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Chr. Hansen launches '2025 Strategy'

TAGS: Business
Strategy is to create differentiated bioscience company with focus on microbial and fermentation technology platforms.

Chr. Hansen has released its "2025 Strategy" that seeks to create a differentiated bioscience company with focus on its microbial and fermentation technology platforms, putting Food Cultures & Enzymes and Health & Nutrition at the center of its new strategy. During the strategy period, which runs until the end of the 2024-25 financial year, Chr. Hansen’s long-term financial ambition is to deliver mid- to high single-digit organic growth, averaged over the period.

The company also plans to increase its underlying earnings before interest and taxes (EBIT) margin before special items, before portfolio changes and currency impacts, with efficiency gains and scalability benefits from operations as well as synergies from recent acquisitions to be partly reinvested into the business during the strategy period. Average growth in free cash flow before acquisitions and special items is expected to exceed the average absolute EBIT growth.

“Chr. Hansen has undertaken a tremendous journey since its start as an ingredient supplier to the dairy industry, and I feel very proud to lead a company with such a strong purpose and so many exciting growth prospects,” Chr. Hansen chief executive officer Mauricio Graber said. “With the launch of our '2025 Strategy,' we are stepping up our game to unlock the next wave of value creation by advancing Chr. Hansen into a focused global bioscience player that specializes in fermentation technology and microbial solutions. With this focus, we will be uniquely positioned and clearly stand out in our industry.”

Graber said the company will continue to pioneer microbial science to improve food and health for a more sustainable future.

He noted, “Already today, more than 80% of our revenue contribute to the United Nation’s Sustainable Development Goals, and we are committed to continuing to leverage the 'Power of Good Bacteria,' which is also reflected in our newly defined purpose: ‘Grow a better world. Naturally.’”

During its strategy process, Chr. Hansen conducted a thorough review of industry dynamics, consumer trends and growth opportunities in its existing segments. Megatrends such as a growing world population, demographic shifts, increasing health awareness and a strong climate change agenda continue to support Chr. Hansen’s business model. Growth prospects in the company’s underlying markets remain attractive.

Under its "2025 Strategy," Chr. Hansen has defined four strategic focus areas that set the framework for its future growth trajectory: reinvest, leverage, extend and review.

Reinvest in core platforms

Chr. Hansen has been the ingredient supplier of choice for the dairy industry for many decades and has also built a strong microbial business for animal feed, dietary supplements and infant formula over the last thirty years. During the strategy period the majority of the absolute growth will come from the core platforms. As such Chr. Hansen will continue to prioritize and invest in Food Cultures & Enzymes, Animal and Human Health. Innovative products, launched across all business areas, are expected in the strategy period, both in existing and new product categories, for example probiotic solutions for foods and pet food.

Leverage the Microbial Platform to grow lighthouses and new areas

Chr. Hansen continues to see many attractive growth opportunities to leverage its technology platform to develop solutions for new applications and end markets. The company remains committed to further develop its existing Bioprotection, Plant Health and Bacthera lighthouses and is launching a new lighthouse in Fermented Plant Bases, where Chr. Hansen sees itself uniquely positioned to gain a meaningful share in this fast-growing market.

“Each of the four lighthouses holds tremendous potential. We are breaking new ground, and I am truly excited about the journey that lies ahead of us when it comes to fighting food waste, shaping the future of food and contributing to sustainable farming and the development of pharmaceuticals based on bacteria,” Graber said.

Lighthouses at a glance:

  • Bioprotection -- Special culture range that prevents spoilage, reduces food waste and increases safety of dairy and other foods. The long-term market opportunity is estimated to be around 1 billion euros, with an addressable market of around 200 million euros in 2025.
  • Fermented plant bases -- Fermentation solutions for spoonable and drinkable fermented milk alternatives and fermented beverages. The long-term market opportunity is estimated to be more than 100 million euros, with an addressable market of less than 100 million euros in 2025.
  • Plant health -- Crop protection solutions with a focus on bionematicides, biostimulants and biofungicides. The long-term market opportunity is estimated to be more than 1 billion euros, with an addressable market of around 400 million euros in 2025.
  • Bacthera -- Joint venture with Lonza AG in contract manufacturing for live biotherapeutics. The long-term market opportunity is estimated to be more than 1 billion euros, with an addressable market of 150-200 million euros in 2025 (only clinical trial market).

Extend Microbial Platform through mergers/acquisitions and research/development partnerships

During the strategy period, Chr. Hansen intends to further strengthen its technology platform across its competencies, such as cultures and probiotics, dairy enzymes and value-added fermentation through acquisitions and the expansion of the research and development (R&D) partner network. The recent acquisitions of HSO Health Care and UAS Laboratories are examples of this, and both offer attractive commercial, operational and R&D synergy opportunities.

Review strategic options for non-microbial assets

Chr. Hansen’s Natural Colors division is the global market leader for natural colors. Whilst the division shares the company’s overall purpose and stand-alone offers an attractive return profile, synergies with the Microbial Platform are limited. As already communicated on July 2, Chr. Hansen has therefore decided to initiate a strategic review of its Natural Colors division.

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