Sustainability
Roadshow presentation 2020/21
January 2021
1 | © 2020 Chr. Hansen. All rights reserved. |
Safe harbor statement
This presentation contains forward-looking statements that reflect management's current views with respect to certain future events and potential financial performance. Forward-looking statements are other than statements of historical facts. The words "believe," "expect," "anticipate," "intend," "estimate," "outlook," "will," "may," "continue," "should" and similar expressions identify forward-looking statements.
Forward-looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company's markets; the impact of regulatory initiatives; and the strength of competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in records and other data available from third parties.
Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and may be beyond our control. Such risks, uncertainties, contingencies and other important factors could cause the actual results of the Company or the industry to differ materially from those results expressed or implied in this presentation by such forward-looking statements.
The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice. The Company and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward- looking statements contained in this presentation to reflect any change in events, conditions or circumstances beyond what is required by applicable law or applicable stock exchange rules and regulations.
By viewing this presentation, you acknowledge and agree to be bound by the foregoing limitations and restrictions.
2 | © 2020 Chr. Hansen. All rights reserved. |
Chr. Hansen is a microbial powerhouse
with leading market positions across different end-markets in food, health and agriculture
FOOD CULTURES & ENZYMES | HEALTH & NUTRITION |
68% | 32% |
of continuing operations | |
in Q1 2020/21 |
CHEESE AND | WINE AND | PROBIOTICS |
FERMENTED MILK | MEAT |
2025 Strategy
HUMAN ANIMAL
HEALTH HEALTH
FERMENTED | BIOPROTECTION | PLANT | LIVE | HMOS |
PLANT BASES | HEALTH | BIOTHERAPEUTICS1 |
1 Does not contribute to organic growth (50-50 JV with Lonza). | |
3 | © 2020 Chr. Hansen. All rights reserved. |
We address global challenges
with the Power of Good Bacteria™
Food production | 1/3 of all food is wasted | Aging population, rise | 70% agricultural |
accounts for nearly 1/3 | equal to 8% of global | in non-communicable | efficiency increase is |
of global greenhouse | greenhouse gas | diseases and antibiotic | needed to feed the |
gas emissions | emissions | resistance | future population |
FOOD CULTURES & ENZYMES
Our Good Bacteria can:
HEALTH & NUTRITION
Increase productivity | Extend shelf life of | Create great | Support gut & | Potentially cure | Reduce use of | Replace chemical |
in yogurt and cheese | foods and protect | healthy and | immune health in | diseases as 'bugs | AGPs in livestock | pesticides in crop |
manufacturing | against pathogens | tasty foods | adults and infants | as drugs' | production | farming |
4 | © 2020 Chr. Hansen. All rights reserved. |
We drive industry-leading profitable growth to grow a better world. Naturally.
Financial and non-financial ambitions until 2024/25
FINANCIALS
Creating value for shareholders.
Industry-leading growth
- Mid-tohigh single-digit organic growth CAGR
Improving profitability
- Underlying expansion in EBIT margin b.s.i. before portfolio changes and FX
Strong cash flow generation
- Free cash flow b.a.s.i. to grow faster than absolute EBIT b.s.i.
PRODUCTS
More than 80% of revenue from sustainable products.
- 25m hectares covered with natural solutions
- 200m people consuming our probiotics
- 2m tons of yogurt waste reduced
PLANET
Limit global temperature rise to 1.5oC.
- 100% Renewable energy
- 100% Circular management of biowaste
- 100% Key packaging materials recyclable
PEOPLE
A diverse, engaged and safe workforce.
