Chr. Hansen Achieves Strong Half Year Performance
Despite the strong growth, the company still faced issues with fluctuating material costs: “Carmine colors are where we have seen the biggest rollercoaster in terms of price changes."
19 April 2012 --- With organic growth of 11% in the first half of financial year 2011/12 Chr. Hansen continues to show solid performance. Initiating a share buy-back program, Chr. Hansen distributes excess capital to its shareholders.
As a result of the solid performance in first half the organic growth, excluding effect on sales prices from change in raw material prices for carmine, is now expected to be in the range of 8-10% compared to 7-10% in the announcement on 11 January 2012. EBIT margin before special items is still expected to be above 26%.
Revenues at the company reached € 333 million, up 9% compared to the first half of 2010/11.
Speaking to FoodIngredientsFirst, Lars Frederiksen CEO of Chr. Hansen said he believes that the company is in a good position to defy recessionary pressures: “Our track record shows that we have been able to do that up until now. So I don’t see why that shouldn’t continue going forward.”
Despite the strong growth, the company still faced issues with fluctuating material costs: “Carmine colors are where we have seen the biggest rollercoaster in terms of price changes. Last year they increased from around $20 a kilo to $120, now they are going back down again. I think we have been able to manage these pressures quite well, despite all the ups and downs.”
When asked about the recent backlash against carmine/cochineal products in the US, he said he was confident that this would not affect Chr. Hansen: “I think consumers continue to be very happy about having natural colors as an alternative to synthetic colors; that bears out in consumer research trends.”
Frederiksen believes that the growth will continue throughout the year and that the company will continue to seek new innovations and product launches.
When asked what products would be the drivers for the year going forward he forecast that things would go well across all three divisions of the company: “Probiotics, health and nutrition is growing very nicely at 15 percent. Cultures and enzymes are growing by 9%. Colors other than carmine are growing by 20%; carmine is seeing a decrease of 3%, due to prices going down. What we are looking to achieve for the full year is growth somewhere between 8-10 percent, I believe we are on target to meet that aim.”
As a result of Chr. Hansen’s strong cash generation the Board of Directors has decided to initiate a share buy-back program of up to EUR 80 million with the purpose to adjust our capital structure by distributing excess capital to the shareholders," says Lars Frederiksen.
Highlights were:
• Revenue EUR 333 million, up 9% compared to first half 2010/11.
• Organic growth 11% (adjusted for change in sales prices to reflect changes in raw material
prices for carmine).
• EBIT EUR 83 million, up 19% compared to first half 2010/11. EBIT margin before special items 25% compared to 23% in first half last year.
• Q2 2011/12 revenue EUR 165 million, up 7% compared to Q2 last year. Organic growth 9%
(adjusted for change in sales prices to changes in raw material prices for carmine). Operating
profit (EBIT) margin reached 25% compared to 23% in Q2 last year.
By Michael Holt
