EQS-Adhoc: HOCHDORF Holding Ltd: HOCHDORF generates solid results

EQS Group-Ad-hoc: HOCHDORF Holding AG / Key word(s): Final Results
HOCHDORF Holding Ltd: HOCHDORF generates solid results

07.04.2016 / 07:00
Release of an ad hoc announcement pursuant to Art. 53 KR.
The issuer is solely responsible for the content of this announcement.

HOCHDORF Group Press Release: 2015 Annual Results

HOCHDORF generates solid results

Hochdorf, 7 April 2016-The HOCHDORF Group significantly increased its turnover
in the 2015 business year. At CHF 551.2 million, the Group for the first time
posted gross sales turnover of more than a half a billion Swiss francs. Despite
all adverse circumstances, HOCHDORF posted results at the level of the previous
year. The Board of Directors will propose to the Annual General Meeting that an
unchanged dividend be distributed from paid-in capital reserves to the amount of
CHF 3.70 per registered share.

In the 2015 business year, the HOCHDORF Group sold 242,821 tons of products
(+144.9% compared with the previous year) and generated gross sales revenue of
CHF 551.2 million (previous year: CHF 428.7 million; +28.6%). The Group
processed 761,240 tons of milk, cream, whey, and milk permeate (previous year:
506,963 tons; +50.2%). Sales and turnover growth was due to the acquisition of
Uckermärker Milch GmbH and Marbacher Ölmühle GmbH. Without these acquisitions,
the Group would have posted a decline in turnover. Primarily responsible for
this were lower milk prices, which also resulted in lower sales prices in the
Dairy Ingredients business area. Having a negative impact on Group turnover were
also the abolishment of the minimum CHF-EUR exchange rate and the deliberately
reduced sales volume at the milk plant in Prenzlau.

New EBITDA record - EBIT at the level of the previous year
Due to lower-margin business in Germany, gross profit fell to 23.9% (previous
year: 24.7%). However, the nominal value rose to CHF 130.1 million (previous
year: CHF 105.2 million). In terms of operating expenses, the Group posted
higher figures than in the previous year both in personnel expenses and in other
operating expenses as a result of the inclusion of the acquired plants.

EBITDA came in at CHF 30.5 million, a new record for the HOCHDORF Group
(previous year: CHF 27.2 million; +12.0%). Despite considerably higher
amortisations, EBIT was able to be slightly increased to CHF 20.1 million
(previous year: CHF 20.0 million; +0.65%). This result shows that the measures
undertaken to boost efficiency are having an effect. But it is also clear that,
as announced, the acquired companies are not yet contributing to increased
income. Net income stood at CHF 13.0 million (previous year: CHF 16.1 million),
with the decline attributable solely to currency effects.

Effective new organisational structure
HOCHDORF Swiss Nutrition AG started out the 2015 business year with a new
organisational structure. The results were generated in a relatively difficult
economic environment, which shows that the restructuring paid off. In addition,
the market focus on the three business areas proved successful for the HOCHDORF
Group as a whole in the reporting year.

The integration of Uckermärker Milch GmbH and Marbacher Ölmühle GmbH began in
early 2015. In Prenzlau, the Group was able to respond relatively well to the
currently challenging situation on the international milk market. It benefited
from the fact that only a small quantity of milk is procured directly from dairy
producers. For this reason, the production of milk powder was able to be scaled
back somewhat due to poor product prices.

Cash flow and financing
Compared with the previous year, cash flow from operating activities fell from
CHF 20.5 million to CHF 18.1 million. In addition, earned income declined from
CHF 25.3 million to CHF 23.4 million. The main reason for this was the exchange
rate losses suffered due to the appreciation of the Swiss franc. In 2015
HOCHDORF made investments totalling CHF 24.5 million. As anticipated, free cash
flow in 2015 was negative. On account of the planned investments, the company
expects that cash flow will also be negative in 2016 and 2017.

