Chr. Hansen raises future financial outlook after raking in stable figures

07 Jul 2023 --- Bioscience company Chr. Hansen has adjusted its organic growth financial outlook upwards of 9-11%, following a healthy performance for the year’s first three quarters. Revenue amounted to €335 million (US$365 million), up 5% from €318 million (US$346 million) the previous financial year.

The significant transaction of the financial year involves the merger with Novozymes, in which the companies have agreed on certain specific restrictions regarding distributions to their shareholders until the completion of the proposed merger.

As part of this, it has been agreed that Chr. Hansen can make a dividend payout from its earnings from 1 September 2022 and 31 August 2023 up to an amount corresponding to a dividend payout ratio of 55%.

Food cultures and enzymes portfolios multiply
The company’s organic growth of 9% was driven by price increases. Organic growth was 10% in food cultures and enzymes and 7% in health and nutrition. Year-to-date revenue amounted to €982 million (US$1.07 billion), up 10% from last year.

Chr.Hansen’s outlook for free cash flow is adjusted to €200-230 million (US$218-250 million).Chr. Hansen must make a dividend payout from its earning in a 55% ratio concerning the merger with Novozymes. 

The earnings before interest and taxes (EBIT) margin maintains an outlook of around 27%. EBIT increased by 9% despite higher input costs and a less favorable product mix. EBIT amounted to €92 million (US$100 million), up 9% from €85 million (US$93 million). The margin was driven by strong sales development and scalability effects. 

The EBIT increase resulted from a positive contribution from pricing initiatives, volume growth and stable operating expenses. 

Flow of cash
The free cash flow increased by about 15% from €116 million (US$126 million) last year to €133 million (US$137 million) this year. The increase was because of higher cash flow from operating activities and a positive impact from taxes paid.

The impact of exchange rates on revenue and EBIT is expected to be neutral, in line with the most recent outlook. 

Chr. Hansen ended the first half of its financial year with 11% organic growth driven by volume and price increases. Its “lighthouses,” strategic business areas with a minimum revenue potential of €100 million (US$97.2 million), delivered 38% growth in Q2 “positively impacted by the timing of orders.”

The company also received regulatory approvals for human milk oligosaccharides for infant formula from authorities across the EU, US, Canada and Israel. The developments pave the way for more global market entries and higher usage levels.

By Inga de Jong