Hero profit 2023 burdened by transformation costs
Published: Friday, Mar 22nd 2024, 12:10
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The Aargau-based canned ravioli, confitures and baby food manufacturer Hero achieved higher sales in 2023. However, net profit fell significantly due to one-off transformation costs.
The Hero Group achieved slightly higher sales of CHF 1.22 billion (+1.2%) last year. However, currency effects had a clearly negative impact due to the strong Swiss franc. In organic terms, i.e. at constant exchange rates and excluding the impact of divested units, sales increased by 10.9%, as the company announced on Friday.
All categories and regions contributed to sales growth, the report continues. With a share of just under 40 percent, baby and infant nutrition remained the largest segment, followed by spreads (20%) and snacks (15%). "Our strong brands and market positions have enabled us to implement the necessary price increases while keeping operating costs under control," emphasized CFO Karsten Boyens.
Closure of two factories
In operational terms, however, the company suffered from transformation costs. Operating profit (EBIT) before extraordinary transformation effects rose to CHF 57.8 million from CHF 40.3 million. However, taking these effects into account, EBIT halved to 23.3 million from 40.3 million in the same period of the previous year. The bottom line was therefore a significantly lower net profit of CHF 11.0 million, compared to CHF 26.8 million in the previous year.
Hero specifically puts the transformation costs at CHF 34.5 million. These were mainly due to the closure of the two factories in Lenzburg and Götene (Sweden) as well as the sale of the Gluten Free business to Northern Europe.
Looking ahead, Hero CEO Rob Versloot is confident that the company will benefit in the long term from the transformation steps it has initiated. However, the economic and geopolitical environment is expected to remain challenging in the current financial year. Versloot nevertheless expects to be able to achieve profitable growth in 2024.
©Keystone/SDA
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