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Hero Group posts strong organic growth

Published: Friday, March 23, 2018
  • Net sales up 3.5% organically to reach CHF1.28 billion
  • Strong operational cashflow further reduces net debt
  • US tax reform impacts net income

The Hero Group, which has a mission to delight consumers by conserving the goodness of nature, registered an organic growth of 3.5% in 2017, strongly up from previous years.

In its Annual Report, published today, the Group said its core categories showed an impressive 7% increase versus 2016.

According to CEO Rob Versloot, the positive results are testament to the strategic choices being made by the Group: “We are pursuing a strategy which involves focusing on growing our core categories where we believe we have the capabilities to win. In 2017 in particular, we saw this focus on profitable growth bearing fruit.”

The net sales of the Group increased to CHF 1.28 billion in 2017, while EBIT for the year was reported at CHF 105.3 million.

“Our EBIT stayed on a solid level and was right on target for the entire year. When compared to 2016, it is slightly down because of one-time effects and currency impacts,” said CFO Karsten Boyens. “Overall, we are pleased with the underlying developments which show improvements in our Gross Margin, increased investments in Advertising & Promotion, and accelerated organic growth. This is fully in line with our profitable growth strategy.”

Of significant interest was the strong operational cashflow in 2017 which reached a level of CHF 135 million (versus CHF 118 million in 2016) driven by the good business performance as well as major improvements in net working capital, Dr Boyens said. As a consequence, net debt was significantly reduced in 2017, down to CHF 253 million from CHF 329 million a year earlier.

As with many other companies with a presence in the US, income tax expenses were heavily impacted by the US tax reform. This resulted in an extraordinary accounting effect in tax expense of CHF 50.1 million. Despite this impact, the Group still managed to post a net income for the year of CHF 20.9 million.

Versloot concluded: “We have strengthened the fundamentals of the business and expect further improvements in the years to come as we continue our transformation of the company towards one that is more integrated and focused with a compelling mission at its core.”

The Hero Group Annual Report 2017 can be viewed here.

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 (Jams), and Healthy Snacks are complemented by its activities in Gluten Free product and decorations. 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 2017, the Group generated revenues of CHF 1.28 billion.

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

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