Chr. Hansen (Sell, TP: DKK620.00) - Weak EBIT margin guidance
Q4 organic sales growth was in line with our estimate and consensus at c9% (we forecast 8.9%, consensus 8.5%). The Q4 EBIT margin was a strong 38.4%, but reported EBIT missed. The 2020/21 guidance was weak and wide at 5–8% organic growth and an EBIT margin of 27–28%. We see consensus EPS estimates down c10%+ and a similar negative share price reaction today.Chr. Hansen is a biosciences group based in Denmark. Co. develops and supplies natural ingredient solutions for the food, pharmaceutical, nutritional, and agricultural industries worldwide. Co. operates in three divisions: Cultures and Enzymes (develops, produces, and sells cultures, enzymes, and probiotics for the food and dairy industries); Health and Nutrition (develops products for the dietary supplement, over-the-counter pharmaceutical, infant formula, and animal feed industries); and Natural Colors (develops natural color solutions to the food industry, primarily for the beverage, dairy, confectionery, fruit preparation and ice cream, as well as functional blends for processed meats).
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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