As at 31 December 2015, net borrowing stood at CHF 21.3 million (previous year:
CHF 46.8 million). The reduction was attributable to the premature conversion of
convertible bonds. Expensive, long-term debt positions at the German companies
were refinanced via the Group, which enabled interest charges to be reduced
considerably. The equity ratio amounted to 56.6% at the end of 2015 (previous
year: 43.2%). Therefore, as at 31 December 2015, the HOCHDORF Group's financing
forms a solid basis for the continued growth of the company.

Dr Thomas Eisenring on the 2015 business year: "In light of the basic conditions
that confronted us in the 2015 business year and the current business model of
the HOCHDORF Group, I am satisfied with the results we generated."

Dairy Ingredients business area
In 2015 the Dairy Ingredients business area generated gross sales revenue of CHF
415.4 million (previous year: CHF 298.6 million; +39.1%), which came from Swiss
business (CHF 227.6 million; -11.8%), HOCHDORF Baltic Milk UAB (CHF 25.2
million; -42.1%), and Uckermärker Milch GmbH (CHF 162.7 million). The reasons
for the lower turnover were the appreciation of the Swiss franc and lower milk
prices, which had to be passed on to customers. The significantly lower turnover
of HOCHDORF Baltic Milk UAB was moreover influenced by the elimination of pure
milk-exchange business.

As expected, the quantity of liquids purchased and processed by HOCHDORF Swiss
Nutrition AG, Dairy Ingredients business area, fell by 5.4% to 388.9 million kg
(previous year: 410.9 million kg). Overall, however, a slightly greater quantity
of our own milk was processed at the Hochdorf and Sulgen plants (314.1 million
kg; previous year: 312.9 million kg). Due to lower milk quantities in the
spring, the Group dried considerably less milk in Switzerland in connection with
commissioned orders. The quantity of processed milk rose by +10.3% to 55.0
million kg.

It is important for the Dairy Ingredients business area that plant utilisation
is as regular as possible during the year. In 2015 this was able to be achieved
in Switzerland in part with a somewhat larger quantity of whey. In addition, in
September the Directorate General of Customs approved the importing of 780 tons
of skimmed milk concentrate for export projects (inward processing). This
decision helped to achieve better plant utilisation in times of low milk
production. Because Swiss milk quantities rose considerably in December,
HOCHDORF elected not to import partial quantities.

In Lithuania, HOCHDORF sold 17,736 tons of products. This figure is nearly 8%
above the previous year's figure (not including the quantities for pure
milk-exchange business). The quantity was able to be increased, inter alia, due
to the optimisation measures carried out in 2014.

Overall, the plant in Prenzlau processed 296.7 million kg of liquids (milk,
cream, buttermilk, and milk permeate) and sold 135,407 tons of products. In
addition to butter, quark, and milk powder, the Prenzlau site has also been
manufacturing buttermilk since December 2015.

Baby Care business area
In the 2015 business year, the Baby Care area generated gross sales revenue of
CHF 110.4 million, which was comparable to the previous year (CHF 110.0
million). In view of the strong Swiss franc and foreign turnover of more than
90%, this was a solid result. Quality and product safety are top priority in the
manufacture of infant formula. This was borne in mind in connection with the
projects to maximise capacity. Compared with the first half of the year, the
capacity of the production facilities was able to be increased in the second
half of the year. The quantity sold correspondingly rose by 7% to 16,763 tons
(previous year: 15,651 tons). The higher production quantity and the regrouping
of the customer portfolio made it possible for the fastest growing partners to
achieve strong growth despite capacity bottlenecks.

Cereals & Ingredients business area
In 2015 the Cereals & Ingredients business area generated gross sales revenue of
CHF 24.9 million (previous year: 17.9 million; +38.8%), which came from Swiss
business (CHF 18.0 million; previous year: 17.9 million) and Marbacher Ölmühle
GmbH (Germany) (CHF 6.8 million).

