Whilst the constituent companies of the Global Leaders portfolio are, for the most part, well established, they are also masters of adaption.


Adaption can often be regarded as a series of defensive measures to address competition but it is as easily understood, in the context of companies that outperform endemic growth rates, as grasping new and developing opportunities.

In this Deep Dive series we identify developing growth vectors for companies in the portfolio. We define growth vectors as elements of each companies’ business that will generate super-normal (that is above the endemic growth rate of a sector) for at least the next 10 years.

In December 2022, Novozymes announced its intention to acquire Chr Hansen, an approved but not invested Global Leader company. Novozymes is the global leader in the deployment of enzyme technologies to nutrition, consumer products and industrial processes.

Although these applications have resilient and secular growth profiles, many are at the mature phase of their addressable market. The average annual growth rate of Novozymes revenues has been just under 4% over the past 7 years.

The acquisition of Chr Hansen, which we see as complementary (as we have discussed in previous publications) added a number of vectors for growth to Novozymes. Chr Hansen is the global leader in the application of bacterial cultures to a range of end markets very
similar to Novozymes.

With its expertise and research capabilities in the manipulation of bacterial cultures, Chr Hansen has identified a number of nascent opportunities for the application of its technologies, dubbed “strategic lighthouses”.

These strategic lighthouses are namely bio-protection, plant and human health, HMOs and alternative plant bases for fermentation processes. Each business is expected to have potential for at least EUR100mn of annual revenue and the highest growth rates in the Chr Hansen group.

Indeed looking over the past few quarters of Chr Hansen results, the “lighthouses” have achieved year on year growth rates of 14% (Q422), 29% (Q322) and 12% (Q222).

The contribution of these growth vector businesses may be small in the context of Chr Hansen, and even less tangible in the ~3.5bn to 4bn of expected revenues from the combined group. However, compounding such rates of growth, even from a low base, should make these measurable contributions to both top and bottom-lines in the years to come. The combined addressable markets for the “lighthouse technologies” are expected to reach EUR1.2 to 1.3bn by 2025.

This Journal is taken from the Cerno Global Leaders Investment Report – Q1 2023, which can be read in full here.

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