Chr. Hansen Results Boosted by Health & Nutrition and Natural Colors
09 Apr 2015 --- Chr. Hansen has reported strong organic revenue growth of 11% in the first half of 2014/15: Cultures & Enzymes Division (8% organic growth), Health & Nutrition Division (24%) and Natural Colors Division (8%). EBIT before special items increased by 9% to EUR 96 million.
Speaking to FoodIngredientsFirst, Christian Barker, executive vice president, Health & Nutrition Division, said: "The strong H1 growth was driven by strong momentum in all of the three areas in the Health & Nutrition Division (Human Health, Animal Health, Plant Health).
"Human Health grew strongly propelled by underlying growth in demand for dietary supplements containing probiotics, as well as new products launched by Chr. Hansen customers.
"Animal Health growth was primarily driven by strong growth in Americas, in part because of inventory buildup by a major customer. The customer belongs to the same conglomerate as our main competitor and has decided to insource production of silage inoculants effective from Q3 2014/15. As a consequence we expect to see growth rates declining significantly during the remainder of the fiscal year and but maintain our guidance of above 10% organic growth for FY 2014/15."
For the future, Barker explains that the company will be investing in both near and long-term growth. "There is continued upside from deepening the penetration of existing solutions, but we also invest behind developing new solutions, for example in plant health & protection and next generation probiotics for human health."
During the first half of 2014/15, Chr. Hansen was positively impacted by the strengthening USD, while the negative impact from inflation, especially in Russia and Ukraine, was offset by using EUR-based pricing.
“I’m pleased with our performance in the first half of 2014/15 with strong growth in both microbial-based divisions. It’s also promising to see the higher growth in the Natural Colors Division during Q2. The Nature’s No. 1 strategy continues to guide the direction for the company, and we've seen good progress within our strategic initiatives,” says CEO Cees de Jong.
“We continue to invest in innovation and capacity to drive the future growth of the company. Our free cash flow generation remains strong and, consequently, it is our intention to pay out an interim dividend totaling EUR 115 million in connection with the release of our interim report for Q3 2014/15.”
“We reiterate our expectations for 2014/15 of organic revenue growth of 7-9% and an EBIT margin before special items above 26.5%.”
The outlook for the Chr. Hansen Group for 2014/15 is unchanged compared to the announcements of 22 October 2014 and 21 January 2015, whereas the outlook for the divisions has been further specified.