At CHF 18.0 million, the Cereals & Ingredients business area of HOCHDORF Swiss
Nutrition AG generated gross sales revenue at the level of the previous year.
The quantity of products sold fell slightly to 3,681 tons (previous year: 3,733
tons; -1.4%). The streamlining of the product range carried out in the 2014
business year, as well as the developed sales and distribution structures,
proved effective.

The integration of Marbacher Ölmühle into the HOCHDORF Group went well. On the
sales side, numerous synergies were able to be exploited. HOCHDORF is not
entirely satisfied with the generated turnover of CHF 6.8 million.

In 2015 HOCHDORF South Africa Ltd arranged for the necessary production
equipment, raw materials, personnel, and market entry. No products were sold.

New strategy set for 2016-2020
The aim of the HOCHDORF Group is to transform itself by 2020 into a globally
operating, profitable niche company with premium products. As a company
operating in niches, HOCHDORF intends to keep its nimbleness as a medium-sized
company and conquer new markets with the requisite amount of courage.

Forward integration, i.e. moving closer to end consumers, is an important
element of the new strategy. For the moment, this effort will be made in the
Baby Care business area. In the process, affiliating with the customer
constitutes the ideal scenario. Moreover, the company's own brands are to be

The development and marketing of new products with strong added value
constitutes a second important pillar in achieving the objective. The new
products are aligned with customer benefit and are intended to offer a high
added value.

With its products, HOCHDORF positions itself in all markets as a specialist. The
company's close relationship with its partners and a high degree of flexibility
allow it to differentiate itself from other market participants with integrated
product and marketing concepts. In order to achieve the defined objectives, all
business areas will develop corresponding premium products and establish
themselves with them in the target markets.

In HOCHDORF's production plants, correspondingly high quality standards apply to
the premium aspiration. In so doing, the goal is to optimise the organisation of
production processes and quality assurance. The efficiency of existing processes
is regularly reviewed using key figures.

The HOCHDORF Group is aware that many natural resources and a great deal of
energy are required to manufacture its products. The company intends to handle
all resources in a sustainable, environmentally friendly manner. Among other
things, we pay attention, with regard to new investments, to a high degree of
energy efficiency in the plants.

Change on the Board of Directors
As announced in late January, Urs Renggli will step down from the Board of
Directors in advance of the upcoming Annual General Meeting. The experienced
financial expert has served on the Board of Directors of the HOCHDORF Group for
eight years. The Board of Directors thanks him for his work.

Dr Daniel Suter, an expert from the field of auditing and business consulting,
has made himself available to the Board of Directors. At the time of the
election, Dr Suter will still be a partner at the auditing firm
PricewaterhouseCoopers in Basel. However, he will be retiring from the firm on
30 June 2016. He served for 12 years on the expert commission and the expert
committee that develop recommendations for Swiss GAAP FER accounting, as well as
six years in the expert group for accounting issues at the SIX Swiss Exchange.
Since 2009, Dr Suter has lectured at the University of Zurich in the area of
internal auditing and tax auditing. He has authored or co-authored a number of
professional publications.

Outlook for 2016
The international markets are not yet showing any signs of recovery. "Due to the
continuing low market prices for milk products, we anticipate that our gross
sales revenue for the current business year will come in at CHF 560-600
million," said CEO Dr Thomas Eisenring. Owing to the current internal projects,
EBIT is expected to be 3.8-4.0% in comparison to production revenue. Eisenring
emphasised that possible forward integration is not contained in either of the

To be able to implement the strategy for forward integration, the Board of
Directors is requesting that the AGM approves a conditional capital increase for
a nominal CHF 7,173,800, i.e. 717,380 registered shares at a nominal value of
CHF 10.00. With regard to the envisaged forward integration we are currently
undertaking exploratory talks with various candidates with regard to a majority
shareholding or a takeover by the HOCHDORF Group. "This is about coming closer
to the end consumer in our greatly expanding target markets and further
extending the collaboration with our current customer base. To this end,
developing and marketing new high value-added premium products and expanding our
own brand presence are vital," said Josef Leu, Chairman of the Board of

In theDairy Ingredientsbusiness area, the aim is to regularly review costs in
light of continuing low raw materials prices and to push forward as rapidly as
possible with projects to manufacture products with higher margins.

