the food industry and retail industry and our products are sold in
80 countries. The shares are traded on the SIX Swiss Exchange (ISIN
CH0024666528).

Christoph Hug, Corporate Communications, HOCHDORF Group
Tel: 041 914 65 62 / 079 859 19 23, christoph.hug@hochdorf.com

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Language: English
Company: HOCHDORF Holding AG
Siedereistrasse 9
6281 Hochdorf
Switzerland
Phone: +41 41 914 65 65
Fax: +41 41 914 66 66
E-mail: hochdorf@hochdorf.com
Internet: www.hochdorf.com
ISIN: CH0024666528
Swiss Security Number:
Listed: SIX

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