- 1:1 Female employees and women in management
- Top 25 Score in engagement matters survey
- < 1.5 Lost-Time Incident Frequency
5 | © 2020 Chr. Hansen. All rights reserved. |
We aim for more than 80% of our revenue to contribute directly to the United Nation's Global Goals
CONTRIBUTION TO GLOBAL GOALS
in % of gross revenue1
FARMLAND TREATED WITH NATURAL SOLUTIONS2 in m ha
YOGURT WASTE SAVED | PROBIOTICS CONSUMED |
in m tons | in m people3 |
81% | 82% | 79% | 81% | >80% |
2.2
25
13.6
10.4
6.7
3.5
2.0 | 200 |
163
0.8
0.6
0.4
0.2
0.1
16/17 | 18/19 | 24/25 |
15/16 | 17/18 | 19/20 | 24/25 |
- Continuing operations.
- Plant Health or silage inoculants.
- New KPI, no previous data available. Excl. acquisitions.
15/16 | 17/18 | 19/20 | 24/25 | 15/16 | 17/18 | 19/20 | 24/25 |
6
Direct impact
Strong opportunity
Impact
Opportunity
Indirect impact
Limited opportunity
We focus on the three SDGs where we can make the strongest impact
Impact category
Improving food and the environment
Increase productivity and yield | | |
Reduce waste | | |
Substitute artificial ingredients | | |
Increase food safety | | |
Improving animal and human health | ||
Enhance animal welfare | | |
Promote health and well-being | | |
Reduce salt, sugar, fat and lactose | | |
Ensure access to nutrition | | |
7
Our 2025 Strategy embeds our commitment to sustainability across all pillars
Strategic ambition until 2024/25
Creating a
differentiated bioscience company with focus on microbial and fermentation technology platforms
2012/13 - 2018/19
NATURE'S NO. 1
2020/21 - 2024/25
2025 STRATEGY
LEVERAGE
microbial platform to grow lighthouses and expand into new areas
REINVEST
in core platforms FC&E, Human and Animal Health
REVIEW
strategic options for non-microbial assets
- Natural Colors division sold to EQT (closing spring 2021)
EXTEND microbial platform through M&A and partnerships
© 2020 Chr. Hansen. All rights reserved.
We REINVEST in our core platforms
to defend and further strengthen our market positions in dairy and meat, Human and Animal Health
FOOD CULTURES | HEALTH | |||
& ENZYMES | & NUTRITION | |||
NEW: | NEW: | |||
Probiotics | Pet food | |||
in food | ||||
Dairy | Probiotics | Human Health | Animal Health |
and meat | for fermented milk | Dietary supplements | Cattle, swine |
and infant formula | and poultry |
9 | © 2020 Chr. Hansen. All rights reserved. |
We bring new innovations to dairy farmers
to help them produce more efficiently and sustainable
We have product solutions for both driving efficiencies and creating healthier, tasty, clean-label products.
CHY-MAX® SUPREME | SWEETY® AND NOLA® FIT | FRESHQ® | ||
FOR HIGHER CHEESE YIELDS | FOR LESS SUGAR | FOR LESS FOOD WASTE | ||
Cost saving | Cost saving | Cost saving | ||
2,000 tons less milk1 | ~0.5% of cost of goods sold | 5,000 tons saved milk1 | ||
CO2 savings | Health benefit | CO2 savings | ||
3,000 tons | Up to 20% | 7,500 tons | ||
reduction in added sugar | ||||
1 Illustrative example for average dairy producing 20,000 tons cheese and 100,000 tons yogurt and sourcing 300,000 tons of milk. | |
10 | © 2020 Chr. Hansen. All rights reserved. |
Antimicrobial resistance
is one of the top 10 treat to global health
EU to reduce the sale of antimicrobials for farmed animals and in aquaculture
by 50% until 2030.
Global deaths
linked to antibiotic
resistant bacteria could
rise from 700,000 today to 10 million by 2050.
53% of antibiotics
used by Chinese farmers
were used as growth promoters in 2018.
75% of antibiotics used globally are given to animals
raised for food.
Antimicrobial
resistance is one of
the top 10 treat to global health.
