Hero Group sales in 2019 up 2.2%Published: Friday, March 27, 2020
- Branded core category sales up 3.2%
- Group invests in new strategic partnership and joint venture
- Sustainability Commitment to be Climate Positive by 2030 launched
Lenzburg, March 27, 2020: The Hero Group, which has a mission to delight consumers by conserving the goodness of nature, published its 2019 Annual Report today and reports net sales of CHF 1.19 billion, an increase of 2.6% compared with the previous year, with net income also increasing slightly to CHF 63.3 million. Adjusted for currency and M&A effects, the organic growth was 2.2%.
“Despite a difficult start to the year, we managed to accelerate our performance in the second half of 2019 leading to an organic growth of our branded business in core categories of 3.2%,” said Rob Versloot, Hero Group CEO.
Organic growth was driven by the Group’s highly successful Healthy Snacks category that jumped 12.2% in 2019 and a strong development of Hero’s largest category Baby & Toddler Food category, which saw an increase of 4.7% in branded business.
“Our strategic choice to focus on core categories paid off. Since 2016, we have increased the share of core categories from 68% to 79% of our sales,” Versloot said.
Regionally, the US business grew 7.8% while Emerging Markets were collectively up 3.4%. The Group’s most significant region, Europe, returned to growth with an organic development of 0.7% versus prior year.
EBIT remained at a healthy level of CHF 83.1 million. The decline versus previous year’s CHF 91.1 million results from adverse currency effects, higher investments in marketing and a lower level of non-recurring income.
Karsten Boyens, Hero Group CFO, said: “We are pleased that we managed to increase our net income in addition to our top-line despite headwinds and investments in 2019.”
Net income from continuing operations increased by 2.3% from CHF 60.6 million in prior year to CHF 62.0 million in 2019 supported by strong progress in the Financial Result. Including effects from discontinued operations, the total net income was CHF 63.3 million.
The company entered into a strategic partnership with a leading, fast growing German baby and toddler food company (goodforgrowth GmbH) whose portfolio includes the brand Freche Freunde, and established the company MadreNatura AG, a joint venture with the Italian Angelini Group, to enter the Italian baby and toddler food market.
Net debt stayed low at CHF 120.2 million (prior year: CHF 104.1 million in 2018) in the year under review.
“We are very pleased that we could finance our investments in Supply Chain and strategic partnerships out of the operational cashflow of the year. Excluding accounting effects from the new IFRS leasing standard, our net debt would be below prior year,” Dr Boyens commented.
The resulting Net debt / EBITDA ratio remained at a low level of 0.9.
With regards to 2020, Dr Boyens said the outbreak of Covid-19 across the world has made it difficult to provide outlooks, but the food sector is reasonably well placed to weather the storm of uncertainty.
“As a food company we have a special responsibility to society in the current situation. Our utmost priority these days is to ensure continuity of our operations to deliver to market demands,” Versloot added.
He stressed that the Group is monitoring the situation closely and has taken all the necessary precautions to ensure the health and safety of employees and consumers.
The full 2019 Hero Group Annual Report can be viewed here.
Hero launches Sustainability Commitment
The Hero Group is strengthening its sustainability credentials with a commitment to become climate positive by 2030.
Rob Versloot, Hero Group CEO, said: “Our sustainability commitment is derived from our mission to delight consumers by conserving the goodness of nature, and our ambition is to be climate positive by the end of this decade. This means we will give back more than we take.”
The Group’s sustainability strategy is based on three pillars: Sustainable sourcing, net neutral production, and naturally healthy food.
“We are seeking to conserve natural resources via strategic sustainable sourcing in collaboration with suppliers and farmers. On the second level, we want to conserve natural resources having net neutral production facilities. Finally, we are enhancing our portfolio to give consumers more naturally healthy options that are good for us, but also the planet,” Versloot said.
More information on sustainability at Hero can be found 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, and Healthy Snacks, 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 2019, the Group generated revenues of CHF 1.19 billion.
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