In spite of the financial crisis and the general economic recession the bioscience company Chr. Hansen continues its growth. Last year the revenue increased by 10% in local currencies and the earnings reached 30.3%.
• 10.0% organic growth in revenue to EUR 511 million
• EBITDA before special items increased by 9.4% to EUR 155 million
• EBITDA margin was 30.3%
• Free cash flow more than doubled to EUR 78 million
• Expected continued growth for 2009/10
In the financial year 2008/09 Chr. Hansen reached a revenue of EUR 511 million which represents an increase of 7.2% compared to last year. While the exchange rates developed negatively the company in Hoersholm, Denmark increased its sales in local currencies by 10% on the more than 140 markets where its bioscience products are sold.
The sales growth has been particularly strong within the Health & Nutrition Division, where sales of probiotics to the food supplement and agricultural industries increased by almost 27%. Also sales within Chr. Hansen’s largest business area, cultures and enzymes for the food industry, have grown by 9.4%. Sales of natural colors increased by 7.9%. It is particularly international producers of confectionery, beverages and ice cream that choose to replace synthetic colors with natural colors in their products.
It is not only the revenue that has increased. Also the earnings (EBITDA) improved reaching EUR 155 million in 2008/09. Corresponding to 30.3% of revenue compared to 29.6% last year this is a constant continuation of the last four years’ positive development as a result of growth in sales combined with a focused cost control. EBIT increased by 14% and amounts to EUR 109 million.
Platform for growth
”We are extremely satisfied that during challenging times we are able to not only grow our revenue and gain market shares but also to increase our earnings - and not least our ability to generate liquidity,” says Lars Frederiksen, CEO.
”It is especially satisfactory that our sales growth covers both products and markets. We have created a strong and growth driven company based on a solid bioscience platform,” he adds.
Innovation is strengthened
During 2008/09 Chr. Hansen has launched a series of new products but it is mainly new cultures for yoghurt and cheese production and new probiotics for the food supplement industry that are the main reasons behind the good result.
”Overall we spend close to 6% of our revenue on research and development and as we primarily work with customer driven innovation we get our money’s worth of many new products. At the same time we have implemented a range of LEAN projects in our innovation departments in 2009, which have further increased efficiency,” says Lars Frederiksen.
Profit from ordinary activities before tax was EUR 3 million and is influenced negatively by value adjustment of the interest swaps of EUR 28 million. The adjustment is without cash effect. Last year the value adjustment of interest swaps contributed a positive adjustment of EUR 9 million. In 2008/09 Chr. Hansen was also negatively impacted by the interest ceiling rules. This has the effect that despite a profit before ordinary activities before tax of EUR 3 million the corporation tax amounted to EUR 19 million resulting in a loss for the year of EUR 18 million.
Expectations for the future
”Given that the world economy will stabilize we are well prepared for further growth this year. Primary growth drivers will be increased use of industrial food cultures, a strong demand for probiotics and continued sales growth of natural colors combined with new opportunities on emerging markets. We look forward to yet another exciting and challenging year for Chr. Hansen,” Lars Frederiksen concludes.