FRoSTA AG: Germany’s Underrated Consumer Staples Champion–A Fresh Update
This German Frozen Food Small-Cap Is Up 25% YTD After Strong FY24 Results—What’s Next?
We all want to eat better and healthier food. FRoSTA AG is a German small cap that has leveraged this trend since 2003 when they introduced their Reinheitsgebot (purity rule), making all their frozen food products free of additives. This almost led them into bankruptcy, as they were a few years too early. Fast forward to 2025 and FRoSTA AG is a thriving part of my portfolio at a 6% weighting. Let’s look at the FY 24 results and see if it’s still an attractive buy after the 25% run since the lows. Here’s a link to my deep dive on FRoSTA AG if you want more background knowledge on the company.
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The headline numbers
On January 10th, FRoSTA’s stock rallied higher after the company pre-announced better-than-expected margins for the year. Revenues came in at 638 million €, down 0.2% and below the initial FY 24 guidance of 3-5% revenue growth. The net income margin, on the other hand, surprised with 6.6% compared to the guidance of “at least 5%.” This led to earnings growth of 23%.
FRoSTA is a family-owned and -run business by the Ahlers family. Like many family businesses, safety is the first priority. FRoSTA has a fortress balance sheet with 110 million in cash and very little debt. This gives them the safety to continue investing in the business as they want and weather any storm. In 2022, they had to strategically elevate inventory levels, for example, due to the supply chain disruptions.
FRoSTA raised the dividend by 20% to 2.4€, after raising it from 1.6€ to 2€ last year. This comes after years of stagnation in dividend growth. I believe FRoSTA is a high-quality company, but don’t expect them to become the next dividend growth darling; it’s not their focus.
Find out what makes FRoSTA AG special
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