Chr Hansen positive about ingredients future

By staff reporter

- Last updated on GMT

Related tags: Chr hansen, North america, Private equity, Stock market

Chr Hansen, which experienced growth in all business areas and
regions in 2005/06, expects to continue its upward trend.

Revenue for the year was increased by 8 per cent to DKK 3,767m, while organic growth amounted to 6 per cent.

Operating profit (EBITDA) was increased by 25 per cent to DKK 624m. Ex-cluding extraordinary restructuring costs EBITDA amounted to DKK 767m.

The results underline a positive first year for the company's new owners.

"During the first year with new owners, Chr Hansen has achieved a very satisfying result,"​ said chief executive Lars Frederiksen.

"The result has surpassed both the expectations of the management as well as of the new owners. The performance is markedly improved as to revenue and earnings, just as working capital has been significantly reduced.

Chr Hansen has carried out a number of efficiency measures and sharpened its focus on key value-added sectors. A programme aimed at reducing working capital has been initiated.

In addition, a project on efficient sourcing has been implemented. It is expected that this project will contribute substantially to the result of 2006/07 and beyond.

Geographically, all regions have experienced growth. Strongest was the organic growth in South America with 13 per cent.

The organic growth in North America has, after some difficult years, reached an impressive eight per cent. In Europe the sales have grown by four to five per cent, while China has shown excellent growth rates of more than 50 per cent.

"Chr Hansen has both won market shares and at the same time strengthened our market position within existing areas,"​ said Frederiksen.

The company believes therefore that it has established a solid basis for continued growth in revenue.

"We are in a consolidating business and with the results we have achieved in 2006, we feel in good shape to grow, and not only to grow through organic growth of the existing business, but also through acquisitions,"​ said Frederiksen.

" Fortunately, we have the back-up of a strong owner, who like us, see great possibilities in developing a strong and solid ingredients business within our key areas."

Chr Hansen shareholders gave the green light for private equity firm PAI partners to take over the food ingredients arm of Chr Hansen in June last year. At an Extraordinary General Meeting, stakeholders in the world's number one culture maker cleared the way for PAI to pay €1.1 billion for the business.

The deal exceeded expectations, with the private equity company buying on a price to sales of 2.2 times. Chr Hansen felt that the new owner could bring cash and with it strong opportunities for growth through acquisitions.

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