Danisco Core Revenues Up in Q1

Tandrup: "Danisco generated organic revenue growth of 5% in the first quarter and an operating profit that will be higher than in the same period last year."

Aug 20 2010 --- In Q1 2010/11, Danisco generated organic revenue growth of 5% and an operating profit that will be higher than last year. This implies that in all likelihood the company will realise its long-term financial ambition of an operating margin of 13.5% before Bio Chemicals Projects in this financial year. In consequence, we are updating our long-term financial ambitions. The early glimpse of first-quarter performance came in Danisco Chairman Jorgen Tandrup's report to the annual meeting of shareholders, ahead of the full quarterly results due on Sept. 21.

In his report at Danisco's Annual General Meeting, Chairman of the Board of Directors, Jørgen Tandrup, presents among other things:
 
“The financial year 2009/10 has been a turning point for Danisco. We continued to take important steps towards meeting our ambitions, and we improved our results on the previous year. Throughout the year, focus has been on delivering on the commitments that we made.
 
In May 2010 we announced that we had met our margin milestone of 12.5% (before Bio Chemicals Projects) in 2009/10 well ahead of plan. This is the result of multi-year efforts with very clear priorities. We certainly met a number of challenges on the way, but they were overcome.
 
In the financial year 2009/10 we achieved 6% revenue growth adjusted for currency movements and acquisitions. And we recorded an operating profit before share-based payments and special items of DKK 1,745 million, equivalent to a margin of 12.7%. That was DKK 497 million or 3.1 percentage points higher than last year.
 
One driver of this performance was a return to growth in our core markets, combined with tailwind from lower input costs. Last but not least we introduced a string of cost containment initiatives, including a pay freeze and extensive rationalisation measures in the sales organisation, at our plants and in the administrative functions in fact, across the entire business. But even if the markets rebound, you have to be prepared to benefit from it. And we are.
 
Given our global presence, with sales and development staff, and our strong product portfolio combined with innovative and sustainable solutions, we are well positioned to become our customers’ First choice – which, as you know, is our key ambition. In this connection I would like to express my gratitude to all our employees for their great efforts over the year.
 
One year ago Danisco was facing two major challenges: Our Sweeteners division was impacted by keen competition within xylitol and Genencor’s earnings had dropped significantly. Since then Genencor has regained momentum in line with our plans, with strong growth and improved earnings thanks to many new and competitive products combined with extensive restructuring measures. We have not achieved our targets yet, but we are well underway.
 
And Sweeteners, though still challenged, achieved a well above-target cash flow for the year. However, we felt compelled to make a DKK 700 million goodwill writedown and to introduce additional restructuring measures. We are starting to see the results of this and are bringing Sweeteners back on track with reasonable earnings and cash flow. Meanwhile, both Enablers and Cultures maintained their strong momentum over the financial year. In fact, both divisions generated record results.
 
Looking ahead, our focus will be on further streamlining our business, and we will continue to invest into our sustainability offering and innovation platform to support our long-term growth path. This is necessary if we are to address unmet customer needs stemming from the global challenges that CEO Tom Knutzen will touch on later.
 
Specifically for our Bio Chemicals Projects the most important of which deal with enzymes for the production of second-generation bioethanol and bio-based materials for the production of synthetic rubber  we are now nearer to realising these major opportunities. I will come back to this later.
 
With these overall reflections I wish, on behalf of the Board of Directors, to indicate two things: Firstly, we are well on the way to achieving our current financial ambitions. Our strategic platform and direction are in place and, secondly, we have ambitions of maintaining momentum as well as generating more growth and earnings.
 
Based on information given to me by the management at a Board meeting just prior to the Annual General Meeting, I can inform you that Danisco generated organic revenue growth of 5% in the first quarter and an operating profit that will be higher than in the same period last year.
 
We are ahead of budget and with such a good start to the year we will in all likelihood realise our long-term financial ambition of an operating margin of 13.5% before Bio Chemicals Projects in this financial year. In connection with the announcement of our Q1 results on 21 September we will be updating our outlook for FY 2010/11.”
 
Meanwhile The Annual Report 2009/10 was adopted and the Board of Directors' proposal to pay a dividend of DKK 17.00 per share of DKK 20 was approved.

Jørgen Tandrup, Håkan Björklund and Kirsten Drejer were re-elected to the Board of Directors.

The Company's auditor, Deloitte Statsautoriseret Revisionsaktieselskab, was re-elected.

The remuneration paid to Directors for the current financial year, which is unchanged, was approved.

The Annual General Meeting adopted the Board of Directors’ proposal to pay remuneration to Directors serving on the Company’s audit committee corresponding to one third of the annual remuneration paid to Directors with a premium of 50% to the Chairman.

Moreover, the Board of Directors’ proposal to pay remuneration to Directors participating in ad hoc committees corresponding to one sixth of the annual remuneration paid to Directors was adopted. The Chairman and the Deputy Chairman are not paid additional remuneration for participating in ad hoc committees.