Chr. Hansen reports solid organic revenue growth of 9% in the first half of 2017/18:
Food Cultures & Enzymes 12%, Health & Nutrition 8% and Natural Colors 4%. EBIT before special items increased slightly to EUR 135.9 million, corresponding to an EBIT margin before special items of 26.2%. In Q2, organic growth was 9%, and EBIT before special items increased by 2% to EUR 71.2 million. The overall outlook for 2017/18 is unchanged.
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|EUR million||Q2 |
|EBIT before special items||71.2||70.1||2%||135.9||135.6||0%|
|Profit for the period||51.1||50.9||0%||97.6||97.9||0%|
|Free cash flow before acquisitions, divestments and special items||29.9||48.8||(39)%||11.0||29.8||(63)%|
|Organic growth, %||9%||9%||9%||10%|
|Gross margin, %||53.4%||53.7%||53.0%||53.5%|
|EBIT margin before special items, %||27.0%||27.0%||26.2%||27.1%|
|ROIC excl. goodwill, %||32.8%||34.1%||32.1%||35.2%|
Solid development continues
CEO Cees de Jong says: “The solid development from Q1 has continued into Q2, with strong organic growth in Food Cultures & Enzymes from all product categories and regions. Sales of bioprotective solutions also continue to show impressive organic growth rates at around 45%. Strong sales in animal health were driven by an improved sales coverage in EMEA and APAC.
In addition, we continue to benefit from the trend where farmers and feed manufacturers aim to use less antibiotics in livestock production. Probiotics for dietary supplements in North America are still impacted by changing market dynamics, and especially inventory reductions by a few large customers, which suppresses growth temporarily. Growth in both dietary supplements and infant formula in Asia Pacific was strong.
Our EBIT margin before special items in Q2 improved significantly compared with Q1, and was on par with last year despite an adverse impact from currencies of more than 1%-point. Higher depreciations related to the recent capacity expansion were offset by improved production efficiencies in Food Cultures & Enzymes and a better product mix in Health & Nutrition.
We are satisfied with the progress in the first half of the year, and we maintain our overall guidance for the full year. Expectations to organic growth for Food Cultures & Enzymes and Health & Nutrition are unchanged, however, we lower our expectations to organic growth in Natural Colors for the full year to be below the long-term ambition of around 10%, due to the sales development in the first half of the year.”
Outlook for 2017/18
|11 April 2018||
12 January 2018
|Organic revenue growth||8-10%||8-10%|
|EBIT margin before special items||Around 28.9%||Around 28.9%|
|Free cash flow before special items, acquisitions and divestments||Around EUR 188 million||Around EUR 188 million|
The guidance for EBIT margin before special items and for free cash flow before acquisitions, divestments and special items assumes constant currencies from the time of this announcement and for the remainder of the financial year.
Chr. Hansen is a leading, global bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries. We develop and produce cultures, enzymes, probiotics and natural colors for a rich variety of foods, confectionery, beverages, dietary supplements and even animal feed and plant protection. Our product innovation is based on more than 30,000 microbial strains – we like to refer to them as ‘good bacteria’. Our solutions enable food manufacturers to produce more with less – while also reducing the use of chemicals and other synthetic additives – which make our products highly relevant in today’s world. We have been delivering value to our partners – and, ultimately, end consumers worldwide – for over 140 years. We are proud that more than one billion people consume products containing our natural ingredients every day. Revenue in the 2016/17 financial year was EUR 1,063 million. Chr. Hansen was founded in 1874 and is listed on Nasdaq Copenhagen.