TheBaby Carearea is planning turnover growth of approximately 5%. For this
reason, the focus will be on further improving the supply chain and on
increasing existing production capacity. At the same time, a search will be
undertaken in the market for potential new partners so that the planned new
production and filling capacities can be utilised as quickly as possible.

In 2016 theCereals & Ingredientsarea will be concentrating on further developing
VIOGERM(R) business and on launching the first kid's food products. In addition,
HOCHDORF is planning to expand production at the Marbach (Germany) site. In
South Africa, chocolate began to be manufactured for the African market in
February 2016. If the assumptions made in the business plan prove to be correct,
an investment can be made in 2016 in a larger production facility.

HOCHDORF Holding Ltd is pursuing a cautious dividend policy based on
sustainability. For this reason, the Board of Directors will propose to the
Annual General Meeting on Friday, 6 May 2016, that it approve an unchanged
dividend from paid-in capital reserves of CHF 3.70/share. Accordingly, this
achieves a dividend return of 2.19% as at the reporting date of 31 December

HOCHDORF Group key figures for 2015

CHF 1,000                                                             2015
2014       Change

Gross sales revenue                                                   551,208
428,689    +28.6%

Earnings before interest, tax, depreciation and amortisation (EBITDA) 30,455
27,197     +12.0%

as % of production revenue                                            5.6

Earnings before interest and taxes (EBIT)                             20,146
20,016     +0.7%

as % of production revenue                                            3.7

Net profit                                                            13,024
16,139     -19.3%

as % of production revenue                                            2.4

Staffing levels as at 31 December                                     625
573        +9.1%

Quantity of liquids processed (milk, cream, whey, etc.), in tons      761,240
506,963    +50.2%

Quantity produced (including cream), in tons                          241,754
99,720     +142.4%

Quantity sold, in tons                                                242,821
99,155     +144.9%



Balance sheet total                                                   340,396
331,109    +2.8%

thereof equity                                                        192,788
143,168    +34.7%

as % of the balance sheet total                                       56.6


Information concerning shares                                         2015

Profit per share (in CHF)                                             11.73
17.45      -32.8%

Dividend (in CHF)                                                     3.7*
3.7        --

Price at close of trading as at 31 December (in CHF)                  168.70
138.00     +22.2%

Market capitalisation (in CHF millions)                               242.0
147.8      +63.7

P/E (price/earnings) ratio as at 31 December                          14.4
7.9        +82.3

* Subject to approval at the Annual General Meeting on 6 May 2016.

The full annual report can be found athttp://report.hochdorf.com/en.

End of ad hoc announcement

Additional features:

Document title: HOCHDORF Group Press Release: 2015 Annual Results

07.04.2016 News transmitted by EQS Schweiz AG. www.eqs.com - news archive:

The issuer is responsible for the contents of the release.
Information and Explanation of the Issuer to this News:

In 2015 the HOCHDORF Group, which is headquartered in Hochdorf, generated a
consolidated gross sales revenue of CHF 551.2 million. It is one of the leading
foodstuff companies in Switzerland, with more than 625 employees as at 31
December 2015. Made from such natural ingredients as milk, wheat germ, and
oilseeds, HOCHDORF products have been contributing to the health and well-being
of the young and old alike since 1895. Our customers include the food industry
and wholesalers and retailers. Our products are sold in more than 90 countries.
HOCHDORF stock is traded on the SIX Swiss Exchange in Zurich (ISIN


Language: English

Company:  HOCHDORF Holding AG

          Siedereistrasse 9

          6281  Hochdorf


Phone:    +41 41 914 65 65

Fax:      +41 41 914 66 66


Internet: www.hochdorf.com

ISIN:     CH0024666528

Listed:   Foreign Exchange(s) SIX

End of News EQS Group News Service
451767  07.04.2016 

Weitere Meldungen: HOCHDORF Holding AG

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