Q3 Brings Strong Overall Growth For Chr. Hansen, But Health & Nutrition Sector Slow

05 Jul 2016 --- Chr. Hansen release their Q3 figures, revealing an anticipated growth of 13% in the first nine months of 2015/16, but show disappointing results in the health and nutrition sector of business.

Overall results fared as anticipated in the third quarter, showing strong organic revenue growth of 13% in the first nine months of 2015/16. The Natural Colors side of the business performed best, revealing a growth of 20%, and the Food Cultures & Enzymes matched the overall business growth of 13%.

CEO Cees de Jong says: “We continued to grow our business during Q3, with Food Cultures & Enzymes and Natural Colors showing strong organic revenue growth. Both Food Cultures & Enzymes and Natural Colors also delivered encouraging improvements in profitability.”

However, the Health & Nutrition section of the business performed significantly lower, growing by only 2%.

“We experienced modest growth in Health & Nutrition, as the animal health business was negatively impacted by commodity prices for milk and meat remaining at extraordinarily low levels,” explains Cees de Jong, “Despite the current pressure on the agricultural sector, the long-term growth prospects for our animal health business remain very positive.”

Christian Barker, EVP Health and Nutrition at Chr. Hansen told FoodIngredientsFirst: “Health and Nutrition growth is expected to remain modest in Q4 given the challenging market conditions in Animal Health and the timing of orders in Human Health. While it is difficult to predict how quickly the market conditions in Animal Health rebound, we expect growth in Health & Nutrition to increase next year and the long term guidance for the business unit is unchanged.”

Commenting on the future of the animal health business, Barker remarked: “The fundamentals all point towards attractive long term growth prospects. The agricultural sector needs to find ways to further improve productivity and at the same time reduce the current excessive use of antibiotics in food production – and microbial solutions are more relevant than ever in this context. We also will be introducing new products that will further increase our differentiation.”

Chr. Hansen’s overall business growth, almost doubling the 7% growth recorded in the same period last year, is certainly positive news for the company, and progress made over the last 3 months indicate even more future success for the company.

Cees de Jong explains: “During the past three months, we have made good progress with integrating NPC, launched a second product for plant health with good first sales, and, within the human microbiome area, successfully completed a clinical study showing a positive physiological effect of the bacteria tested.” Cees de Jong adds, “Based on the results achieved, we have moved to the next stage in our clinical development plan. Finally, it is very encouraging to see a strong performance by our bioprotective solutions for dairy and other food categories.”

Chr. Hansen maintains its expectations for full-year organic revenue growth of around 10-12 per cent.

by Hannah Gardiner