Company announcement no. 05/2022
July 7, 2022
Solid Q3 in an uncertain macroeconomic environment
Statement by CEO Mauricio Graber: “The execution of our strategy to differentiate as a focused microbial and fermentation technology company continued to deliver solid results with 9% organic growth for the third quarter 2021/22, equal to 13% growth in EUR terms. Our inflation-driven pricing measures started to contribute positively during Q3, while volume growth slowed down as expected following the strong growth in the first half of the year. Based on the performance of the quarter, we narrow our organic revenue growth target for 2021/22 to 8-10%. The delayed impact from pricing combined with the continued inflationary pressure and actions to protect our supply chain had a negative impact on our EBIT margin b.s.i. However, at 26.3% for the first nine months we remain on course to deliver within our guidance.”
Q3 2021/22 highlights
Revenue amounted to EUR 318 million, up 13% from EUR 281 million in Q3 2020/21. Year-to-date revenue amounted to 890 million, up 14% from last year.
Organic growth was 9% in Q3 2021/22 mainly driven by volume growth. The Lighthouses (Bioprotection, Fermented Plant Bases, Plant Health and HMO) delivered 29% organic growth combined in Q3, while the remaining core businesses delivered 7% organic growth. Year-to-date Group organic growth was 11%.
Food Cultures & Enzymes organic growth was 6% mainly driven by volume, but with an increasing impact from pricing. Year-to-date organic growth was 7%.
Health & Nutrition organic growth was 13% driven by volume. Year-to-date organic growth was 17%.
EBIT b.s.i. amounted to EUR 85 million, up 3% from EUR 82 million in Q3 2020/21. The increase was driven by the strong sales performance in Health & Nutrition, while EBIT b.s.i. in Food Cultures & Enzymes decreased mainly due to a negative impact from higher input costs, increased cost levels to mitigate challenges in the supply chain, donation of an amount equal to the profit from Chr. Hansen LLC, Russia, and non-recurring costs related to an organizational change. Year-to-date EBIT b.s.i. amounted to EUR 234 million, up 10% from last year.
The EBIT margin b.s.i. was 26.7%, down from 29.3% in Q3 2020/21. The lower margin was due to higher input costs, increased cost levels to mitigate challenges in the supply chain, a general ramp-up of activities, the donation of an amount equal to the profit from Chr. Hansen LLC, Russia and non-recurring costs related to an organizational change. This was partly offset by production efficiencies, a positive contribution from currencies, and pricing initiatives. Year-to-date EBIT margin b.s.i. was 26.3%, compared to 27.3% last year.
Free cash flow b.a.s.i. amounted to EUR 116 million year-to-date, down from EUR 120 million last year, as the cash flow from operating activities b.a.s.i. was impacted by higher taxes paid.
As a result of the performance in the first nine months we narrow the 2021/22 outlook range for organic revenue growth while maintaining the outlook for EBIT margin b.s.i. and free cash flow b.s.i. relative to the guidance provided on April 6, 2022.
Organic growth is expected in the range of 8-10% (previously 7-11%).
EBIT margin before special items is expected to be 26-27% (unchanged).
Free cash flow before special items is expected to be around EURm 140-170 (unchanged).
See attachment for full Q3 2021/22 interim report.
For further information, please contact:
Anders Mohr Christensen
VP Group Strategy & Investor Relations
Mobile: +45 25 15 23 64
About Chr. Hansen
Chr. Hansen is a global, differentiated 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 have worked for over 145 years to enable sustainable agriculture, better food and healthier living for more people around the world. Our microbial and fermentation technology platforms, including our broad and relevant collection of around 40,000 microbial strains, have game-changing potential. Matching customer needs and global trends we continue to unlock the power of good bacteria to respond to global challenges such as food waste, global health and the overuse of antibiotics and pesticides. As the world’s most sustainable biotech company, we touch the lives of more than 1 billion people every day. Driven by our legacy of innovation and curiosity to pioneer science, our purpose – To grow a better world. Naturally. – is at the heart of everything we do.