Chr. Hansen maintains full-year outlook after ‘solid’ Q1

21-Jan-2015 - Last updated on 22-Jan-2015 at 08:32 GMT

Danish ingredients supplier Chr. Hansen have reported good growth in Q1, with the firm set to hit targets for full year.

Related tags Organic growth Revenue

Strong growth in health and nutrition, coupled with increasing demand for cultures and enzymes in Europe and the Americas has led Chr. Hansen to a ‘solid’ performance in Q1, says the firm.

The Danish ingredients company reported revenues up by 9.8% over the same period last year, to €188.1 million.

CEO, Cees de Jong commented that the groups Cultures & Enzymes Division, which reported 7% organic growth, performed ‘in line with’ long-term expectations while its Health & Nutrition Division delivered ‘very strong growth’ of 29% over the same period last year - albeit on weak comparables.

At 4% organic growth, the Natural Colours Division grew below expectation, he said.

Despite the company suggesting ‘solid’ results, Chr. Hansen's operating profit for the first quarter (€43.5m) came in weaker than analysts had expected, according to a Reuters survey, which had predicted earnings before interest and tax (EBIT) before special items to hit €49.2m

Gross profit was reported to be up 7%, to €96m within the group, however the Danish company witnessed a slip in gross margins over the same period, with a fall of 1.2% to 51.2%. The fall in gross margin was primarily driven by unfavourable product mix and higher indirect production costs in the Cultures & Enzymes Division and higher raw material prices in the Natural Colours Division, said Chr. Hansen in its interim statement.

Looking ahead to the full year, the group kept its full-year forecast for organic revenue growth of between 7% and 9% percent and an EBIT margin before special items above 26.5%.

Divisional breakdown

Chr. Hansen said that the 7% growth in revenue witnessed in its biggest division, Cultures & Enzymes, was mainly driven by strong growth in cheese cultures and enzymes – adding that fermented milk and meat cultures showed good growth while revenue from probiotic cultures was lower than in Q1.

Meanwhile, revenue in its Health & Nutrition Division increased by 35% to €32m, corresponding to organic growth of 29%, said the firm – explaining that growth in human health was primarily driven by dietary supplements in the EMEA and Americas regions, and by cultures for infant formula in APAC.

For Natural Colours, the firm saw revenues increase below expectations, increasing by 3% to €38m. Strong growth was seen for its FruitMax range of colouring foodstuffs, while carmine products also delivered. Revenue from anthocyanin products was lower than the same period last year as products “experienced a decline in sales within the beverage industry segment in both the EMEA and APAC regions.”

Regional differences

Regional splits in revenue saw Europe, Middle East and Africa (EMEA) and the Americas region outpace Asia-Pacific (APAC) in terms of growth, with EMEA reporting 8% increases in revenue (10% organic growth), Americas seeing a 13% rise in revenues (10% organic growth) and APAC report an 8% increase in revenue (6% organic growth).