DENMARK – Chr. Hansen has reported solid organic revenue growth of 9% in the first nine months, while poor economic environment in emerging markets weighed down sales in the Natural Colors and Animal Nutrition segments.
Food Cultures & Enzymes performed in line with expectations, recording 9% growth attributed to continued innovation efforts in various categories.
Chr. Hansen CEO Mauricio Graber said the segment was well on track to deliver the scalability benefits from the ramp up of the new capacity at its Copenhagen facility, where it plans to ramp up investments.
Solid growth was seen in Health & Nutrition and Animal Health even though Natural Colors segment was offset by headwind from a poor economic environment in emerging markets.
The company has adjusted its full-year organic growth outlook from 9-11% to 7-8%.
EBIT margin before special items in the first nine months of the year increased by 0.7% and was driven by improved margins in all business areas while in Q3, organic growth was 8%, and EBIT before special items increased by 9%.
“We delivered a solid Q3 result despite more challenging trading conditions, mainly in emerging markets,” said CEO Mauricio Graber.
“Performance in Food Cultures & Enzymes continues to be in line with expectations and we are progressing well on our strategic agenda of delivering new innovative solutions to customers, so we can continue to grow solidly and profitably, even in markets with lower volume growth momentum.”
Health & Nutrition registered 11% organic growth driven by strong growth in infant formula and Plant Health.
Organic growth in Bioprotection increased to around 15% in the third quarter.
The company launched SWEETY®, a new culture that allows dairies to reduce added sugar by up to 20%.
The culture helps to address modern market trends and consumer demands for healthy food by reducing added sugar without compromising the good taste of the product.
Speaking to FoodIngredientsFirst, Søren Westh Lonning, Executive Vice President & CFO identified three main market trends driving robust growth: demand for lactose-free products; need to reduce food waste and protecting food and thirdly, rend of fermented beverages.
Looking ahead, Graber said: “Guidance for Food Cultures & Enzymes is unchanged, Health & Nutrition is now expected to grow around 10%, and Natural Colors is now expected to grow 4-5%. The guidance on EBIT margin is unchanged.
“The free cash flow before acquisitions, divestments and special items is now expected to be above last year.”
The company’s Board of Directors has proposed to pay out an extraordinary dividend totaling EUR 110 million (US$125 million).