Strong execution by the organization drives solid Q3 results
Statement by CEO Mauricio Graber: “The solid results for Q3 prove the strength of the Chr. Hansen organization which continues to deliver first-class products and innovative solutions to customers around the world, while the process with Novozymes to complete the proposed merger is progressing. Organic growth came in at 9%, driven mainly by pricing initiatives. EBIT b.s.i. increased by 9% despite higher input costs and a less favorable product mix, leading to an EBIT margin b.s.i. of 27.5%. In light of the solid performance for the first nine months of the financial year, we adjust our outlook for 2022/23 for organic growth to 9-11%, while maintaining the outlook for the EBIT margin b.s.i. of 26-27%. The outlook for the free cash flow b.a.s.i. is adjusted to EUR 200-230 million.
Together with Novozymes, we continue the regulatory approval process with closing expected in the fourth quarter of the 2023 calendar year or the first quarter of the 2024 calendar year.”
Q3 2022/23 highlights
- Revenue amounted to EUR 335 million, up 5% from EUR 318 million in Q3 2021/22. Year-to-date revenue amounted to EUR 982 million, up 10% from last year.
- Organic growth was 9%, driven by pricing. Organic growth was 10% in Food Cultures & Enzymes and 7% in Health & Nutrition. The Lighthouses delivered 15% organic growth combined in Q3, while the core businesses delivered 8% organic growth. Year-to-date Group organic growth was 10%. The Lighthouses delivered 19% organic growth for the year to date, while the core businesses delivered 9% organic growth.
- EBIT b.s.i. amounted to EUR 92 million, up 9% from EUR 85 million in Q3 2021/22. The increase was driven by a positive contribution from pricing initiatives, volume growth, and stable operating expenses which was partly offset by a negative impact from higher input costs and exchange rates. Year-to-date EBIT b.s.i. amounted to EUR 260 million, up 11% from last year.
- The EBIT margin b.s.i. was 27.5%, up from 26.7% in Q3 2021/22. The increase was driven by the strong sales development and scalability effects which were partly offset by a negative impact from higher input costs, a change in product mix, and exchange rates. The year-to-date EBIT margin b.s.i. was 26.4%, compared to 26.3% last year.
- Free cash flow b.a.s.i. amounted to EUR 133 million for the year to date, up 15% from EUR 116 million last year, due to a higher cash flow from operating activities and a positive impact from taxes paid.
Interim dividend for the period September 1, 2022 – August 31, 2023
In connection with the merger agreement Novozymes and Chr. Hansen has agreed on certain specific restrictions in respect of distributions to their shareholders until completion of the proposed merger. As part of this it has been agreed that Chr. Hansen can make a dividend payout in respect of its earnings for the period September 1, 2022 and August 31, 2023, up to an amount corresponding to a dividend pay-out ratio of 55%.
It is the intention of the Board of Directors to announce such a dividend in connection with the 12-month report on October 12, 2023, subject to closing of the proposed merger not taking place prior to the pay-out date.
Outlook September 1, 2022 – August 31, 2023
In light of the performance for the first nine months, the outlook for organic growth is adjusted, while the outlook for EBIT margin b.s.i. is maintained. The outlook for the free cash flow b.a.s.i. is adjusted to reflect a change in phasing of operational investing activities and a positive impact from lower taxes paid.
July 6, 2023
April 13, 2023
Organic revenue growth
EBIT margin b.s.i.
Free cash flow b.a.s.i.
The outlook for 2022/23 is based on actual exchange rates until July 5, 2023, and for the remainder of the financial year 2022/23 assuming constant exchange rates at the current level of EUR/USD rate of 1.09 versus 1.10 at the time of the most recent 2022/23 outlook, provided on April 13, 2023. The impact from exchange rates on revenue and EBIT b.s.i. is expected to be neutral, in line with the most recent outlook. For further details on the outlook for 2022/23 and supporting outlook for the calendar year 2023, please refer to page 9.
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