Company announcement no. 10/2010 November 10, 2010 In Q3 2010, continued strong growth from new products generated operating profits despite difficult market conditions and considerably lower sales of glyphosate. Revenue for the first nine months of the year is on a par with the prior-year period, while earnings have improved considerably. Working capital was improved in Q3 2010 leading to a reduction in debt. The outlook for revenue and earnings for the year is downgraded as a result of lower foreign exchange rates than expected after the first half, increased price pressure and the late start to the season in Brazil. PRESIDENT & CEO KURT PEDERSEN KAALUND COMMENTS ON THE DEVELOPMENT: "Growth from new products continues at a rate of 22% this year, while sales of glyphosate is reduced to 15% of revenue. Working capital has improved in Q3 leading to an initiated reduction in debt. Outlook for revenue and earnings for the year is downgraded compared to earlier - however, the results for the year will be considerably improved compared to last year." HIGHLIGHTS IN Q3 2010 * Revenue in Q3 2010 was up 14%, and Auriga's revenue for the first nine months of the year totalled DKK 4,180 million (DKK 4,190 million), which is on a par with last year. Operating profit before amortisation and depreciation (EBITDA) was DKK 292 million (DKK 201 million), corresponding to an EBITDA margin of 7% (5%). Operating profit (EBIT) was DKK 153 million (DKK 57 million) corresponding to an EBIT margin of 4% (1%). Profit before tax was DKK 47 million (DKK -22 million). * Cheminova's new products account for an increasing share of revenue and earnings, and sales grew by 33% in Q3 2010 compared to the prior-year period. The importance of glyphosate has been significantly reduced, accounting for 15% of revenue. * Working capital was reduced considerably in Q3 2010, and a positive cash flow from operating activities of DKK 205 million (DKK 277 million) was returned. A reduction in net interest-bearing debt has been initiated with a reduction in Q3 of DKK 169 million. OUTLOOK 2010 Despite a positive outlook for the industry, e.g. with high agricultural crop prices and continued strong growth from new products, the outlook for revenue and earnings for the year is downgraded. The main reasons for this are a number of lower foreign exchange rates, e.g. BRL, USD and INR, than expected after the first half, increased price pressure especially in Brazil and a somewhat delayed start to the season in Brazil. Hence, the development for the rest of the year is subject to considerable uncertainty. Auriga expects revenue to be on a par with 2009, i.e. to the order of DKK 5,400 million against an earlier outlook of approx. DKK 5,600 million and an operating profit of DKK 200-275 million (DKK 11 million) against an earlier outlook of DKK 300-400 million. Cash flow from operating activities is unchanged expected to be not below DKK 300 million for the year. PRESENTATION OF FINANCIAL HIGHLIGHTS President & CEO Kurt Pedersen Kaalund and Vice President Jens Ole Jensen will present the financial highlights at a teleconference for analysts and institutional investors today, November 10, 2010, at 3 pm (CET). The presentation will be transmitted live as audiowebcast including teleconference via the internet. You can follow the audiowebcast and teleconference on auriga.dk and auriga-industries.com, where the related presentation will be available approx. 30 minutes beforehand. Presentation and teleconference will be conducted in English. TELECONFERENCE Participants in the teleconference are kindly requested to call in before 2:55 pm (CET) on tel. 32 71 47 67 (Danish participants) and tel. +44 207 509 5139 (international participants). An indexed version of the audiowebcast and teleconference will be available on the websites afterwards. MORE INFORMATION ABOUT THE FINANCIAL STATEMENTS Kurt Pedersen Kaalund, President & CEO Jens Ole Jensen, Vice President Tel. +45 70 10 70 30 - investor@auriga.dk
Strong growth from new products, operating profits and improved working capital in Q3 2010
| Source: Auriga Industries A/S