Refresco publishes fourth quarter and full year 2018 results of Sunshine Top B.V., the entity owning Refresco Group B.V.

Q4 2018 Highlights

• Total volume was 2,556 million liters (Q4 2017: 1,525 million liters).
• Gross profit margin per liter was 14.3 euro cents (Q4 2017: 14.6 euro cents).
• Adjusted EBITDA amounted to €82 million (Q4 2017: €50 million).

FY 2018 Highlights

• Total volume was 10,888 million liters (FY 2017: 7,104 million liters).
• Gross profit margin per liter was 14.0 euro cents (FY 2017: 14.0 euro cents).
• Adjusted EBITDA amounted to €322 million (FY 2017: €214 million).
• Pro-forma synergies adjusted EBITDA amounted to €374 million.
• One-off acquisition costs and operating cost overruns reflected in net results.
• Net debt excluding shareholder funding amounted to €2,273 million at year-end (September 30, 2018: €2,300 million).

CEO Refresco, Hans Roelofs commented:
“2018 was a transformational year for Refresco. In January we completed the acquisition of Cott’s bottling business, creating the world’s largest independent bottler for retailers and branded beverage companies and in March we completed the public to private transaction by PAI and BCI. In the final quarter of 2018, we continued to see strong overall volume growth across the business in line with our expectations and driven by both the Cott acquisition and organic growth. Although we did not achieve the level of profitability we wanted, we made good progress with integration of the two businesses and synergies are on track.

“One-off costs related to the acquisition of Cott’s bottling business and acquisition of Refresco by PAI & BCI, overruns in operating costs and some headwinds on input costs were the key items impacting our net results for the year.

“In 2018 we worked hard on the building blocks for further profitable growth in 2019 and we invested €134 million in our production and warehousing capabilities across the business. In February 2019, I was pleased to announce that we acquired Cott’s concentrate manufacturing business in Columbus, Georgia (US). This creates a global center of excellence in beverage concentrate manufacturing and adds new innovations skills and capabilities to our Group.

“To accelerate the next phase of our growth, we have decided to adjust the management structure of Refresco and create an Executive Committee. The Executive Committee will comprise the current Executive Board members and as of 1 April 2019 Chief Purchasing Officer (CPO) Coert Michielsen. The Executive Committee will be installed on 1 April 2019.” …

The Annual Report 2018 is available for download under https://bit.ly/2Wtqwnc

Chr. Hansen realizes solid organic growth of 10 % in the first three months of the financial year 2018/19, delivering in line with our „Nature’s no. 1 – Sustainably“ growth ambitions.

Chr. Hansen reports solid organic revenue growth of 10 % in the first three months corresponding to 6 % reported growth due to adverse currency impacts: Food Cultures & Enzymes 10 %, Health & Nutrition 17 % and Natural Colors 6 %. EBIT before special items increased by 9 % to EUR 71 million, corresponding to an EBIT margin before special items of 26.3 % which was up 0.9 %-point compared to last year. The overall outlook for 2018/19 remains unchanged.

CEO Mauricio Graber says: “We have had a solid start to the year, with Food Cultures & Enzymes delivering strong organic growth with contributions from volume and EUR pricing, in line with our expectations. Organic growth in Health and Nutrition was also strong, driven by global demand for probiotics for infant formula in Human Health. Animal Health was impacted by timing of orders, but the underlying interest in microbial solutions for animal farming remains strong, and we continue to improve our route-to-market. Plant Health had another excellent quarter in Latin America, although absolute numbers are still modest. We were also pleased to see the momentum in Natural Colors continue in Q1, driven by demand for coloring foodstuff, where we also launched new products for the FRUITMAX® range during Q1.

“Our EBIT margin before special items in Q1 increased by 0.9 %-point and was driven by improved margins in Health & Nutrition and Natural Colors. The EBIT margin in Food Cultures & Enzymes was positively impacted by a strong development in gross margin, and ended on par with last year, as we continued to invest in our growth and innovation priorities. We continue to expect a positive contribution from further scalability benefits, as we ramp up utilization of the new capacity in our facility in Copenhagen.

“We are encouraged by the solid start to the year, and we maintain our overall guidance for the full year. Our pipeline of products to be launched this year, from all three business areas, looks very promising and will support the growth potential of Chr. Hansen.”

This Trading Statement covers the period from 1 April 2017 to 30 June 2017, which is the first quarter of the financial year.

The Group made an encouraging start to the year with profit in constant currency ahead of the comparative period, and volume ahead in both divisions.

In core Speciality Food Ingredients:

• North America, where the overall Food and Beverage market remained soft, saw modest volume growth with firmer volume from some larger customers, and also continued to make progress in broadening its customer base.
• Asia Pacific and Latin America, and Europe, Middle East and Africa delivered strong volume growth.

In the remainder of the Speciality Food Ingredients division, Food Systems volume was in line with the comparative period and SPLENDA^® Sucralose performed as expected.
• In Bulk Ingredients, the core business performed well driven by solid demand for sweeteners and industrial starches, firm US bulk sweetener margins, and continued strong manufacturing performance. In Commodities, performance was ahead of the comparative period.

Overall, we continue to expect that the Group will make underlying progress in the full year.