Chr. Hansen reports soft start to the year

GLOBAL ingredients firm Chr. Hansen experienced a slow first quarter but maintains the outlook for the year.

“As expected Chr. Hansen experienced a slow start to the year 2013/14. Organic growth of 2% excluding carmine price effect was negatively affected by timing of orders and the loss of a customer in the Natural Colors Division in Q4 2012/13,” says CEO Cees de Jong.

“The EBIT margin before special items was 25.2%, which is broadly in line with last year, taking into account the negative impact from changed assessment of development costs. We maintain our outlook for the year with organic revenue growth of 7-9% and an EBIT margin before special items above 26%. We continue to implement our new Nature’s No. 1 strategy to take Chr. Hansen to the next level.

Chr. Hansen has a strong balance sheet and remains committed to distributing excess capital to shareholders. To support this, the Board of Directors has decided to initiate a share buy-back program of up to €80 million. The program is planned to be executed during the period from 15 January 2014 to 22 August 2014”.

Highlights Q1 2013/14
? Revenue €171 million, down 4% on Q1 2012/13
? Organic growth 1% (2% excluding carmine price effect)
? EBIT before special items €43 million, compared to €48 million in Q1 2012/13
? EBIT before special items margin 25.2%, down from 26.7% in Q1 2012/13

Outlook for 2013/14
The outlook for 2013/14 is unchanged from the announcement of 23 October 2013, except for the impact from special items on free cash flow.

Organic revenue growth is expected to be 7‐9%.

The EBIT margin before special items is expected to be above 26%. Special items amounting to a cost of € 8-10 million related to optimization of organization, production footprint and business processes are expected in 2013/14. Special items are expected to impact free cash flow negatively. Including this effect, free cash flow before acquisitions and divestments is expected to be around €110 million.