Investora 30 September HOCHDORF Holding Ltd

Transcription

1 Investora 30 September 2015 HOCHDORF Holding Ltd

2 Investora, 30 September 2015 Agenda 1. HOCHDORF in brief Thomas Eisenring 2. HOCHDORF in numbers Marcel Gavillet 3. Market update Thomas Eisenring 4. Strategy implementation Thomas Eisenring 5. Outlook (Strategy ) Thomas Eisenring 6. Questions Thomas Eisenring 2

3 HOCHDORF in brief History HOCHDORF is an established Swiss food company Founding of the «Centralschweizerische Natur Milch-Exportgesellschaft» (central Swiss milk export company) by 21 shareholders 1906 Start of roller dried whole milk powder production for the chocolate industry 1908 Start of infant formula production 1953 Launch of HUMANA, the first adapted infant formula 2003 Takeover of the Sulgen plant 2006 Start of the global infant formula business 2013 Full takeover of the Medeikiai plant (Lithuania) % shareholding in Uckermärker Milch GmbH in Prenzlau (D) Takeover of Marbacher Ölmühle GmbH in Marbach (D) 3

4 Companies and participations Image HOCHDORF in brief HOCHDORF Holding Ltd is organised in three business units and holds several subsidiary companies and investments. HOCHDORF Holding Ltd HOCHDORF Swiss Nutrition Ltd (100%) HOCHDORF Baltic Milk Ltd (100%) Dairy Ingredients Uckermärker Milch GmbH (60%) Ostmilch Handels GmbH (26%) HOCHDORF Americas Ltd (60%) HOCHDORF South Africa Ltd (90%) Marbacher Ölmühle GmbH (100%) Baby Care Cereals & Ingredients

5 HOCHDORF in brief Number of employees Significantly more employees due to the acquisition of Uckermärker Milch GmbH and Marbacher Ölmühle GmbH. 600 Currently 26 apprentice in five professions

6 In mio. kg HOCHDORF in brief Major milk processor The third largest milk processor in Switzerland /02 02/03 04/ HJ 2015 Milk Whey 6

7 In mio. CHF HOCHDORF in brief Sales development HOCHDORF products are sold in 80 countries HJ 2015 Turnover Switzerland Export / Turnover foreign countries 7

8 Investora, 30 September 2015 Agenda 1. HOCHDORF in brief Thomas Eisenring 2. HOCHDORF in numbers Marcel Gavillet 3. Market update Thomas Eisenring 4. Strategy implementation Thomas Eisenring 5. Outlook (Strategy ) Thomas Eisenring 6. Questions Thomas Eisenring 8

9 HOCHDORF in numbers Good operational first-half results Strong increase of the processed liquid quantity and sold products due to the acquisitions made at the end of Processed liquid quantity: Mio. kg (prev. year: Mio. kg; +64.7%) Quantities sold: t (prev. year : t; %) EBITDA: CHF 15.5 Mio. (prev. year : CHF 13.8 Mio.; +12.5%) EBIT: CHF 10.7 Mio. (prev. year : 10.2 Mio.; +4.9%) Net profit: CHF 4.1 Mio. (prev. year : CHF 6.3 Mio.; -34.3%) Important influences: 60% shareholding in Uckermärker Milch GmbH Takeover of Marbacher Ölmühle GmbH Abolition of the Euro minimum rate 9

10 HOCHDORF in numbers Key figures income statement Numbers HY 2015 are characterized by the acquisitions and the currency issue. in CHF HY HY Gross sales revenue 284, , , ,145 Production revenue 286, , , ,137 Earnings before interest, tax, depreciation and amortisation (EBITDA) As % of production revenue 15, % 27, % 13, % 18, % Earnings before interest and tax (EBIT) As % of production revenue Corporate profit (Net profit/-loss) As % of production revenue Earned capital As % of net sales revenue 10, % 4, % 8, % 20, % 16, % 25, % 10, % 6, % 11, % 10, % 6, % 18, % 28.8% increase of gross sales revenue in comparison with the first half of Good profitability despite currency shock (EBITDA +12.5% and EBIT +4.9% in comparison with the first half of 2014). Net profit reduced by the financial results. 10

11 HOCHDORF in numbers Balance sheet Higher equity thanks to partial conversion of the syndicated loan. Assets in CHF 1, Current assets 157, % 167, % Non-current assets 164, % 163, % Total assets 322, % 331, % Liabilities Current liabilities 73, % 131, % Non-current liabilities 97, % 56, % Total liabilities 171, % 187, % Shareholders equity 151, % 143, % Total liabilities and shareholders equity 322, % 331, % Syndicated loan extended change from current liabilities to non-current liabilities. Increased shareholders equity thanks to partial conversion of the syndicated loan. 11

