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Hero Group operating profit up 8.5%

Published: Friday, March 29, 2019
  • Group’s net debt significantly reduced as decoration company is divested
  • Net Sales slightly up by 0.9%
  • Group’s portfolio reshaped towards mission

Lenzburg, March 29, 2019 – The Hero Group, which has a mission to delight consumers by conserving the goodness of nature, registered strong improvements in numerous financial KPIs in 2018.

In its Annual Report* for 2018, published today, the Group said Operating Profit (EBIT) increased 8.5% versus 2017, reaching CHF 91.1 million, while Net Debt was cut by more than half, dropping to CHF 104.1 million compared with CHF 252.9 million in 2017. Net Income, heavily impacted by the US tax reform in 2017, increased from CHF 20.9 to CHF 62.9m.

Net Sales from continuing operations reached CHF1.16 billion in 2018, 0.9% above prior year. Adjusted for currency translation effects, organic growth was 0.2%.

“While the US (+8.3%) and Emerging Markets (+7.6%) showed good organic growth momentum, we faced challenges in Europe (-2.8%) in a difficult market and competitive environment. Despite this, we managed to improve over last year and are very satisfied with our underlying financial results,” said Hero Group CEO Rob Versloot.

“From a strategic perspective, we made significant progress in 2018 in reshaping our company’s portfolio towards our mission. With the sale of Signature Brands, the Group’s cake decorating and popcorn company in the US, the share of core categories increased to 82% of total sales. Furthermore, we are excited about our new partnership with the German organic baby and toddler food company goodforgrowth GmbH, whose portfolio includes the brand Freche Freunde,” Versloot added.

The overall positive results achieved in numerous financial KPIs in challenging market conditions were once again “testament to the strategic profitable growth direction being pursued by the Group”, said Hero Group CFO Karsten Boyens. “We were able to continue our improvement in Gross Margin in 2018 driven by supply chain efficiencies as well as pricing and portfolio efforts – this was key for our increase in Operating Profit.”

“With the divestment of Signature Brands, we reduced our Net Debt to CHF 104.1 million. This provides the company with a solid basis for further investment to continue to grow the company in core areas,” Dr Boyens added.

With regards to 2019, Hero aims to accelerate Organic Growth, driving a stronger footprint outside Europe, sales in online channels, and innovations in its core categories.

The Hero Group Annual Report 2018 can be viewed here.

* In 2018, we divested the non-core specialties business Signature Brands in the US. In our financial reporting, the results are separated under continuing operations and discontinued operations to allow for better comparisons

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 core product categories of Baby & Toddler Food and Milks, Natural Spreads, Healthy Snacks, and Gluten Free are complemented by its activities in 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 2018, the Group generated revenues of CHF 1.16 billion.

Media contact
Stephen Chetcuti
+41 (0)79 616 1467

Download German press release here