Sources: Nature (2020), WHO (2020), Foodnavigator (2020). | |
11 | © 2020 Chr. Hansen. All rights reserved. |
Consumers and regulators are calling for less antibiotic usage
in livestock productions - our Animal Health probiotics can be part of the solution
BOVAMINE®
FOR DAIRY AND BEEF CATTLE
- Increase milk yield
- Reduction in pathogens
- Decrease in antibiotic drug cost
BIOPLUS®
FOR SWINE
- Reduction in piglet mortality rate
- Decrease in feed used per kg weight gain
- Better defense against viral challenges
GALLIPRO®
FOR POULTRY
- Feed cost savings
- Decrease in pathogens
- Same performance without AGPs
12 | © 2020 Chr. Hansen. All rights reserved. |
In Human Health we want to be the voice of science
and bring best-documented probiotics to supplements and food consumers
OUR STRAINS ARE THE BEST DOCUMENTED IN THE WORLD AND WE CONTINUE TO INVEST IN SCIENCE AND DOCUMENTATION
Number of hits by strain name1
0 | 100 | 200 | 300 | 400 | 500 | 600 | 700 | 800 |
LGG®
BB-12®
THE PROBIOTIC INSTITUTE2 LAUNCHED TO EDUCATE HEALTH CARE PROFESSIONALS AND CONSUMERS ON THE BENEFITS OF PROBIOTICS
LA-5®
GR-1®
RC-14®
1 Source: PubMed. | |
2 Disclaimer: The Probiotic Institute is an online platform from Chr. Hansen's US subsidary Chr. Hansen Inc. And is is intended for U.S. audiences only. | |
13 | © 2020 Chr. Hansen. All rights reserved. |
We LEVERAGE our Microbial Platform to develop lighthouses
that bring microbial solutions to new applications in food, health, farming and pharma
FOOD CULTURES | HEALTH |
& ENZYMES | & NUTRITION |
Bioprotection | Fermented Plant Bases | Plant Health | Live Biotherapeutics | HMOs | |||||
Reduce food spoilage | 'Fermented milk' alternatives | Microbial crop protection | Contract manufacturing for | Prebiotics for infant | |||||
and increase food safety | and fermented beverages | for more sustainable farming | live biotherapeutics (Lonza JV) | formula (Jennewein) | |||||
Estimated addressable markets1 | |||||||||
EUR 200m | EUR 1bn | EUR <100m | EUR >100m | EUR 400m | EUR >1bn | EUR 150-200m | EUR >1bn | EUR >400m | EUR >1bn |
2025 | Long-term | 2025 | Long-term | 2025 | Long-term | 2025 | Long-term | 2025 | Long-term |
1 Management estimates.
LIGHTHOUSE: New business area of strategic importance with minimum revenue potential of EUR 100m per year and above Group growth rates.
14 | © 2020 Chr. Hansen. All rights reserved. |
We develop bioprotective cultures
that can extend shelf life and increase food safety across a number of applications
APPLICATION | FERMENTED | CHEESE | FERMENTED | OTHER | DAIRY & MEAT | FRUITS |
MILK | MEATS | MEATS & FISH | ALTERNATIVES | & VEGETABLES | ||
Extend shelf life & reduce food waste | | | | | ||
Value | ||||||
proposition | | | | | | |
Clean labelling & food safety | ||||||
Product offering | ||||||
Capabilities | ||||||
Commercial/ market access | ||||||
Opportunity Penetration today | ~10% | <5% | ~10% | <1% |
15 | © 2020 Chr. Hansen. All rights reserved. |
Fermented Plant Bases: New emerging lighthouse
captures trend towards alternative protein sources and healthier beverages
GROWTH DRIVERS
Changing consumer preferences
with focus on health and more sustainable consumption
Government and NGO support
driven by global climate agenda and increasing protein demand
Improving product quality, availability and pricing
