Solid start to the year: 10% organic growth

Solid start to the year: 10% organic growth
Press Release | Jan 17. 2019 07:08 GMT

Chr. Hansen realizes solid organic growth of 10% in the first three months of the financial year 2018/19, delivering in line with our 'Nature’s no. 1 – Sustainably' growth ambitions.

Chr. Hansen reports solid organic revenue growth of 10% in the first three months corresponding to 6% reported growth due to adverse currency impacts: Food Cultures & Enzymes 10%, Health & Nutrition 17% and Natural Colors 6%. EBIT before special items increased by 9% to EUR 71 million, corresponding to an EBIT margin before special items of 26.3% which was up 0.9%-point compared to last year. The overall outlook for 2018/19 remains unchanged.

CEO Mauricio Graber says: “We have had a solid start to the year, with Food Cultures & Enzymes delivering strong organic growth with contributions from volume and EUR pricing, in line with our expectations. Organic growth in Health and Nutrition was also strong, driven by global demand for probiotics for infant formula in Human Health. Animal Health was impacted by timing of orders, but the underlying interest in microbial solutions for animal farming remains strong, and we continue to improve our route-to-market. Plant Health had another excellent quarter in Latin America, although absolute numbers are still modest. We were also pleased to see the momentum in Natural Colors continue in Q1, driven by demand for coloring foodstuff, where we also launched new products for the FRUITMAX® range during Q1.

"Our EBIT margin before special items in Q1 increased by 0.9%-point and was driven by improved margins in Health & Nutrition and Natural Colors. The EBIT margin in Food Cultures & Enzymes was positively impacted by a strong development in gross margin, and ended on par with last year, as we continued to invest in our growth and innovation priorities. We continue to expect a positive contribution from further scalability benefits, as we ramp up utilization of the new capacity in our facility in Copenhagen.

"We are encouraged by the solid start to the year, and we maintain our overall guidance for the full year. Our pipeline of products to be launched this year, from all three business areas, looks very promising and will support the growth potential of Chr. Hansen.”


OUTLOOK FOR 2018/19

The overall outlook for 2018/19 is unchanged compared to the announcement of October 15, 2018

                                                                     January 17, 2019 October 15, 2018
Organic revenue growth 9-11% 9-11%
EBIT margin before special items around 29.5% around 29.5%
Free cash flow before acquisitions,
divestments and special items
around last year around last year

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.

EUR million Q1
2018/19
Q1
2017/18
Growth
Revenue 269.4 254.5 6%
EBIT before special items 70.8 64.7 9%
Profit for the period 51.1 46.5 10%
Free cash flow before acquisitions and special items (32.5) (18.9) (72)%
Organic growth, % 10% 10%
Gross margin, % 54.9% 52.5%
EBIT margin before special items, % 26.3% 25.4%
ROIC excl. goodwill, % 31.4% 30.9%

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