Chr. Hansen records a 5% organic growth for fiscal year 2019/20 driven by strong growth in enzymes

DENMARK – Chr. Hansen has published its full-year statement of results 2019/20 which shows a 5% organic growth for fiscal year 2019/20 sitting in the middle of its 4-6% guidance a revenue increase of 2 percent to €1.189 billion (US$1.4 billion).

According to the company, the organic growth was primarily driven by strong growth in enzymes and continued solid growth in core categories such as cheese and meat cultures, and good growth in fermented milk.

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In enzymes, growth was driven by the launch of CHY-MAX Supreme and by the continued growth of the NOLA Fit lactase enzyme. Probiotics declined, primarily due to lower volumes in China.

CEO Mauricio Graber said that organic growth accelerated in Q4, driven by Health & Nutrition which delivered impressive 18% growth.

Chr. Hansen estimates the end markets for fermented milk were roughly flat in 2019/20, as the impacts of COVID-19 led to reduced output in China, the largest yogurt market in the world, from February through August. Among the remaining markets, Europe is estimated to have edged up, while the other regions declined slightly.

The company also recorded earnings before interest and taxes (EBTI) of 30% for the full year and at 34.3% in Q4. Its free cash flow also developed strongly but was partly due to capex investments that were delayed during the second half of the year due to COVID-19.

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Global production of cheese is estimated to have grown by around 1 percent in 2019/20, broadly driven by all regions. Globally, pricing structures slightly favored cheese production over available alternatives such as milk powders.

In Health and Nutrition, organic growth was 9 percent, and a negative currency impact of 1 percent was offset by an acquisition impact from HSO Health Care, corresponding to a revenue increase of 9 percent to €277 million (US$326m), driven by volume/mix.

The Human Health and Animal Health divisions were also reported to deliver solid growth, while Plant Health declined due to the timing of orders and lower-than-expected sales for soy crops in Latin America.

The solid growth in Human Health consisted of strong growth in dietary supplements, while infant formula declined slightly, primarily due to very strong developments last year.

The overall market for human probiotics is estimated to have grown by 5 to 7 percent, with COVID-19 creating extraordinary demand in the second half of the year, especially in dietary supplements.

Market growth in the North American and Asian markets is estimated to have been above 10 percent driven by e-commerce platforms, whereas the European market is estimated to be in a small decline due to COVID-19 lockdowns during the year prevented consumers from going to pharmacies, especially in key markets in Southern Europe, notes the company.

The full-year statement also coincides with the former head of fermentation at the sought-after Noma restaurant in Copenhagen, David Zilber, joining forces with Chr Hansen.

The new partnership sets out to democratize fermentation and create new solutions for a climate-friendly food system.

For the past five years, Zilber worked at Noma, which was voted as the best restaurant in the world several times over the last decade. Recently, he decided it was time for a new challenge, and given Chr. Hansen’s obvious fermentation expertise and strong sustainability profile, Zilber says it was a logical next career step.

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