Danisco Full Year Profits Decline, Improves Outlook

EBIT came in at DKK 1,248 million against a level of DKK 1,457 million the previous year. This was a result of growth in Emulsifiers, Gums & Systems and Cultures, and a decline in Genencor and in Sweeteners.

25/06/09 Danisco has reported that in FY 2008/09 it posted revenue of DKK 13.0 billion (US$2.43 billion), up 6% Y/Y (4% organic growth). EBIT before share-based payments and special items came in at DKK 1,248 million, and group profit for the period closed at DKK 72 million (DKK 108 million after minorities).

EBIT came in at DKK 1,248 million against a level of DKK 1,457 million the previous year. This was a result of growth in Emulsifiers, Gums & Systems and Cultures, and a decline in Genencor and in Sweeteners. R&D expenditure totaled DKK 743 million for the year, a 12% increase against last year and representing a ratio of 5.7% to revenue (last year 5.4%).

The company reported that despite the currently high levels of economic and financial uncertainty they have decided to maintain the usual level of detail in outlook also for FY 2009/10. Danisco expects organic revenue growth of 3-4%, EBIT of around DKK 1,300 million (this year DKK 1,248 million) and group profit for the year of around DKK 650 million.

CEO Tom Knutzen commented: “This year has been marked by achievements and challenges for Danisco. We executed the Sugar divestment in line with our commitment to stakeholders – and for the continuing part of Danisco our strategic priorities remain intact. We have the right platform to accommodate the opportunities and challenges of the future through innovation, sustainability and focus. However, we also recognise the necessity to improve our performance through higher earnings, better utilisation of our capital employed and reductions in our net working capital. These are all prerequisites for meeting the demands of our stakeholders going forward and to deliver superior value creation.”

Danisco’s full-year group revenue was up by 6% Y/Y. Full-year organic growth 4% (Food Ingredients 3%, Genencor 7%). Strong growth at the start of the year for all segments aside from Sweeteners; the latter part of the year marred by general economic slowdown.
 
Group organic growth rates in Q4 were better than expected after Q3 across all Food Ingredients areas except for Sweeteners – albeit market transparency levels still low. Genencor is also continuing to experience good momentum in most major business areas, the company reported.