Swiss food group Hügli has booked a steep decline in 2012 profits, but insisted it has got off to a strong start in the first quarter of 2013.
Hügli booked a 24% drop in operating profit for fiscal 2012, with EBIT declining to CHF21.5m (US$23.1m) in the 12 month period. Net income was down 23% to CHF15m, the group added.
The company said the decline was largely the consequence of weaker sales, lower profit margins and the negative impact of foreign exchange. Hügli emphasised that the strength of the Swiss franc was hitting demand at home – where the appeal of comparatively cheap imports has risen – and overseas. The strength of the Swiss franc made it harder for the group to pass rising commodity costs on to consumers, the group added.
Sales dropped by 2.2% in the period, to CHF324.8m.
Nevertheless, the company emphasised it has made a good start to 2013, with first-quarter organic sales down just 0.2% “within expectations”. Total sales, including acquisitions, were up 11% in the period, the company added.
Hügli suggested it is well positioned to pursue “all available opportunities” and generate profitable growth. For FY 2013, the company said it expects to benefit from sales growth of 10% and a stabilisation of commodity prices. The company is also progressing cost management initiatives to increase operating profit.