12 HOCHDORF in numbers Cash flow statement Increased investing activities. in CHF 1, Earned capital 8, %* 11, %* Change in net current assets -20,250-23,181 Cash flow from operating activities -11, %* -11, %* Cash flow from investing activities -10,857-8,180 Free cash flow -22, %* -20, %* Cash flow from financing activities 2,481-5,396 Currency translation 1, Net change in cash and cash equivalents -18,805-25,653 Cash and cash equivalents at ,380 53,938 Cash and cash equivalents at ,575 28,285 Investing in activities that includes primarly efficiency improvement projects and strategic projects. Investing activities will remain high in * % of net sales revenue 12

13 In mio. CHF HOCHDORF in numbers Gross sales revenue by area Growth of Dairy Ingredients business thanks to Uckermärker Milch GmbH Dairy Ingredients Baby Care Cereals & Ingredients H

14 HOCHDORF in numbers Gross sales revenue by region (in CHF 1,000) Turnover of Swiss business significantly lower than in the previous year % 766 0% % % % % Switzerland Europe Asia Middle East / Africa North- and Southamerica Others 14

15 Investora, 30 September 2015 Agenda 1. HOCHDORF in brief Thomas Eisenring 2. HOCHDORF in numbers Marcel Gavillet 3. Market update Thomas Eisenring 4. Strategy implementation Thomas Eisenring 5. Outlook (Strategy ) Thomas Eisenring 6. Questions Thomas Eisenring 15

16 Market update Tense situation in the dairy market International prices for milk and milk derivatives almost cut in half for the last two years. Qualität Price development of butter and skimmed milk powder Price development of milk in ct/kg Source: ife Forschungszentrum Kiel

17 High dynamics in Baby Food Image Accessibility Market update We consider the APAC and MEA regions as the most attractive markets. Europe Qualität Americas MEA 3 5 APAC Source: TechNavio Insight/own estimation Ø Growth % Mrd. USD 2014 Mrd. USD 2019

18 Tough competition in China Image Market update Market growth and market size are important criteria; however, a differentiated approach is required. Qualität Source: South China Morning Post/China Daily

19 Investora, 30 September 2015 Agenda 1. HOCHDORF in brief Thomas Eisenring 2. HOCHDORF in numbers Marcel Gavillet 3. Market update Thomas Eisenring 4. Strategy implementation Thomas Eisenring 5. Outlook (Strategy ) Thomas Eisenring 6. Questions 19

20 Strategy Management Summary The new strategy of HGR can be summarized as a Added Value Strategy with five main elements: 1. Cost Efficiency Cost efficiency implies strict budget driven cost-controlling and -improvement. Main activities are professional milk sourcing and consequent reduction of operating expenses. Insourcing of logistics will be one of the key drivers. 2. Product-Portfolio & -Development Product Portfolio has to be streamlined and wherever possible added value products should be developed. Key drivers will be higher value whey products (lactose and WPC) and the line extension into kids food. 3. Utilisation Overcapacity has to be reduced as much as possible. Key drivers are new contract works and co-operations. 4. Internationalisation Internationalisation is the only source of growth. Key driver will be the acquisition of 20,000 t of capacity in Europe (preferably Germany). 5. Business Model/Forward Integration Wherever feasible we should move closer to the end consumer by forward integration. We have to be very selective to not endanger existing business relationships. 20

21 Cost Efficiency Image Strategy implementation An important milestone to increase efficiency has been implemented with the commissioning of the first stage of warehouse logistics at our Sulgen plant.

22 Product-Portfolio development(i) Image Strategy implementation By the completion of the IONEX project HOCHDORF becomes the only Swiss producer of lactose and can use this product directly for its production of baby food.

23 Product-Portfolio development (II) Image Strategy implementation The development of new products in the field of kids food is being pursued with high priority. First launches are planned at the beginning of 2016.

24 Utilisation Image Strategy implementation At the Hochdorf plant capacities will be optimized and increased by 50 million kg of milk. We expect an additional EBIT under full capacity of approximately CHF 2 million.

25 Internationalisation (I) Image Strategy implementation In Prenzlau the Production planning of baby food is completed. Start of production is expected by the end of 2016.

26 Internationalisation (II) Image Strategy implementation The integration of Marbacher Ölmühle GmbH has been completed. Due to lower costs we can now address new markets with our healthy products.

