Danisco Reports Solid Quarter, Lifts Outlook
Knutzen: "We now expect to achieve our 12.5% EBIT margin (before BCP) milestone already in FY 2010/11 – i.e. one year ahead of plan."
18 Mar 2010 --- In Q3 2009/10, Danisco reported group revenue of DKK 3.3 billion (US$607 milllion), reflecting 11% organic growth (Enablers 5%, Cultures 12%, Genencor 21% and Sweeteners 6%). Group EBIT (before Bio Chemicals Projects – BCP) came in at DKK 371 million. That reflects a margin of 11.3%, a 4.2 percentage point expansion Y/Y, driven by all divisions aside from Sweeteners. Due to the previously announced non-cash impairment charge of DKK 700 million related to Sweeteners, profit for the Group came in at a negative DKK 354 million.
Strong free cash flow of DKK 345 million was reported for the quarter. Net interest-bearing debt down to DKK 3.2 billion at the end of the period.
CEO Tom Knutzen comments: ‘We continued to see a positive earnings momentum during the quarter and are encouraged by the results that we have achieved this financial year, including our ability to lift our earnings outlook once more. We now expect to achieve our 12.5% EBIT margin (before BCP) milestone already in FY 2010/11 – i.e. one year ahead of plan."
Volumes and pricing in Enablers are holding up well. On the back of a challenging Q3 2008/09, the division’s EBIT margin doubled Y/Y due to good plant performance, efficiency measures and stable input costs.
Within BioActives, Cultures continued to deliver solid growth and margin enhancement Y/Y. Sweeteners is meeting its cash flow targets and has seen revenues stabilising Y/Y. Danisco said it will implement new restructuring initiatives in Q4 2009/10 for this division.
Genencor secured 21% organic growth as well as continued margin improvement Y/Y, driven by all major product categories and geographies. The division launched Accellerase?DUET, delivering a market leading cost performance in enzymes for cellulosic (second-generation) bioethanol production.
Danisco said that its revenue outlook for 2009/10 is now around DKK 13.4 billion (previously DKK 13.25 billion). “We lift our EBIT outlook to around DKK 1,600 million after BCP costs (previously DKK 1,450-1,500 million), and we now expect a profit for the year of around DKK 300 million (previously above DKK 200 million)”, the company said in a statement.
