Solid success in 2006

Chr. Hansen experienced growth in all business areas and regions in 2005/06. Expectations for 2006/07 are on continued growth, both organic and through acquisitions, as well as continued improvement of the profit margin.

• The revenue was increased by 8% to DKK 3.767 mill. The organic growth amounted to 6%
• Operating profit (EBITDA) was increased by 25% to DKK 624 mill. Excluding extraordinary restructuring costs EBITDA amounted to DKK 767 mill.
• Working capital was reduced by DKK 283 mill. and accounts for 21% of the revenue as opposed to 30% in 2004/05
• The result after tax is DKK ? 452 mill and is influenced by higher net interest expenses, increased amortization of goodwill and extraordinary restructuring costs

Better than expected

”During the first year with new owners, Chr. Hansen has achieved a very satisfying result. 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”, says Lars Frederiksen, CEO.

The revenue increase is a result of growth within all divisions - Color Division, Flavor Division and Cultures & Enzymes Division. Especially sales of cultures for food products and probiotic cultures for food as well as Animal and Human Health purposes have developed very positively.

Geographically, all regions have experienced growth. Strongest was the organic growth in South America with 13%. The organic growth in North America has, after some difficult years, reached an impressive 8%. In Europe the sales have grown by 4-5%, while China shows excellent growth rates of more than 50%. ?Chr. Hansen has both won market shares and at the same time strengthened our market position within existing areas? says Lars Frederiksen.

Restructuring and streamlining

In the past year, we have carried out measures to make our operation more efficient. There is a stronger focus on key business areas, which resulted in the sale of the Sweetener activities in Spring 2006. A program aiming at reducing working capital has been initiated, and it has already shown positive results. Furthermore, 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.

Additional resources for research and development

Chr. Hansen is based on a very high level of competences, innovation, research and development. The challenge for the future will be to attract the right human resources and constantly follow the demands of the global market for new products fitted to new trends. Thus the investment in R&D activities will be increased in order to maintain and further develop the high level of product development in Chr. Hansen.

”There will be no growth without competent employees, which is why we have chosen to strengthen and expand our HR activities. For a knowledge-based company like ours, it is of utmost importance to be able to attract the right and specialized competences. Therefore we have launched a new very ambitious and focused employee development program, which includes educational as well as career planning”, says Lars Frederiksen.

We believe in continued growth ”In 2006 we have established a good basis for continued growth in revenue and in particular in earnings for the years to come. 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. 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,” concludes Lars Frederiksen.