On track to deliver ambition for the year, outlook for 2020/21 unchanged
- Q3 2020/21 organic sales growth was 4%, equally split between volume/mix and price. The Q3 organic growth was impacted by a reduced contribution from EUR-based pricing compared to the first half, and a higher comparable, as Q3 last year was positively impacted by COVID-19 related customer inventory build-up. YTD organic growth at 8% and on track to deliver 6-8% organic growth for the year.
- Integration of commercial activities in UAS/HSO has been completed and integration of manufacturing is progressing with good sales momentum in Q3.
- Q3 EBIT margin b.s.i. of 29.3%, bringing the YTD margin to 27.3% and well on track to deliver on the outlook for the year.
- Profit for Q3 of EUR 682 million was positively impacted by recognized gain from the divestment of Natural Colors of EUR 636 million.
| EUR million | Q3 2020/21 | Q3 2019/20 | Growth | YTD 2020/21 | YTD 2019/20 | Growth |
| Revenue | 280.6 | 256.1 | 10% | 784.1 | 715.7 | 10% |
| EBITDA before special items | 106.6 | 105.7 | 1% | 287.5 | 279.6 | 3% |
| EBIT before special items | 82.4 | 88.3 | (7%) | 213.9 | 229.2 | (7%) |
| Profit from continuing operations | 49.5 | 63.6 | (22%) | 131.7 | 164.0 | (20%) |
| Free cash flow before acquisitions and special items | 85.0 | 94.4 | (10%) | 119.9 | 143.5 | (16%) |
| Organic growth | 4% | 9% | 8% | 6% | ||
| Gross margin | 57.3% | 59.8% | 56.6% | 59.7% | ||
| EBITDA margin before special items | 38.0% | 41.3% | 36.7% | 39.1% | ||
| EBIT margin before special items | 29.3% | 34.5% | 27.3% | 32.0% | ||
| ROIC excl. goodwill | 25.3% | 38.0% | 23.7% | 34.0% |
CEO Mauricio Graber says: “Organic growth in Q3 was lower than in the first half of the year, as expected. This was primarily due to a reduced positive effect from EUR-based pricing and a higher comparable as customers built safety inventories due to the COVID-19 lockdowns last year. Nevertheless, we did see an acceptable volume growth in FC&E driven by solid momentum in cheese in North America and a reduced negative impact from the Chinese dairy market. While not satisfactory, the flat organic growth for Health & Nutrition was partly driven by the higher comparable from Q3 last year for Human Health, while Animal and Plant Health delivered solid growth. The acquired probiotics businesses within Human Health delivered a strong sales performance in Q3.
As the world gradually re-opens we’re focused on getting our sales force and innovation teams even closer to our markets and customers in order to fuel the innovation agenda of the markets we serve, in terms of both new applications and efficiencies. This is supported by the launch and implementation of new products addressing key challenges and opportunities such as bioprotection and fermented plant bases.
While keeping a firm focus on delivering on our outlook for the year, I’m pleased with the progress we’re making in transforming Chr. Hansen into a fully-focused bioscience company based on our unique microbial and fermentation technology platforms. The completion of the NCD divestment was a key milestone, another being the integration of UAS and HSO. Despite the initial challenges, we’re also progressing with the new long-term lighthouse within the emerging HMO market.
We remain on track to deliver on our ambition for the year and the outlook therefore remains unchanged. The overall outlook for Human Health remains positive but a changed mix between organic and acquisition driven sales which will keep Group organic growth below our original expectations in Q4.”
Outlook for 2020/21
| Organic revenue growth | 6-8% |
| EBIT margin before special items | 27-28% |
| Free cash flow before special items, acquisitions and divestments | EUR 140-160 million |
The guidance for EBIT margin before special items and for free cash flow before acquisitions 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 almost 150 years to enable sustainable agriculture, better food and healthier living for more people around the world. Our microbial and fermentation technology platforms, including our broad and relevant collection of around 50,000 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 one of the world’s most sustainable companies, 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.