27 Internationalisation (III) Image Strategy implementation With the establishment of HOCHDORF Americas Ltd in Uruguay and the HOCHDORF South Africa Ltd in Cape Town we made two important steps. HOCHDORF Americas: Improving market access through local precense HOCHDORF South Africa: Competence centre for the production of chocolate Marketing on the principle «on the continent for the continent»

28 Business Model/Forward Integration Image Strategy implementation As we extended our senior management team by the position Head of «Global Marketing & Sales» we laid the foundation stone for the development of a «Branded Business». Three targets for a majority holding are identified. First exploratory talks are positive.

29 COMPETITIVE STRENGTH Strategy implementation Implementation success BA strategies (I) high low Infant milk formulas Whey derivatives MARKET ATTRACTIVENESS Cereals & Ingredients Contract works Roller dried WMP Cereals & Ingredients Roller dried WMP Infant milk formulas high Whey derivatives low ff. 29

30 Strategy implementation Implementation success BA strategies (II) Basically, all business areas have performed well in their markets. 1. New Organisation proved Structures and processes simplified Transparent and quickly available management key figures 2. Dairy Ingredients performed well in a difficult environment Held position in the Swiss market for roller dried WMP more or less Successful internationalisation with milk protein products Optimization in the Medeikiai plant increase its capacity 3. Baby Care lays in wait in a highly interesting business area New sales office in Uruguay and new clients in Latin America Optimization of the customer portfolio Enormous potential for growth as soon as capacity expansion is implemented 4. Cereals & Ingredients in a promising position Operational integration of Marbacher Ölmühle GmbH Development of new VIOGERM products, e.g. VIOGERM High Protein VIOGERM wheat germ is positioned successfully as hazelnut and almond substitute 30

31 Investora, 30 September 2015 Agenda 1. HOCHDORF in brief Thomas Eisenring 2. HOCHDORF in numbers Marcel Gavillet 3. Market update Thomas Eisenring 4. Strategy implementation Thomas Eisenring 5. Outlook (Strategy ) Thomas Eisenring 6. Questions Thomas Eisenring 31

32 Outlook (Strategy ) Specific country strategies We consistently limit our China business in the Baby Care area at 25%. NORTH AMERICA: Opportunities under observation. Concrete project in planning. LATIN AMERICA: Extension HOCHDORF Americas with main focus Mexico & Brasil. Check further cooperation opportunities. EUROPE: Growth with existing customers. MEA: Growth with existing customers. Analysis forward integration Baby Care. Forward integration Dairy Ingredients (HOCHDORF South Africa). CHINA & VIETNAM: Growth with existing customers. 32

33 Outlook (Strategy ) Product Offensive One of the main programs starting in 2016 will be a product offensive which should provide more added value. Kids Foods With fruit, vegetable and wheat Weaning Foods Only branding/trading Instant Fortified with minerals and vitamins Base Powders As ingredients for more basic infant formulas Chocolate Produced in South Africa «on the continent for the continent» 33

34 Outlook (Strategy ) Forward Integration With the desired forward integration HOCHDORF will probably double margins in the Baby Care business area. 1. Ideally, an existing customer Thank to our close relations we know very well the potentials, strenghts and weaknesses of our customers 2. Market focus APAC and/or MEA From our point of view APAC and MEA are the most interesting regions China business should be limited to 25% furthermore Competition in MEA is less intense 3. Financing out of capital increase According to our transaction idea a takeover should be mainly financed by a capital increase (remaining authorized capital; shares) Capital increase «at best» 34

35 Outlook (Strategy ) Capital Available (TCHF) Forward integration will need further investments but the return will be high and increase significantly the value of HOCHDORF. Source Calculation Authorized Capital 318,000 shares x 130 CHF 41,340 Credit Line Credit: 80,000 Credit Option: 20,000 Total: 100,000 Settlement: 40,000 Liquidity: 20,000 Total Available: 40,000 40,000 Convertible Bond 365,640 shares x 123,40 CHF x 0,5 22, ,840 35

36 Outlook (Strategy ) HOCHDORF is interesting Good reasons for an investment into HOCHDORF Group. 1. Solid Track Record The past two years, HOCHDORF has proven that we succeed in operating solid even under difficult conditions 2. Outstanding USPs Concerning Food Safety, HOCHDORF as a Swiss company enjoys an excellent reputation HOCHDORF is the only third-party manufacturer of Swiss infant milk formulas The only Swiss manufacturer of lactose and whey protein in IMF quality 3. Respectable margin potential Forward integration allows significantly higher margins New products with considerable potential (e.g. Kids Food-Products and milk products with high added-value) 36

37 Investora, 30 September 2015 Financial Calendar Upcoming HOCHDORF Group events. 27 January 2016 Initial information about the 2015 business year 07 April 2016 Results for the 2015 business year 06 Mai 2016 Annual General Meeting 17 August 2016 Half-year results for

38 Thank you for your interest in the HOCHDORF Group 38