Chr. Hansen reports solid 7% organic growth for Q3 – with improved EBIT margin

Chr. Hansen reports solid 7% organic growth for Q3 – with improved EBIT margin
Chr. Hansen today announces that it will initiate a process to explore strategic options for Natural Colors Division.
Press Release | Jul 02. 2020 06:06 GMT

Full year guidance maintained – new strategy to be presented in August

Chr. Hansen today reports organic revenue growth of 7% in Q3, corresponding to 4% EUR growth, with an improved momentum compared to 1H as expected: Food Cultures & Enzymes 8%, Health & Nutrition 12% and Natural Colors 1%, increasing the Group organic revenue growth in the first nine months of 2019/20 to 5%. COVID-19 impacts on revenues in Q3 were a net positive. In Q3, EBIT before special items increased by 5% to EUR 97 million, and EBIT margin before special items increased by 0.4 %-point to 30.8%. The full-year outlook on organic growth and EBIT margin b.s.i. is unchanged, while FCF b.a.s.i is increased to above EUR 200 million.

EUR million Q3
2019/20
Q3
2018/19
Growth YTD
2019/20
YTD
2018/19
Growth
Revenue 313.8 302.0 4% 880.9 855.2 3%
EBIT before special items 96.5 91.7 5% 249.8 241.3 4%
Profit for the period 70.0 66.5 5% 178.8 175.6 2%
Free cash flow before acquisitions and special items 106.3 48.9 117% 147.4 56.5 161%
Organic growth, % 7% 8% 5% 9%
Gross margin, % 54.9% 56.6% 55.0% 55.4%
EBIT margin before special items, % 30.8% 30.4% 28.4% 28.2%
ROIC excl. goodwill, % 35.0% 37.1% 31.8% 34.3%

Demonstrated resilience
CEO Mauricio Graber says: “We are pleased with our Q3 performance, as our business demonstrated resilience during the first volatile months since the outbreak of COVID-19 thanks to our essential natural ingredient solutions for the food, nutritional and agricultural industries. Customers increased safety stocks of essential ingredients in March and early April, to carry them through potential supply chain disruptions and then inventories began to normalize late April and in May. Our innovative solutions have proved their value, and we were able to continue the strong momentum from recent product launches such as the dairy enzymes CHY-MAX® Supreme and NOLA® Fit, and bioprotection posted another strong quarter. Animal Health continued to perform strongly driven by BOVAMINE® Dairy probiotics; and Human Health also delivered strong growth, supported by consumers’ interest in probiotics with indications for immune benefits. Natural Colors also delivered positive growth driven by FRUITMAX®, despite challenging conditions from COVID-19 and low raw material prices.

"Our Q3 EBIT margin before special items was up by 0.4%-point driven by scalability benefits in production and lower travel expenses due to COVID-19 travel restrictions – however, these positives were partly offset by higher freight costs that were also driven by COVID-19. Our strong business model and financial position allow us to sustain investments in growth opportunities and innovation. Free cash flow before acquisitions and special items grew by 117% in Q3 and is up 161% after nine months, primarily due to good management of working capital. The Q3 performance was in line with our expectations, and based on the business performance after nine months, we maintain our organic growth and EBIT margin guidance for the full year and increase the free cash flow before acquisitions and special items, although macroeconomic and end-market uncertainty persist due to COVID-19.

“We also completed an acquisition in Q3, and signed another early in Q4. HSO Health Care and UAS Laboratories represent important investments in our microbial platform, and we expect to continue to extend our platform through a disciplined acquisition strategy. 

"As part of the strategic review, the Board of Directors and the Executive Board have considered the portfolio of Chr. Hansen, and given that Natural Colors does not share the microbial and fermentation technology platforms, strategic options for the future of Natural Colors will be explored, including a potential sale of the business. We also announce August 25 as the new date for our virtual Capital Markets Day, where we will present all the results of the on-going strategy review.”

OUTLOOK FOR 2019/20

July 2, 2020 April 16, 2020
Organic revenue growth 4-6% 4-6%
EBIT margin before special items Around 29.5% Around 29.5%
Free cash flow before acquisitions, divestments and special items Above EUR 200 million Around EUR 190 million



科 汉森是一家全球性且具备差异化的生物科技公司,为食品行业、营养行业、制药行业和畜牧业开发天然原料的解决方案。 在科 汉森,我们拥有独特的优势,可通过微生物解决方案推动积极的变革。 在过去超过 145 年的时间里,我们致力于实现可持续的农业、更好的食品以及让全世界更多的人过上更健康的生活。 我们的微生物和发酵技术平台拥有改变规则的潜力,库存广泛且价值重大,包括约 40,000 种微生物菌株。 除了适应客户需求和全球趋势外,我们还将挖掘释放有益菌的力量,以应对食物浪费、全球健康以及抗生素和杀虫剂滥用等全球挑战。 作为全世界最具可持续性的生物技术公司,我们每天影响超过 10 亿人的生活。 受我们的创新传统与对前沿科学的求知驱动,公司宗旨“To grow a better world. Naturally.”体现在我们的所有工作中。

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