Chr. Hansen “Stronger Than Expected” in Q3 with Nutrition Showing Robust Growth

05 Jul 2017 --- Danish food ingredients giant Chr. Hansen has seen strong organic revenue growth of 10 percent in the first nine months of 2016/17 and thanks to the robust performance has announced the payment of an interim dividend. Based on the company’s strong performance, it has narrowed its organic revenue expectations for 2016/17 to between 9 and 10 percent from previously 8 to 10 percent.

“We continue to grow our business with Food Cultures & Enzymes and Health & Nutrition performing slightly better than expected,” says CEO Cees de Jong.
 
“Both Food Cultures & Enzymes and Natural Colors delivered further improvements in profitability, while Health & Nutrition showed a solid margin progression in Q3.”
 
The company reports a 12 percent organic growth for health and nutrition for YTD 2016/17 and a 14 percent growth over the third quarter. 
 
Jong adds how the company is on track to expand dairy culture in the Danish capital and gives a nod to Chr. Hansen’s human microbiome work. 
 
“The capacity expansion for dairy cultures in Copenhagen is on track, and we are preparing for the final implementation later this year,” he says.

“It is exciting to see that we are making solid progress in the area of the human microbiome, where we have recently expanded our strain library with lead candidates targeting gastrointestinal, immune and metabolic health. Adding these novel bacterial strains to our portfolio is a major milestone in developing the next-generation probiotics.”

“Given the strong operational performance and free cash flow generation, we have decided to declare an interim dividend totaling €100 million (DKK 5.64 per share). The interim dividend will be paid out on 13 July 2017.”
 
YDT 2016/17 Results
 Revenue was €780 million, compared to €693 million in 2015/16, Food Cultures & Enzymes showed a 9 percent organic growth, while Natural Colors had a 9 percent organic growth.

EBIT before special items was €217 million, compared to €189 million in 2015/16. The EBIT margin before special items was 27.9 percent, compared to 27.2 percent in 2015/16.

Profit for the period was €156 million, compared to €128 million in 2015/16, and free cash flow before special items and acquisitions of €98 million, compared to €58 million in 2015/16.

Q3 2016/17 Results
Revenue of €278 million, compared to €250 million in Q3 2015/16. Food Cultures & Enzymes showed 10 percent organic growth, while Health & Nutrition showed 14 percent organic growth and Natural Colors 6 percent organic growth.

EBIT before special items of €82 million, compared to €71 million in Q3 2015/16. The EBIT margin before special items was 29.3 percent, compared to 28.4 percent in Q3 2015/16.

Profit for the period of €58 million, compared to €52 million in Q3 2015/16.

Free cash flow before special items and acquisitions of €68 million compared to €42 million in Q3 2015/16.
 
The outlook for 2016/17 has been narrowed to the upper end of the range compared to the company’s previous announcement in April.