Strong start to 2015/16: 14% organic revenue growth in Q1

“We experienced a strong start to 2015/16 and 14% organic revenue growth in Q1 underlines our unique position in markets within microbial and natural color solutions with attractive growth opportunities. We continue to implement our Nature’s No. 1 strategy, and I’m very pleased with the progress. We have signed an agreement to acquire Nutrition Physiology Company, which expands our current activities in animal health, and we have entered into our first commercial partnership in the human microbiome initiative,” says CEO Cees de Jong.

“In the first quarter of our current financial year, our profitability increased, not least due to the positive impact from the scalability of our production platform in cultures and enzymes. As a result, the EBIT margin before special items increased by 2 percentage points to 25.2% in Q1 2015/16.”

“Based on the strong start of the year, we now expect organic revenue growth of 9-11% while the EBIT margin before special items is still expected to be above the 27.1% achieved in 2014/15.”

2015/16 in brief

Q1 2015/16 results

• Revenue of EUR 214 million, compared to EUR 188 million in 2014/15, corresponding to organic growth of 14%

• EBIT before special items of EUR 54 million,compared to EUR 44 million in 2014/15, an increase of 24%. The EBIT margin before special items was 25.2%, compared to 23.1% in 2014/15

• Income taxes of EUR 13 million, equivalent to an effective tax rate of 25%, compared to 26% in 2014/15

• Profit for the period of EUR 39 million, compared to EUR 30 million in 2014/15, an increase of 31%

• Negative free cash flow of EUR 17 million, compared to a negative EUR 30 million in 2014/15

• Net interest-bearing debt of EUR 513 million, or 1.7x EBITDA, compared to EUR 432 million, or 1.7x EBITDA, at 30 November 2014.

Nature’s No. 1 progress

• On 13 January 2016, Chr. Hansen announced the agreement to acquire Nutrition Physiology Company (NPC) for a cash consideration reflecting an enterprise value of USD 185 million, and a EV/EBITDA multiple of 15.9x based on full-year 2016 estimates before synergies. The details of the agreement are described in announcement 1/2016 of 13 January 2016

• Chr. Hansen continues to discuss potential partnerships with various companies within the human microbiome initiative, and has signed an agreement with Caelus Pharmaceuticals to develop a production process and pilot material for clinical trials to explore the use of Eubacterium hallii for prevention and treatment of metabolic disease

• Chr. Hansen will hold a Capital Market Day on 12 April 2016 in Copenhagen. The agenda of the day is to provide an update on the Nature’s No. 1 strategy.

OUTLOOK FOR 2015/16

The outlook for 2015/16 has been adjusted compared to the announcement of 21 October 2015. The agreement to acquire Nutrition Physiology Company is not impacting the outlook.

21 October 2015

Organic revenue growth: 8-10%

Research & development expenditures incurred (% of revenue): 6.5-7.0%

EBIT margin before special items above 2014/15: above 2014/15

Free cash flow before acquisitions and divestments: above 2014/15

14 January 2016

Organic revenue growth: 9-11% 

Research & development expenditures incurred (% of revenue):   6.5-7.0% 

EBIT margin before special items above 2014/15:  above 2014/15

Free cash flow before acquisitions and divestments:   above 2014/15

The Q1 2015/2016 report was released today, 14 January, 2016, and is available from here.