NEW LIGHTHOUSE:
Fermented Plant Bases
'FERMENTED MILK' ALTERNATIVES
Solutions for spoonable and drinkable formats
ACCELERATE
FERMENTED BEVERAGES
Solutions for non-/low-alcohol beer & fermented tea
'MEAT' ALTERNATIVES
EXPLORE
'CHEESE' ALTERNATIVES
16 | © 2020 Chr. Hansen. All rights reserved. |
We use fermentation to transform proteins into great foods
- no matter which base
NUTRITIONAL VALUE | ENVIRONMENTAL IMPACT | ||||||
Per 100g | Per 1kg | ||||||
Water | Carbon | Land | |||||
Calories | Protein | Calcium | Vitamin | footprint | footprint | use | |
(kcal) | (g) | (mg) | B12 (μg) | in l | in kg CO2 eq. | in m2 | |
Cow's milk | 65.1 | 3.33 | 120 | 0.24 | 1,020 | 23-52 | 33-158 |
Nuts Coconut milk | 31 | 0.21 | 18 | - | 9,063 | 1.5 | 4.3 |
Soy milk | 37.1 | 3.31 | 12 | - | |||
Cereals | 1,644l | 0.54 | 1.4 | ||||
Oat milk | 42.6 | <0.46 | 1 | - |
MICROBIAL SOLUTIONS
FERMENTATION for texture, taste, less sugar/salt | BIOPROTECTION for shelf life extension, clean labelling, food safety | PROBIOITCS gut health, immunity, novel indication areas | ENZYMES coagulation, lactose reduction, productivity | |||
for | for | |||||
Sources: Euromonitor (2020), CIQUAL, USDA National Nutrient Database 2019, Nijdam D et al. Food Policy. 2012 (37) 6,p760-770; Treu et al. Journal of Cleaner Production161 (2017): 127-142, | |
waterfootprint.org/en/waterfootprint/product water footprint. | |
17 | © 2020 Chr. Hansen. All rights reserved. |
We have a strong product pipeline in Plant Health
to bring biological crop protection solutions to market
TARGET CROPS
In-furrow applications:
Sugarcane
Coffee
Fruits & vegetables
Seed coating:
Soy
Corn
Beans
Cotton
PRODUCT PIPELINE
QUARTZO® | Drive penetration in sugarcane in Brazil and expand in LATAM |
ACCUDO® | Biostimulant launched in South Korea; awaiting EU registration (FY21) |
First biofungicide | First biofungicide to be launched (FY21) |
Further products in | |
development and | |
registration |
PRESENCE® | Drive penetration in soy in Brazil and expand in LATAM |
AVODIGEN® | Drive adoption in North America and register for other geographies |
Further products in | |
development and | |
registration |
50% reduction
in chemical pesticides targeted by EU until 20301
27
Chemicals may be banned in India which is the fifth largest market for crop protection2
1 See European Commission EU Green Deal, Farm to Fork strategy. | |
2 Indian Government published draft proposal to ban 27 chemical pesticides that present 40% of total crop protection sales in May 2020. | |
18 | © 2020 Chr. Hansen. All rights reserved. |
Our joint venture Bacthera
is a crucial enabler for the emerging live biotherapeutics or 'bugs as drugs' industry
RAPIDLY EMERGING MARKET FOR LIVE BIOTHERAPEUTICS
FULL SUPPLY CHAIN OFFERING WITH TRULY DISTINT CAPABILITIES
+100 THERAPIES TARGETING MICROBIOME IN DEVELOPMENT
Depression, Alzheimer's, Parkinson's
Psoriasis, acne, atopic dermatitis
Crohn's disease, IBD, C. diff. infection
Urinary infection, fertility issues
Cancer (with immunotherapy), diabetes, obesity, allergy
EUR >1bn
long-term market potential
EUR 150-200m in 2025 (only (clinical trial)
PRE-CLINICAL
DEVELOPMENT
STRAIN INTAKE
(DK)substanceDrug | (CH)product Drug |
FERMENTATION & | |
FREEZE DRYING |
FORMULATION & DRUG
DELIVERYCOMMERCIAL PRODUCTION
