Company announcement no. 05/2022
July 7, 2022
Solid Q3 in an uncertain macroeconomic environment
Statement from CEO Mauricio Graber: “The execution of our differentiation strategy as a specialized microbial and fermentation technology business continued to deliver strong results with organic growth of 9% for the third quarter of 2021/22, representing growth of 13% in euros. Our inflation-focused pricing actions started to make a positive contribution in the third quarter, while volume growth slowed as expected after strong growth in the first half. Based on the quarter’s performance, we are reducing our organic revenue growth target for 2021/22 to 8-10%. The delayed impact of pricing, combined with continued inflationary pressure and protective measures in our supply chain, had a negative impact on our EBIT bsi margin. However, at 26.3% for the first nine months, we remain on track to meet our guidance. »
Highlights of the third quarter 2021/22
- Revenue was €318 million, up 13% from €281 million in Q3 2020/21. Year-to-date revenue was 890 million, up 14% year-on-year.
- Organic growth was 9% in Q3 2021/22, mainly driven by volume growth. Flagships (Bioprotection, Fermented Plant Bases, Plant Health and HMO) achieved combined organic growth of 29% in Q3, while the other core businesses achieved organic growth of 7%. Since the beginning of the year, the Group’s organic growth has been 11%.
- Food Cultures & Enzymes organic growth was 6%, mainly driven by volumes, but with an increasing price impact. Since the start of the year, organic growth has been 7%.
- Health & Nutrition organic growth was 13% driven by volumes. Since the start of the year, organic growth has been 17%.
- EBIT bsi was €85 million, up 3% from €82 million in Q3 2020/21. The increase was driven by strong sales performance in Health & Nutrition, while EBIT bsi in Food Cultures & Enzymes decreased mainly due to the negative impact of higher input costs, higher cost levels to mitigate supply chain challenges, an equal amount donation to benefit Chr. Hansen LLC, Russia, and non-recurring costs related to a change in organization. Since the beginning of the year, EBIT bsi amounts to 234 million euros, up 10% compared to last year.
- bsi EBIT margin was 26.7%, compared to 29.3% in Q3 2020/21. The lower margin was due to higher input costs, increased cost levels to mitigate supply chain challenges, a general ramp up of business, donating an amount equal to the profit of chr. Hansen LLC, Russia and non-recurring costs related to a change in organization. This was partially offset by efficiencies in production, positive currency contribution and pricing initiatives. The bsi year-to-date EBIT margin was 26.3%, compared to 27.3% last year.
- Free cash flow was €116 million year-to-date, compared to €120 million last year, as cash flow from operating activities was impacted by the increase in taxes paid.
Due to the first nine months performance, we are reducing the range of organic revenue growth outlook for 2021/22 while maintaining the bsi EBIT margin and bsi free cash flow outlook from the guidance provided on April 6, 2022 .
- Organic growth is expected in a range of 8 to 10% (previously 7 to 11%).
- EBIT margin before special items should be 26-27% (unchanged).
- Free cash flow before exceptional items should be around 140 to 170 million euros (unchanged).
See attachment for full third quarter 2021/22 interim report.
For more information, please contact:
Anders Mohr Christensen
Group VP Strategy & Investor Relations
Mobile: +45 25 15 23 64
About Chr. Hansen
chr. Hansen is a differentiated global bioscience company that develops natural ingredient solutions for the food, nutritional, pharmaceutical and agricultural industries. At Chr. Hansen, we are uniquely positioned to drive positive change through microbial solutions. We’ve worked for over 145 years to enable sustainable agriculture, better food and healthier lives for more people around the world. Our microbial and fermentation technology platforms, including our extensive relevant collection of approximately 40,000 microbial strains, have game-changing potential. Aligned with customer needs and global trends, we continue to unleash the power of good bacteria to address global challenges such as food waste, global health, and overuse of antibiotics and pesticides. As the world’s most sustainable biotechnology company, we touch the lives of more than a billion people every day. Driven by our heritage of innovation and curiosity for pioneering science, our purpose – Building a better world. Naturally. – is at the heart of everything we do.
chr. Hansen Q3 2021 Interim Report_22