Danisco Sugar upgrades its long-term financial targets on the back of an
improved outlook for the EU sugar market. Due to a combination of one-offs and
better-than-expected performance, Danisco Sugar also lifts its full-year
outlook for 2007/08. Furthermore, we provide Danisco Sugar's preliminary
outlook for 2008/09. Formal preparations have begun for a spin-off of Danisco
Sugar by the end of calendar year 2008. At the same time we are commencing a
sales process for the sugar business.
CEO Tom Knutzen states: ‘Today's announcement underscores our sustained and
determined commitment to create long-term shareholder value. We remain
confident that Danisco Sugar has a compelling future as an independent entity
due to its strong cash flow generating characteristics that result from it
having one of the most efficient sugar production platforms in Europe. We
continue our preparations for the independence of Danisco Sugar, in line with
what we stated at our AGM in August 2007.'
Highlights
•As announced by the EU in February, a total of 2.5 million tonnes of sugar
were renounced in the latest round of quota reductions, with a further cut
expected to be renounced by 31 March 2008. We now anticipate greater clarity
for the EU sugar market, and an improved balance between demand and supply
•As a result of the improved sugar industry outlook, we raise our long-term
financial target for Danisco Sugar to revenue of at least DKK 6.0 billion and
an EBIT margin (before special items and share-based payments) of at least 10%,
to be achieved after the full implementation of the EU sugar reform
•In 2008/09, we preliminarily expect Danisco Sugar to report revenue of around
DKK 7.0 billion and EBIT (before special items and share-based payments) of
between DKK 400 million and DKK 450 million
•Due to better operating performance as well as certain one-off items, we now
expect Danisco Sugar to report revenue of at least DKK 6.75 billion and EBIT
(before special items and share-based payments) of around DKK 600 million in
2007/08
•The full-year 2007/08 outlook for Danisco A/S will be updated in connection
with the release of our Q3 2007/08 results on 26 March 2008, in accordance with
previously announced plans
•Also as a result of the improved sugar industry outlook, Danisco will now
formally initiate preparations for the spin-off of Danisco Sugar to its
shareholders before the end of calendar year 2008. Our primary objective
remains an independent listing for Danisco Sugar, unless an outright sale of
the business proves to be more value enhancing
•Regardless of the outcome of this process, we will ask our shareholders to
approve either the spin-off or sale at a general meeting
•We will today host and webcast an analyst and press meeting at 2:00 p.m. CET
at our Copenhagen offices.