- Organization established (+50 FTEs) and first customer contracts signed; strong pipeline
- Supply chain build-out progressing well with first phase of investments to be completed by end of Q1 FY21 (EUR 90m in total FY20-22 split between CHR/Lonza)
- Largely self-funding after FY22
19 | © 2020 Chr. Hansen. All rights reserved. |
We EXTEND our Microbial Platform through M&A and partnerships
to further enhance our microbial and fermentation capabilities | EXTEND |
COMPLEMENTED WITH
BOLT-ON ACQUISITIONS
2015 | 2016 | 2016 | 2018 | 2020 | 2020 | 2020 |
DIAL | NPC | LGG | Hundsbichler | HSO | UAS Labs | Jennewein |
Microbial
Platform
STRONG NETWORK
OF GLOBAL PARTNERS
20 | © 2020 Chr. Hansen. All rights reserved. |
High growth in global HMO market
driven by consumer demand for 'close-to-nature' infant formula and increasing scientific evidence
HMOS ARE THE THIRD LARGEST COMPONENT IN HUMAN MILK
Nutrient composition in human milk
Proteins
DEMAND FOR HMOS IS EXPECTED TO INCREASE MEANINGFULLY
Addressable market in EUR1
HMOs
2'-FL
>1bn | Chr. Hansen's |
5th lighthouse | |
Fat
+150
HMO types
known today
Lactose
Other HMOs
Selected health benefits:
- Support neuronal & brain development of infants
- Reduce risk of NEC in pre-terms infants
- Improve digestive health & strengthen immune system
- Immunomodulatory effect
- Act against bacterial/viral pathogens and toxins
1 Management estimates.
>400m
>100m
Today 2025 Long-term
Growth drivers:
- Premiumization trend in infant formula to drive penetration
- Regulatory approval in NA, Europe and parts of LATAM and Asia; further countries to come
- Increasing scientific evidence around health benefits
• Combination products and new applications
21 | © 2020 Chr. Hansen. All rights reserved. |
We implement our 2025 Strategy across five dimensions
How to win
- CUSTOMERS
- INNOVATION
- OPERATIONS
- PEOPLE
- PURPOSE
Further expand customer base and global reach
Accelerate new product development and commercialization
Realize scalability benefits and operational efficiencies
Safeguard culture and invest in talent management
Drive sustainability agenda to Grow a better world. Naturally.
- and excel in customer centricity by expanding route-to-market, adding resources in application, sales and marketing and advancing our digital agenda.
- with dedicated project management and a new governance set-up, as well as through the expansion of R&D partner network and digitalization.
- through future capacity expansions, process innovations, robotics and automation.
- with a commitment to diversity, creating a safe workplace, driving a mindset
of best and attracting millennials.
… and committing to limit global temperature rise to 1.5 degrees.
22 | © 2020 Chr. Hansen. All rights reserved. |
We aim to further expand our global presence
and strengthenour position in emerging markets
CUSTOMERS
OUR R&D AND PRODUCTION FOOTPRINT | Denmark1 | ||
Germany1 | |||
United States1 | Russia | ||
Japan | |||
France | Czech | ||
Republic | |||
China | |||
Middle East1 | |||
Mexico | India | ||
Singapore1 |
Brazil
R&D centers
Australia
Application centers | Argentina |
Production
1 New application center or further expansion/investments during strategy period. | |
23 | © 2020 Chr. Hansen. All rights reserved. |
We have a strong and well-balanced R&D pipeline
