Chr. Hansen Q1 results show 13% revenue growth

By Jim Cornall contact

- Last updated on GMT

Danish-based global bioscience company Chr. Hansen has announced its 1Q financial statement, showing revenue grew by 13% year-on-year.
Danish-based global bioscience company Chr. Hansen has announced its 1Q financial statement, showing revenue grew by 13% year-on-year.

Related tags: Organic growth, Middle east, Nutrition, Hansen, Africa

Danish company Chr. Hansen has issued its Q1 financial statement for the quarter ending November 30, 2016.

Revenue grew by 13% year-on-year to €241.7m ($256.8m), and EBITDA before special items was €79.5m ($84.8m).

“The results in Q1 gave us a good start to the year,” ​CEO Cees de Jong said.

Food Cultures & Enzymes, which represents 60% of the company’s revenue, and Natural Colors (21% of revenue) delivered strong organic growth, at 10% and 13% respectively, and improved profitability.

The organic growth in Health & Nutrition (19% of revenue) was below the company’s long-term ambitions, he said, but added that it was still better than expected for the quarter, mainly due to timing of orders.

“The EBIT margin for the business area was down, partly due to an unfavorable product mix​,” he noted.

He added that bioprotective cultures continue to deliver strong growth, approximately 25%, and the segment now accounts for approximately 5% of the revenue in Food Cultures & Enzymes.

Facts and figures

Profit for the quarter was €47m ($50m), compared to €39m ($41.4m) in Q1 2015/16.

Free cash flow before special items and acquisitions was -€19m (-$20.2m) compared to -€17m (-$18m) in Q1 2015/16.

Diluted earnings per share rose from €0.30 to €0.35 ($0.32 to $0.37).

The company says that its outlook for 2016/17 remains unchanged.

It anticipates organic growth of 8-10%, a slight increase in EBIT margin before special items, and free cash flow before special items, acquisitions and divestments of around €175m ($186m).

Net interest-bearing debt amounted to €645m ($685m), 1.9x EBITDA, compared to 1.7x EBITDA the previous year, which the company attributed to the acquisitions of NPC and LGG.

A company spokesperson told this site that the increase in working capital compared to Q1 last year is largely driven by higher trade receivables due to strong November sales. 

Market development

During the first three months of 2016/17, the end markets for fermented milk grew in line with previous years at around 3-4%. Asia-Pacific, the Middle East and Africa continued to drive growth.

Chr. Hansen said the market for probiotic dietary supplements showed strong growth, largely due to a higher penetration in the US.

The market for microbial-based solutions for animal health continues to be negatively impacted by commodity prices for milk, but the trend is slowly improving.

Regions

In the EMEA region (Europe, Middle East, Africa) revenue increased by 9%, with organic growth of 10%, driven by growth in fermented milk, bioprotection, animal health and natural colors.

Cheese, meat cultures and probiotics for fermented milk delivered solid growth. Enzymes saw modest growth, and revenue from human health was unchanged compared to Q1 2015/16.

In North America revenue increased by 20%, with organic growth of 7%, driven by cheese, natural colors and plant health.

The company said revenue was positively impacted by around €7m due to the acquisition of NPC.

In Latin America, revenue increased by 6%, with organic growth of 13%. The organic growth was driven by strong growth in cheese, enzymes, meat, natural colors, animal health and plant health.

Revenue increased by 18% in the Asia-Pacific region, with organic growth of 16%. This was due to growth in fermented milk including probiotics, cheese, human health and animal health. Growth in fermented milk including probiotics was mainly driven by strong growth in China.

Related topics: Manufacturers

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