Chr. Hansen H1 Profit Dips on Impairment After Probiotic Health Claim Concerns
10 Apr 2013 --- With organic growth of 9% in the first half of the financial year 2012/13, Chr. Hansen delivered a strong interim result, with organic revenue growth of 9% (excluding carmine price effect) in the first half of 2012/13. Preliminary analysis of two clinical studies relating to gastrointestinal health has been finalized.
Despite indications of positive results the studies’ primary end points were not met and consequently the data is assessed to be insufficient for approval of an EU health claim. Therefore impairment of capitalized development costs of EUR 8 million has been made in Q2.
“Operating profit (EBIT) margin before impairment was at 25.0% at the same level as last year. We remain committed to achieve improved profit margins through scalability and our outlook for 2012/13 is unchanged. We expect organic revenue growth between 8-10% (excluding carmine price effect) and an EBIT margin before special items and impairments above 2011/12,” says recently appointed CEO Cees de Jong.
Highlights for the first half of 2012/13 were revenue of EUR 353 million, up 6% compared to the first half of 2011/12, with organic growth of 6% (9% excluding carmine price effect). EBIT of EUR 80 million was down 3% compared to the first half of 2011/12. EBIT margin of 22.7% compared to 25.0% last year. The EBIT margin before impairment reached 25.0% which is unchanged from last year.
Q2 2012/13 revenue was EUR 174 million, up 6% compared to Q2 last year. Organic growth was 8% (10% excluding carmine price effect). The EBIT margin of 18.7% compared to 25.4% in Q2 last year. The EBIT margin before impairment was 23.3%.
The outlook for 2012/13 is unchanged compared to the announcement of 16 January 2013. Organic revenue growth, excluding effect on sales prices from change in raw material prices for carmine, is expected to be in the range of 8-10% while organic revenue growth, including the effect from change in raw material prices for carmine, is expected to be in the range of 7-9%. The EBIT margin before special items and impairments is expected to be above last year. Free cash flow before acquisitions and divestments is expected to be at the same level as in 2011/12.
