Chr. Hansen Reports 9 Percent Organic Growth in Q2, Maintains Outlook
06 Apr 2017 --- Chr. Hansen, the world’s largest developer and manufacturer of solutions based on beneficial bacteria, has reported 9 percent organic revenue growth during the second quarter of 2016/2017, with strong organic revenue growth of 10 percent in the first half overall.
The company’s Q2 2016/2017 results showed a revenue of €259 million, compared to €229 million in Q2 2015/2016, corresponding to organic growth of 9 percent. The Food Cultures & Enzymes part of the business showed 8 percent organic growth, while the sections Health & Nutrition and Natural Colors showed organic growth of 13 percent and 9 percent, respectively.
Meanwhile, the company reported an EBIT before special items of €70 million, compared to €64 million in the second quarter of 2015/2016. The EBIT margin before special items was 27.0 percent, compared to 27.9 percent in Q2 2015/2016.
Profit for the Q2 2016/2017 period was €51 million, compared to €37 million in Q2 2015/2016, while free cash flow before special items and acquisitions was reported at €49 million compared to €33 million in Q2 2015/2016.
Chr. Hansen’s outlook for 2016/2017 remained unchanged compared to the announcement of 11 January 2017.
“With this solid performance in the first half year, we are well positioned to deliver on our ambitions for the year. Both Food Cultures & Enzymes and Natural Colors delivered strong organic growth and improved profitability. In Food Cultures & Enzymes, the improvement in profitability was despite the financial impact from a management change in Q2. With 13 percent organic growth in Q2, Health & Nutrition is now delivering growth in line with our long-term ambitions for this business area. However, the EBIT margin in Health & Nutrition is still below the level of last year, partly due to continued investments in R&D,” Chr. Hansen CEO Cees de Jong said.
“We are pleased with the progress of our long term growth initiatives and especially with the continued strong growth and momentum in bioprotection, the further penetration and development of plant health solutions and technological progress in the human microbiome. NPC has now been fully integrated, and the integration of LGG is on plan,” de Jong added.
NutritionInsight’s Hannah Gardiner caught up with Christian Barker, the Executive Vice President of Health & Nutrition at Chr. Hansen last week.
During this interview, Baker said the company has “had organic sustained growth for many years now in the 8 to 10 percent range, and we expect to continue growth in that ballpark as we look ahead.”
The biggest business area for Chr. Hansen is cultures and enzymes for food production, but Barker explained how innovations and potential in the Health and Nutrition part of the company also look set to contribute nicely to the company’s overall growth.
“The dietary supplements and probiotics sector is a high growth market,” Barker said, adding that “most sources you look at say it is growing at 7 to 9 percent globally, but it’s growing even faster in some parts of the world, and probiotics is now one of the biggest dietary supplement categories in some markets.”
He explained that growth is a result of big players building brands that drive the category, but also mentioned how the continued scientific insights about what bacteria can do for health is also reaching more consumers than ever.
“This is making its way into TV programs, newspaper articles and social media, and has trickled down into general consumer awareness,” Barker said. “There have been many breakthroughs now in science that demonstrate the importance of beneficial bacteria in maintaining good health or good productivity, whether it’s in humans, livestock productions or agriculture.”
Read the full interview here.
