Press release -
Another successful year for Chr. Hansen: 9% organic growth in 2017/18
Based on good progress in strategic focus areas, Chr. Hansen raises ambitions to 9-11% organic growth next year
Chr. Hansen achieved strong results in 2017/18, and growth is set to continue in 2018/19.
CEO Mauricio Graber says: “2017/18 was another good year for Chr. Hansen, and we finished strongly in Q4 driven by Food Cultures & Enzymes and Health & Nutrition. We achieved all the overall financial targets that we set at the beginning of the year, in spite of currency headwinds impacting both revenues and earnings, with organic growth reaching 9%, EBIT margin before special items increasing to 29.2%, and free cash flow before special items and acquisitions increasing by 4% to EUR 196 million. For the full year, Food Cultures & Enzymes delivered strong growth organic of 12%, performing well above the long-term ambition of growing 7-8% per year, while Health & Nutrition and Natural Colors delivered moderate growth and grew by 8% and 5%, respectively.
2017/18 was also a good year from a strategic perspective: We updated our strategy to become Nature’s no. 1 Sustainably and set a new financial ambition to take us to 2021/22. We reconfirmed that the products behind 82% of our revenues directly support three of the 17 UN Sustainability Development Goals. We began utilizing our new fermentation capacity in Copenhagen, which is the largest and most modern culture production plant in the world. Our three lighthouse projects each showed great progress through the year. Revenue in bioprotection grew around 35% and with the second-generation products showing impressive early progress.
Plant Health also had good results, with very good traction of the newly launched products, Quartzo® and Presence® in Brazil. Human Microbiome saw exciting developments in two key projects – a partnership with Prota Therapeutics on peanut allergy and a discovery of the potential to use a probiotic to treat side-effects from regular consumption of acetylsalicylic acid, the active ingredient in aspirin.
The key focus for Chr. Hansen in 2018/19 will be to continue to execute the Nature’s no. 1 Sustainably strategy and to bring strong organic growth through innovation.”
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2017/18 in brief Organic growth was 9%, and adjusting for a negative currency impact of 6%, corresponded to a revenue increase of 3% to EUR 1,097 million. Food Cultures & Enzymes: 12% organic growth Health & Nutrition: 8% organic growth Natural Colors: 5% organic growth EBIT before special items increased by 4% to EUR 320 million (incl. a significant negative impact from currencies), compared to EUR 307 million in 2016/17. The EBIT margin before special items was 29.2%, compared to 28.9% in 2016/17. Profit for the year increased by 2% to EUR 228 million, compared to EUR 224 million in 2016/17. Free cash flow before special items and acquisitions was EUR 196 million, compared to EUR 188 million in 2016/17. |
Q4 2017/18 in brief Organic growth was 10%, and adjusting for a negative currency impact of 5%, corresponded to a revenue increase of 5% to EUR 297 million.
EBIT before special items increased by 12% to EUR 100 million, compared to EUR 90 million in Q4 2016/17. The EBIT margin before special items was 33.8%, compared to 31.8% in Q4 2016/17. Profit for the period increased by 3% to EUR 70 million (incl. a significant negative impact from unrealized currency losses), compared to EUR 68 million in Q4 2016/17. Free cash flow before special items and acquisitions was EUR 121 million, compared to EUR 90 million in Q4 2016/17. |
Dividend
An ordinary dividend for 2017/18 of EUR 0.87 (DKK 6.47) per share, or a total of EUR 114 million, is proposed. The proposed ordinary dividend is equivalent to 50% of the profit for the year. The Board of Directors will consider the options for distributing any excess cash during 2018/19, while maintaining financial leverage consistent with a solid investment-grade credit profile.
Outlook for 2018/19
| Organic revenue growth | 9-11% |
| EBIT margin before special items | Around 29.5% |
| Free cash flow before special items, acquisitions and divestments | Around the EUR 196 million achieved in 2017/18 |
Topics
Chr. Hansen is a leading, global bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries. We develop and produce cultures, enzymes, probiotics and natural colors for a rich variety of foods, confectionery, beverages, dietary supplements and even animal feed and plant protection. Our product innovation is based on more than 30,000 microbial strains – we like to refer to them as ‘good bacteria’. Our solutions enable food manufacturers to produce more with less – while also reducing the use of chemicals and other synthetic additives – which make our products highly relevant in today’s world. We have been delivering value to our partners – and, ultimately, end consumers worldwide – for over 140 years. We are proud that more than one billion people consume products containing our natural ingredients every day. Revenue in the 2017/18 financial year was EUR 1,097million. Chr. Hansen was founded in 1874 and is listed on Nasdaq Copenhagen.
