Hero grows 1.9% in difficult year
- Net sales increase to CHF 1.14b driven by second half momentum
- Profitability hit by extraordinary one-time effects in US, acquisition accounting
- Group’s first Sustainability Report also published today
Lenzburg, March 25, 2022 – The Hero Group, which has a mission to delight consumers by conserving the goodness of nature, achieved an organic growth of 1.9% in 2021 despite facing strong headwinds in the first half of the year. Net Sales increased nominally by 2.2% to CHF 1.14 billion, but EBIT and Net Income were negatively impacted by extraordinary effects.
Net Sales growth was driven particularly by our core categories Baby & Toddler Food, Healthy Snacks, and Natural Spreads, which delivered an organic growth of 3.4% in 2021. Including the acquisition of Baby Gourmet, the leading organic baby organic baby food brand in Canada, the nominal growth in these categories increased to 6% versus prior year.
“Beyond sales growth, we achieved market share gains in the majority of our core category markets,” commented Rob Versloot, CEO Hero Group. “This gives us confidence that the strategic direction taken by the company, namely to focus on core categories, is paying off.”
According to the Annual Report, published today, EBIT landed at CHF 34.1 million, compared with CHF 59.8 million the previous year.
“The decline in EBIT vs prior year can be explained by two extraordinary effects.” said Karsten Boyens, Chief Financial Officer Hero Group. “First, the entire baby food industry in the US faced allegations regarding naturally-occurring heavy metals in baby food. This led to legal costs as well as adverse media coverage impacting the business negatively. Second, in light of the very strong performance of our baby and toddler food partnership in Germany, Hero had to adjust its liabilities related to the acquisition.”
Dr Boyens added that Hero managed to mitigate additional headwinds in 2021, including the continued impact from the Covid pandemic and inflationary trends in raw materials, with cost adjustments and pricing efforts.
Net Debt increased to CHF 163.4 million, up from CHF 126.4 million in 2020, mainly as the result of the acquisition of Baby Gourmet and strategic investments in IT and Supply Chain.
Europe remained the biggest sales region for Hero with 72% of total sales, followed by North America and Emerging Markets, both on 14%. Baby & Toddler Food remained the largest category with 39% of sales, followed by Natural Spreads on 22% and Healthy Snacks on 11%.
Rob Versloot, Hero Group CEO, said 2021 was also characterized by the ongoing transformation of the Group to a more focused, digital, and sustainable company.
“Looking into 2022, we see increasing inflationary trends and geopolitical uncertainty. Despite these challenges, we are cautiously optimistic that we can accelerate net sales growth and grow EBIT as well as Net Income,” Versloot said.
Alongside the Annual Report, Hero is also publishing its first ever GRI Sustainability Report that lays out the Group’s commitment towards becoming a climate positive company.
About Hero Group
The Hero Group is an international food company focused on branded nutritional food products. The company was founded in 1886 in Lenzburg, Switzerland, where its headquarters are still located today. Hero's main product categories of Baby & Toddler Food and Milks, Natural Spreads, and Healthy Snacks, are complemented by its activities in Gluten Free and Specialties. The Group, which lives by its mission to delight consumers by conserving the goodness of nature, boasts a global footprint and its portfolio consists of many well-known international and local brands. In 2021, the Group generated revenues of CHF 1.14 billion.
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