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Outlook & long-term ambitions

Outlook for 2018/19


For 2018/19, organic revenue growth is expected to be 9-11%, positively impacted by a high EUR price effect. 
Food Cultures & Enzymes is expected to grow above the long-term ambition of 7-8% organic growth, with the additional growth driven by a high EUR price impact. Health & Nutrition is expected to grow organically at 10% or above, while Natural Colors is expected to grow organically between 6-10%.


The EBIT margin b.s.i. is expected to be around 29.5%. Increased utilization of production capacity in Food Cultures & Enzymes will have a positive impact on the margin. The positive margin development is expected to be partly offset by increased investments into the lighthouse projects and other strategic priorities.


Free cash flow before acquisitions, divestments and special items is expected to be around the EUR 196 million realized in 2017/18. This expectation assumes lower growth in cash flow from operating activities than growth of EBIT before special items, due to higher taxes paid in 2018/19 mainly related to the absence of acquisition-driven tax benefits realized in 2017/18. Cash flow used for operational investment activities will be at a relatively high level and is expected to be between EUR 110-130 million. This includes multiple investments across the group, and also assumes a successful sale-and-lease-back of the company’s main site in Hørsholm in Q4 2018/19. 


The outlook is based on constant currencies and stable raw material prices and assumes no acquisitions and investments. The outlook is also based on the current political and economic environment, although there is a risk of increased political and economic uncertainty – e.g. the economic climate in the Middle East and Latin America, and trade tensions between large economies. Any deterioration in these situations might impact the outlook.


Chr. Hansen is a global company serving more than 140 countries through subsidiaries in more than 30 countries. 

The most significant exchange rate exposure relates to USD, which accounts for 25-30% of revenue, while the exposure to other currencies is more modest. A 5% decrease in the USD exchange rate impacts revenue measured in EUR negatively by around EUR 15-20 million. 

Organic revenue growth is sensitive to exchange rate fluctuations in currencies for which Chr. Hansen applies a EUR-based pricing model, and to changes in raw material prices for natural colors as some contracts are adjusted for movements in raw material prices. 

The EBIT margin is also sensitive to exchange rate fluctuations and to changes in raw material prices for natural colors.  Production in the US and sourcing in USD only partly offset the impact on revenue from changes in the USD exchange rate. Therefore, the relative EBIT exposure is higher than the 25-30% revenue exposure. A 5% decrease in the USD exchange rate would impact EBIT negatively by roughly half of the revenue impact.

The sensitivity to currency also applies to free cash flow.

The use of currency hedging of balance sheet exposures and future cash flows is described in note 4.3 to the Consolidated Financial Statements 2017/18.

Long-term financial ambitions through 2021/22


Organic revenue growth rate of 8-10% per year is expected supported by all business areas, with average organic growth of 7-8% in Food Cultures & Enzymes.


The EBIT margin before special items is expected to increase to above 30%. 
This improvement will be driven by a continued focus on maintaining cost discipline and on productivity and efficiency gains across the organization, to some extent offset by investments in innovation, emerging markets and in exploring new growth opportunities. 


Free cash flow before acquisitions, divestments and special items is expected to increase at a compound annual growth rate of around 10% over the period, compared to the base year 2016/17 (EUR 188 million).The ambitions for the EBIT margin and free cash flow are sensitive to currency exchange rate fluctuations.


Sustainability ambitions for 2021/22


Chr. Hansen’s sustainability strategy focuses on how the Company’s natural products can help address global trends and challenges. The strategy focuses on three areas where Chr. Hansen has the largest impact:

Better farming

Help feed the growing population by promoting sustainable agriculture using Chr. Hansen’s biological plant Health solutions and silage inoculants. By 2024/25, the ambition is to expand the reach of Chr. Hansen’s natural plant Health solutions to have reached an accumulated 25 million hectares of farmland.


Help customers reduce food waste through Chr. Hansen’s bioprotection solutions and enzyme technology. By 2021/22, the ambition is to reduce global yogurt waste by 2%, equivalent to 1,200,000 tons accumulated.

Good health

Improve global health through probiotics and healthier and safer food ingredients. For 2021/22, the ambition is to have launched six new products with a documented health effect. 


As part of the strategy review and to reduce the environmental footprint of its own operations, Chr. Hansen revised its 2021/22 operational targets for health and safety, energy, water, CO2 and waste recycling. Compared to the base year 2013/14, Chr. Hansen is aiming for: 

  • 20% energy and water efficiency improvement

  • 25% CO2 efficiency improvement

  • 40% waste recycling

    A full report on sustainability and progress on commercial and operational targets during 2017/18 can be found at www.chr-hansen.com/en/sustainability-report-1718