Good results across business areas and regions secure upwards narrowing of full-year guidance. Extraordinary dividend announced for pay-out in May.
Continued strong organic growth momentum leads to upwards narrowing of full-year organic growth guidance.
- Q2 2020/21 organic sales growth was 10%, equally split between volume/mix and price, and driven by Health & Nutrition which delivered 14% growth while Food Cultures & Enzymes delivered 8% growth
- Underlying EBIT margin b.s.i.1) of 30.9%, incl. >1%-point negative currency impact, compared to 32.2% in Q2 2019/20. Reported EBIT margin b.s.i. (incl. all acquisition impacts) was 27.0%
- Integration of commercial activities in UAS/HSO is completed and integration of manufacturing is progressing
- HMO capacity expansion in Germany on track, while delays in product registrations and regulatory approvals remain a constraint on market development; the market opportunity long-term is unchanged
- Full-year outlook for organic growth adjusted to 6-8% (previously 5-8%), free cash flow narrowed upwards to EUR 140-160 mio, EBIT margin guidance unchanged, and impacts from acquisitions also unchanged from Q1
Said Mauricio Graber, CEO: “In our second quarter we delivered strong organic growth on a more demanding comparable from last year, with continued good momentum in both business areas. Our business in Asia-Pacific delivered 10% organic growth fuelled by Health & Nutrition, providing reassurance that we can grow the region strongly even as the Chinese yogurt market is still in decline. Customer engagement, both in China and globally, remains high despite the current difficulties of in person interactions.
Through the acquisitions we have done, we are building a more balanced business globally between Food Cultures & Enzymes and Health & Nutrition. We’ve continued the integration of the acquired businesses and have recently completed a major milestone in the divestment of Natural Colours, and we are executing our strategy of becoming a focused bioscience company based on a unique microbial and fermentation technology platform.
Following the divestment of Natural Colours, we have initiated the process for paying out an extraordinary dividend of around EUR 116 million, and payment of the dividend is expected to be affected during the month of May.
In Q2 we progressed on our innovation agenda with many new patents, trademarks and registrations, and in Q3 we will be launching the next generation of Bioprotection for fermented milks and certain cheeses.
As a result of the strong organic growth in the first half of 2020/21, and despite the uncertainties lingering from COVID-19, we have narrowed upwards our full-year outlook for organic growth, and we expect that Q4 to be the stronger of the two remaining quarters, primarily as Q3 of last year had a tailwind effect from customers building COVID-19 related safety inventories.” For more visit chr-hansen.com
