Swiss milk processor Hochdorf is up for sale. Despite a return to operating profitability, a restructuring under its own steam is off the table – the financial burdens of the past are too heavy.
Hochdorf wants to broaden its approach to potential investors. Various options are under discussion. The focus is on a sale or partial sale, with the aim of keeping the operating business together.
Hochdorf has undergone a reorganisation and tough cuts in recent years. For example, the company decided to close production in Hochdorf, Lucerne, by 2025 and to concentrate production in Sulgen in eastern Switzerland. On the other hand, new revenue was also to be tapped into, for example with the planned entry into the US market next year. Hochdorf certainly made progress in this respect. Both sales and operating profit in the 2023 financial year exceeded the company’s own expectations. At an operating level, the company returned to profitability with EBITDA in the high single-digit CHF million range. In the previous year, the company had posted a loss of just over CHF10m. And the operating business is no longer burning money, but generated a cash flow in the double-digit million range in 2023. Liquidity for ongoing operations is also secured, as Hochdorf points out.
However, the management and Supervisory Board see a way for the company to shoulder its high financial burdens. Following a further review, the conclusion was reached that even a competitive earning power would not be sufficient in any plausible scenario to carry the increasing legacy burdens from the complex financing and capital structure, Hochdorf writes. Recapitalisation also proved to be virtually unfeasible.
