Danisco Raises Forecast After Strong Q2

17 Dec 2010

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In Q2 2010/11, Danisco recorded revenue of DKK 3.8 billion (EUR0.51bn). Profit for the year is now expected of around DKK 1.3 billion (EUR0.174bn) (previously around DKK 1.2 billion (EUR1.61bn).

12/17/2010 --- In Q2 2010/11, Danisco recorded revenue of DKK 3.8 billion (EUR0.51bn), an 18% increase Y/Y made up of 9% organic growth and 9% positive currency impact. Group EBIT* (before Bio Chemicals Projects – BCP) came in at DKK 623 million, reflecting a margin expansion of 3.7 percentage points Y/Y that was driven by Enablers, Genencor and Sweeteners divisions. Profit for the Group came in at DKK 371 million against DKK 233 million in Q2 2009/10, an increase of 59%.

For FY 2010/11, Danisco now expects to realise revenue of around DKK 15.3 billion (previously around DKK 15 billion) and EBIT (before BCP) of DKK 2.2-2.3 billion (previously DKK 2.1-2.2 billion), resulting in an EBIT margin (before BCP) of around 14.5% (previously around 14%).

Profit for the year is now expected of around DKK 1.3 billion (EUR0.174bn) (previously around DKK 1.2 billion (EUR1.61bn).

CEO Tom Knutzen comments: “Q2 was another strong quarter for Danisco. We can now confidently say that our Sweeteners division is on track to recover profitability. It is also evident that we have established a new earnings level for Genencor and Cultures. And earnings will remain strong for Enablers, even if we are now entering a different phase of the business cycle due to substantial raw material price hikes. Thus we are ready for a new chapter of investing into our future growth platform while maintaining earnings progression.”

• Once again, revenue and EBIT came in well ahead of last year, reflecting stronger performance in all key business areas driven by factors such as a broad-based, improved product offering and production efficiencies.

• Organic growth for Q2 came in at 9% for the Group driven by all four divisions (Enablers 7%, Cultures 6%, Sweeteners 13% and Genencor 13%). Year-to-date, group organic growth stands at 7%.

• EBIT (before BCP) came in at DKK 623 million, reflecting a margin of 16.3% for the quarter (Enablers 17.0%, Cultures 20.8%, Sweeteners 6.7% and Genencor 19.6%). Our YTD EBIT margin before BCP is 16.9%.

• Group RONOA reached 22.8%, up from 14.8% in Q2 last year, driven by improvements in all four divisions.

• Danisco has upgraded its EBIT outlook for the full year by DKK 100 million, reflecting good performance and favourable currencies in Q2. Meanwhile, we maintain our earnings outlook for H2 where we continue to expect progress for Genencor, Cultures and Sweeteners and a slightly lower result for Enablers Y/Y due to the tough comparisons caused by the fluctuating raw material costs.