INNOVATION
across core businesses and lighthouses to drive growth during 2025 Strategy period and beyond
FOOD CULTURES & ENZYMES
HEALTH &
NUTRITION
Short-term | Mid- to long-term | |||||
DAIRY & MEAT | Maintain lead in core range e.g. next generation dairy enzymes, sugar reduction | |||||
PROBIOTICS | Probiotic solutions for new food applications (beyond traditional yogurt) | |||||
3rd gen fermented milk | ||||||
BIOPROTECTION | Fermented plant bases | Cheese and non-fermented meat | ||||
FERMENTED | Yogurt alternatives | Non-alcoholic beer | Cheese and meat alternatives | |||
PLANT BASES | ||||||
HUMAN HEALTH | New strains for infant and dietary supplements | ||||
ANIMAL HEALTH | Pet health | Next generation probiotic strains for swine and cattle | |||
PLANT HEALTH | New biostimulant/biofungicide | Next generation bionematicides | |||
24 | © 2020 Chr. Hansen. All rights reserved. |
We will expand our production capacity
while realizing optimization initiatives and synergies from UAS Labs integration
OPERATIONS
MOST OF OUR CAPEX PROJECTS ARE CENTERED AROUND BUILDING CAPACITY
Illustrative based on capex spend in the last 5 fiscal years
Replacements/
Maintenance
Efficiency/ | Capacity/ |
Sustainability/ | New Business |
Safety |
WE CONTINUE TO DRIVE OPERATIONAL EFFICIENCIES THROUGH AMBITIOUS EFFICIENCY PROGRAMS ACROSS LEAN, PROCESS INNOVATIONS & DIGITALIZATION
Fermentation | Downstream | Robots and |
yields | optimization | automation |
Increasing | Optimizing separation | Reduce repetitive |
fermentation yield of | techniques to reduce | workload and manning |
Animal and Plant | energy consumption | e.g. via intelligent |
Health production | and increase yields | internal transportation |
strains via fed-batch | system | |
process |
25 | © 2020 Chr. Hansen. All rights reserved. |
We commit to further reducing our environmental footprint
through targeted initiatives in the areas of renewables, circular management of waste and recycling OPERATIONS
INITIATIVES
RENEWABLE
ENERGY
CIRCULAR
MANAGEMENT
OF BIO WASTE
AMBITION FOR GLOBAL OPERATIONS UNTIL 2024/25
compared to 2018/19
40% 2018/19
Use electricity from renewable
sources for all global operations
100% 2024/25
69%
Recycle or reuse biowaste generated from our operations
100%
KEY PACKAGING
MATERIALS RECYCLABLE
Deliver all products with recyclable packaging materials
67%
100%
SBT-INITIATIVE JOINED IN JULY 2020 COMMITTING TO LIMIT GLOBAL TEMPERATURE RISE TO 1.5 oC
ACTIVITIES TO BE INITIATED DURING 2021/2022 TO START REPORTING IN LINE WITH TCFD RECOMMENDATIONS
26 | © 2020 Chr. Hansen. All rights reserved. |
We safeguard our culture and invest
in talent management and diversity
PEOPLE
SAFEGUARD CULTURE & SUCCESSFUL ONBOARDING OF NEW EMPLOYEES
- Top 25% score in employee engagement survey
- 100% of new employees introduced to culture model
- 2019/20 performance: 100 % introduced
COMMITMENT TO TALENT MANAGEMENT AND DIVERSITY
- 1:1 ratio between female employees and managers
- 2019/20 performance: 43:37 ratio between female employees and managers
SAFE PLACE TO WORK
- <1.5 lost-time incident frequency
- 2019/20 performance: LTIF: 1.3
ATTRACTIVE COMPENSATION FOR MANAGEMENT
- Performance metrics aligned with shareholder interests
- In line with industry benchmarks
27
We strive everyday to grow a better world. Naturally.
