Company announcement no. 5/2009
March 20, 2009
RECORD REVENUE AND STRONG EARNINGS IN 2008
In 2008, the Auriga group experienced favourable market conditions for the
agrochemical industry, and revenue increased by 30 per cent to DKK 5,664 million
(DKK 4,368 million). At DKK 515 million (DKK 145 million), operating profit
(EBIT) was the second-highest ever. The international financial crisis and
foreign exchange unrest led to increasing financing costs, especially in Q4. A
profit before tax of DKK 402 million was realised (DKK 83 million), which is in
line with the most recently announced outlook.
RESULTS IN 2008
Revenue was up 30 per cent at DKK 5,664 million (DKK 4,368 million), even though
the settlement price of the group's main currency, USD, declined to approx. DKK
5.00 against DKK 5.80 in 2007. At unchanged exchange rates, growth would have
been 35 per cent.
With an estimated market growth of just over 20 per cent, Cheminova has grown
more than the market, also increasing its market share in 2008. The growth is
based on a positive market characterised by a strong demand for the largest
product, glyphosate, increased sales of new products and the acquisition of a 50
per cent stake in the German Stähler group.
Operating profit increased by DKK 370 million to DKK 515 million (DKK 145
million), corresponding to an EBIT margin of 9.1 per cent (3.3 per cent).
Considerably higher raw material and energy costs were offset by price increases
in the market. Development and registration costs were maintained at a high
level, but now account for less than 5 per cent of revenue.
Net interest-bearing debt increased to DKK 1,486 million (DKK 701 million),
especially following the acquisition of 50 per cent of Stähler and an increasing
working capital.
BUSINESS PLAN "FIVE-IN-FIFTEEN"
Cheminova's new business plan sets out several ambitious growth and earnings
targets and forms the cornerstone of the value creation to be seen in the coming
years. The plan is being launched under the name of ”Five-in-Fifteen” as
Cheminova will be striving to double its market share to 5 per cent in 2015.
Growth in revenue is driven by healthy and strong organic growth based on new
and existing products, but acquisition of complementary companies and products
will also contribute significantly to fulfilling the growth target. Economies
of scale and ongoing streamlining will improve earnings margins, resulting in
an EBITDA margin in 2015 matching the best among peer companies in the
industry.
OUTLOOK 2009
The long-term market conditions for the agricultural and agrochemical sectors
are still believed to be good. However, considerable uncertainty surrounds the
question of the extent to which developments in 2009 will be affected by the
general economic downturn, falling crop prices and the credit crunch. It has
been a weak start to the year, with customers hesitant about placing orders, but
the industry is still expecting a positive development for the year as a whole.
However, also this year Cheminova expects to grow more than the industry in
general, thereby increasing its market share.
For 2009, the Auriga group expects revenue of approx. DKK 6,250 million and an
EBIT margin of approx. 9 per cent. Cash flow from operating activities is
expected to be positive in 2009.
ANNUAL GENERAL MEETING
The annual general meeting will be held at the company offices in Harboøre,
Denmark, on April 2, 2009 at 2 pm. The Board of Directors will propose that a
dividend of DKK 5.75 per share be paid.
WEBCAST
On Friday, March 20, at 11 am, an analyst meeting will be held in Copenhagen
presenting the Annual report for 2008, the Business Plan ”Five-in-Fifteen” and
the outlook for 2009. A video-webcast of the presentation will be broadcast live
and as replay at www.auriga.dk and www.auriga-industries.com, but no
teleconference will be held.
AURIGA INDUSTRIES A/S
Ole Steen Andersen
Chairman of the Board of Directors
Kurt Pedersen Kaalund
President & CEO
