Chr Hansen reports revenue growth amid US expansion
Global ingredients business Chr. Hansen has reported revenues of €518 million for the first half of 2017/18, up 3% year-on-year.
The Danish-headquartered group has supplied a number of natural solutions to the confectionery and bakery sectors, and has recorded organic growth of 9% for the past six months.
Its profits for the period stood at a stable figure of €98m, with its EBIT also unchanged year-on-year at €136m, with growth of 12% registered for food cultures and enzymes division, an 8% increase for its health and nutrition and 4% upturn for its natural colours activities.
Its latest results come as the company enhances its operations in America through acquiring the Banker Wire manufacturing facility in Mukwonago, Wisconsin.
According to the business, the move responded to growing interest from US consumers seeking natural, recognisable and safe ingredients, with an increased demand on food and beverage producers to convert to natural colours.
The acquired facility will be renovated to become the new North American headquarters for the company’s natural colors division, housing everything from production, to research and development, application and quality assurance labs, a pilot plant, a dedicated warehouse, as well as sales and marketing and other business support functions.
“This is the largest single investment for Natural Colours in recent years and demonstrates our commitment to the important North American market,” says Jacob Vishof Paulsen, acting Executive Vice President of Natural Colours Division. “Having the whole chain gathered in one place will allow for a fast and agile response to customer needs, supporting Chr. Hansen’s current and future business demands for the next decade – with room to grow.”
Speaking on the company’s performance chief executive Cees de Jong (pictured), welcomed the six-month results. He said: “The solid development from Q1 has continued into Q2, with strong organic growth in Food Cultures & Enzymes from all product categories and regions. Sales of bioprotective solutions also continue to show impressive organic growth rates at around 45%. Strong sales in animal health were driven by an improved sales coverage in EMEA and APAC.
He added: “Our EBIT margin before special items in Q2 improved significantly compared with Q1, and was on par with last year despite an adverse impact from currencies of more than 1%-point. Higher depreciations related to the recent capacity expansion were offset by improved production efficiencies in Food Cultures & Enzymes and a better product mix in Health & Nutrition.
We are satisfied with the progress in the first half of the year, and we maintain our overall guidance for the full year. Expectations to organic growth for Food Cultures & Enzymes and Health & Nutrition are unchanged, however, we lower our expectations to organic growth in Natural Colors for the full year to be below the long-term ambition of around 10%, due to the sales development in the first half of the year.”