Switzerland-based dairy products manufacturer Hochdorf Group has said it is eyeing a sale or partial sale of the business.
In an update on its 2023 performance and the options before the business for financial restructuring, the Bimbosan baby food and Babina infant-formula brands owner said its “approach to potential investors is being expanded accordingly” but said no decisions have yet been made.
Hochdorf has been attempting to reshape its operations for a number of years. In September, it announced plans to close a factory in its namesake Swiss town as part of efforts to focus on infant formula. Some 40 full-time jobs were lost as a result.
In its update for 2023, Hochdorf said it had made further operational progress during the year, generating a “remarkably positive EBITDA” after being in “deep negative territory over the previous years”.
However, on a pessimistic note, the company said it had “come to the conclusion that even a competitive capacity for earnings will not be sufficient enough to compensate for the legacy burdens of the past”, resulting from “complex financing and capital structure” and hence the need to look at options for restructuring.
According to its preliminary, unaudited financial figures, net sales revenue increased in 2023 compared to the previous year with sales in both the food solutions and infant-nutrition divisions "exceeding expectations".
The company said EBITDA was in the “higher single-digit million range”, compared to a loss of SFR10.1m ($11.4m) in 2022.
Hochdorf said the positive operating performance of the past two years has indicated to its management and board that the company has a “profound business model”.
But the group said measures aimed at the recapitalisation of the company have “so far occurred to be hardly achievable, mostly due to further increasing interest rates from the hybrid bond issued in 2017”.
It added: “With joint efforts the executive management and the board of directors will further engage for a continuation of the business on a sustainable financial basis as well as for the preservation of jobs. Various options are being examined with a focus set towards sale or partial sale by keeping the operating business together.”
Just Food has asked Hochdorf for further details of its restructuring plans.
Hochdorf, which can trace its roots back to 1895, has around 330 employees and sells its products in more than 90 countries. As well as manufacturing and distributing its own branded products, it also provides dairy ingredients and offers co-manufacturing services.