PURPOSE
SUSTAINABLE | BETTER FOOD | IMPROVED |
AGRICULTURE | PRODUCTION | HEALTH |
Natural plant | Better quality | Animal | Quality and | Efficient | Less waste | Healthier | Supporting | Next |
protection | silage | nutrition | safety | production | food | health | generation | |
health |
28
Executive compensation linked to sustainability
and closely aligned with shareholder interests; strong incentive component
SHORT TERM: ANNUAL INCENTIVE PROGRAM FOR CEO AND CFO
- Based on group financial and non-financial targets
- Non-financialKPIs related to customer service, quality, diversity, safety and environment
- Bonus is paid as a minimum 1/3 in Restricted Stock Units and 2/3 in cash; normally accounts for 25-30% of total remuneration package
Organic growth | EBIT | FCF | Non-financial |
40% | 30% | 10% | 20% |
In % of fixed pay1 | Target | Max |
CEO | 70% | 100% |
CFO/EVP | 50% | 70% |
LONG TERM: PROGRESSIVE THREE-YEAR INCENTIVE PROGRAM
- Requires personal investment in Chr. Hansen shares to participate
- Grant value estimated (based on Black-Scholes) at 20-25% of the remuneration package
- Vest in full after three years
TSR relative to | Accumulated | Organic growth Retention | |
peers 1.5x | EBIT 1.5x | CAGR 1.5x | 0.5x |
Target matching shares per investment of one share
In % of fixed pay1 | Target | Max |
CEO | 80% | 120% |
CFO/EVP | 60% | 90% |
1 Base plus pension. | |
29 | © 2020 Chr. Hansen. All rights reserved. |
Strong governance
with diverse competencies and dual management system
DIVERSITY OF BOARD OF DIRECTORS (shareholder electives)
50%
Female
Gender
50%
Male
37%
Danish
Nationality
63%
Non-Danish
87%
Independent
Independence
13%
Not independent
GOVERNANCE
Shareholders | |||||||||||||
Board of Directors | |||||||||||||
Audit | Nomination | Remuneration | Scientific | ||||||||||
Committee | Committee | Committee | Committee | ||||||||||
Executive Board
Corporate
Leadership Team
Organization
30 | © 2020 Chr. Hansen. All rights reserved. |
Sustainability Board
is responsible for ensuring ownership, involvement and commitment from the entire business in defining, prioritizing and executing Chr. Hansen's sustainability objectives and activities
31 | © 2020 Chr. Hansen. All rights reserved. |
Sustainability ratings & rankings
Chr. Hansen regularly submit information about our performance to customers and investors via global reporting platforms, such as MSCI, Oekom, Eco-Vadis, Sustainalytics, the Carbon Disclosure Project, FTSE4Good and Sedex.
RATING | RANK | DESCRIPTION |
B | Above sector average (D) | |
AA | Robust product safety strategy, strong governance structures | |
4th of 121 | Ranked 4th in subindustry, Specialty Chemicals | |
94th percentile | Awarded silver rating | |
✓ | Chr. Hansen listed as a constituent | |
No. 24 | Ranked the 24th most Sustainable Company in the World | |
32 | © 2020 Chr. Hansen. All rights reserved. |
A Decade of Action: Climate commitment to Business Ambition for 1.5oC and the Science Based Targets initiative
ROADMAP FOR SCIENCE-BASED TARGETS
Mapping CO2e emissions | Action roadmaps for | Submitting targets for | Target year for reaching |
across our value chain | reaching targets | validation to SBTi | Science Based Targets |
Q1 FY21 | Q2 - Q3 FY21 | Q4 FY21 | FY30 |
ACTIVITIES IN SCOPE FOR MAPPING CO2e
33 | © 2020 Chr. Hansen. All rights reserved. |
We aim for industry-leading organic growth
across our two segments
FOOD CULTURES & ENZYMES | HEALTH & NUTRITION | CONTINUING OPERATIONS | ||
Organic growth | EBIT margin | |||
31.0% | 31.5% | 32.2% | ||||||||||
33.5% | 33.6% | 33.7% | ||||||||||
34.3% | 34.5% | 34.3% | 34.3% | 34.3% | 28.3% | 29.2% | 32.8% | 33.1% | ||||
12% | 9% | 12% | 8% | 5% | 2% | 14% | 8% | 9% | 9% | 10% | 11% | 11% | 8% | 6% |
