Danisco Lifts EBIT Margin Targets

Danisco’s new financial ambitions are based on the exchange rates that formed the basis for the company’s full-year guidance for 2010/11 as of 21 September 2010.

Oct 8 2010 --- Danisco has set new financial ambitions which CEO Tom Knutzen says should be seen as a natural next step “as we continue to execute on our existing strategy – Becoming first choice – that aims to help our customers increase their competitiveness through innovative, sustainable and bio-based ingredient solutions.”

Danisco’s new financial ambitions are based on the exchange rates that formed the basis for the company’s full-year guidance for 2010/11 as of 21 September 2010. They have been defined after costs for share-based payments (SBP) where the previous ambitions were before SBP. The financial ambitions do not include any impact from Bio Chemicals Projects.

• ?Group organic growth 5-7% over an economic cycle
−?Enablers 3-5%
−?Cultures 7-9%
−?Sweeteners 3-5%
−?Genencor 7-9%
• Group EBIT* margin 15.0%
−?Enablers >14.0%
−?Cultures >18.0%
−?Sweeteners >10.0%
−?Genencor >17.0%
−?Unallocated costs: Below 1.5% of Group revenue
• Group RONOA >20%
• Group gearing 1.5-2.5 times EBITDA

Several drivers are already in motion aimed at enhancing our financial performance over the coming years. Increased R&D investments should strengthen our offering further, thus lifting the profitability level of our sales mix. “We expect volume growth and modular capacity expansion within our existing footprint to further enhance our cost competitiveness and returns. And more efficient internal processes within the entire organisation will lower our relative cost level. In other words, we plan to reach our targets through better products, higher volume and more efficient plants, combined with a streamlined and focused organisation. The capabilities from technology to people and processes that are necessary to achieve these ambitions are already in place, and many projects are ongoing,” Knutzen said.

CEO Tom Knutzen comments: “We are confident that we can achieve these new financial ambitions, and we look forward to bringing Danisco to the next level of profitable growth. We will not disclose any exact timeframe for reaching these ambitions externally. Experience has taught us that external factors such as fluctuations in exchange rates, costs for soft commodities and energy, combined with developments in the global economic cycle, may accelerate or decelerate our progression. It is in that light that our focus on continuous progression towards our goals should be seen.“