Bioprotection continues to show impressive momentum
Chr. Hansen reports strong organic revenue growth of 10% in the first three months of 2017/18: Food Cultures & Enzymes 12%, Health & Nutrition 10% and Natural Colors 4%. EBIT before special items decreased by 1% to EUR 65 million, corresponding to an EBIT margin before special items of 25.4%. The overall outlook for 2017/18 is unchanged.
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Q1 2017/18 results
|EUR million||Q1 |
|EBIT before special items||64.7||65.5||(1)%|
|Profit for the period||46.5||47.0||(1)%|
|Free cash flow before acquisitions, divestments and special items||(18.9)||(19.1)||1%|
|Organic growth, %||10%||11%|
|Gross margin, %||52.5%||53.4%|
|EBIT margin before special items, %||25.4%||27.1%|
|ROIC excl. goodwill, %||30.9%||34.3%|
CEO Cees de Jong says: “We have had a solid start to the year, with Food Cultures & Enzymes’ organic growth better than expected. Sales of bioprotective solutions continue to show impressive momentum, and this is still without any significant impact from the second-generation FreshQ® products that we launched at the beginning of this financial year. We have also introduced ProKids®, an innovative product concept for a children’s drinking yogurt containing our LGG® probiotic strain. As expected, organic sales growth in Natural Colors was below our long-term ambition.
"Our EBIT margin before special items in Q1 was lower than last year, mainly due to the sale of a property in Argentina in Q1 2016/17, adverse currency impacts and costs related to starting up our new production capacity in Copenhagen. The new capacity is producing ahead of schedule, and we expect to see improving margins from this toward the end of the financial year.
"We are encouraged by the solid start to the year, and we maintain our overall guidance for the full year. We increase our expectations to organic growth for Food Cultures & Enzymes to be even stronger and above the long term 7-8% growth target that we have for this business. At the same time, we lower our expectations to organic growth in Health & Nutrition for the full year to be below our long term guidance for this business due to the challenging market conditions in North America.”
Outlook for 2017/18
|12 January 2018||25 October 2017|
|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 global, differentiated bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries. At Chr. Hansen we are uniquely positioned to drive positive change through microbial solutions. We have worked for over 145 years to enable sustainable agriculture, cleaner labels and healthier living for more people around the world. Our microbial and fermentation technology platforms, including our broad and relevant collection of around 40,000 microbial strains, have game-changing potential. Matching customer needs and global trends we continue to unlock the power of good bacteria to respond to global challenges such as food waste, global health and the overuse of antibiotics and pesticides. As the world’s most sustainable biotech company, we touch the lives of more than 1 billion people every day. Driven by our legacy of innovation and curiosity to pioneer science, our purpose – To grow a better world. Naturally. – is at the heart of everything we do.