15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 15/16 | 16/17 | 17/18 | 18/19 | 19/20 |
34 | © 2020 Chr. Hansen. All rights reserved. |
We remain committed to driving gross margin expansion
while investing in sales & marketing and R&D to support future growth
COST OF SALE % of revenue | Increase due to higher COVID- | SALES & MARKETING EXPENSES % of revenue | |||||||
19 related freight costs | |||||||||
13.2% | 13.2% | 14.1% | 13.9% | ||||||
40.3% | 39.5% | 39.2% | 38.5% | 39.8% | 12.1% | ||||
15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 24/25 | 15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 24/25 |
ADMINISTRATIVE EXPENSES % of revenue | R&D EXPENSES INCL. CAPITALIZATIONS % of revenue | ||||||||||
7.6% | 7.2% | 6.8% | |||||||||
6.5% | 8.0% | 8.1% | 8.1% | 8.0% | |||||||
7.8% | |||||||||||
5.5% | |||||||||||
15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 24/25 | 15/16 | 16/17 | 17/18 | 18/19 | 19/20 | 24/25 |
Note: Restated figures for continuing operations. | |
35 | © 2020 Chr. Hansen. All rights reserved. |
Growth in free cash flow to exceed growth in absolute EBIT
supported by reduced investment needs until 2024/25
CAPEX SPENDING FOR CONTINUING OPERATIONS
in EUR million and % of revenue
~150 -175
12.6% 12.2%
118 119
Ex. HMO
18/19 | 19/20 | 20/21E | 24/25E |
UAS LABS ACQUISITION AND PRODUCTION OPTIMIZATION ALLOW FOR PHASING OF CAPEX PROJECTS TO BEYOND THE STRATEGY PERIOD
Selection of large capex projects | Expected completion | ||
Capacity upgrade, Roskilde | 2021/22 | ||
Freeze dried & powder packaging, Copenhagen | 2022/23 | ||
Additional fermentation capacity upgrades, US | 2022/23 | ||
NEW: HMO production, Kalundborg (phase I) | 2022/23-23/24 | ||
Additional fermentation capacity upgrades, Germany | 2024/25 | ||
Innovation campus incl. application center & new pilot plant, Denmark | 2022/23 | ||
Next large-scale dairy expansion | After 2024/25 | ||
Postponements of capex due to UAS Labs acquisition:
Expansion of Human Health facility, Roskilde
Dairy alternatives production
36 | © 2020 Chr. Hansen. All rights reserved. |
Creating shareholder value
with very clear capital allocation priorities
CAPITAL ALLOCATION PRIORITIES
Organic growth | 1 | Investments into capacity, innovation and people |
Bolt-on acquisitions | 2 | To strengthen technology platform |
and/or expand market access | ||
Ordinary dividend1 | 3 | 40-60% of net income |
Distribution of excess cash | 4 | Extraordinary dividend or share buy-back | ||
1 The dividend proposed will depend on the Board of Directors' assessment of factors such as business development, growth strategy, current leverage and financing needs, | ||||
and there is no guarantee that an ordinary dividend will be proposed or declared in any given year. | ||||
37 | © 2020 Chr. Hansen. All rights reserved. |
WHAT WE WILL NOT DO
- Pursue acquisitions in unrelated areas
- Expand outside microbial and fermentation platform
- Expand enzyme business outside food enzymes
- Become an integrated solutions provider
- Become a full value-chain pharma company
Financial calendar | Contacts |
April 15, 2021 | Martin Riise |
Interim Report Q2 2020/21 | Head of Investor Relations |
+45 53 39 22 50 | |
July 8, 2021 | DKMARI@chr-hansen.com |
Interim Report Q3 2020/21 | |
Annika Stern | |
October 14, 2021 | Investor Relations Officer |
Annual Report 2020/21 | +45 23 99 23 82 |
DKASTE@chr-hansen.com | |
November 24, 2021 | |
Annual General Meeting 2021 |
Annemarie Meisling
Head of Sustainability +45 52 18 01 68 DKANME@chr-hansen.com
Louise Rosenmeier
Sustainability Officer +45 53 39 27 82 dkloro@chr-hansen.com
38 | © 2020 Chr. Hansen. All rights reserved. |
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Chr. Hansen Holding A/S published this content on 25 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2021 15:47:08 UTC